In light of the current political and media interest in Universal Credit, I thought it would be useful to set out my thoughts on this, and why I support the roll out of University Credit, both from my perspective as a local councillor and as a former civil servant in the Department for Work & Pensions.
I am convinced that Universal Credit is the right thing to do. I also recognise that many residents have concerns about how it is operating. One of the key achievements of the Conservatives in Government has been our labour market success. Unemployment is 1 million lower today than in 2010, and youth unemployment in the same period has gone down by 415,000. We are rightly proud of this – this did not happen by accident but as a result of key policy interventions which, between them, have helped our businesses compete and ensured that work always pays. But a key part of ensuring a robust labour market, in which everyone can meet their potential, is having a Welfare State that acts as a springboard, rather than something that holds people back or makes them feel dependent on State handouts.
Universal Credit is a direct response to the problem created by the befuddling mess of benefits, tax credits and entitlements bequeathed to us by the last Labour Government – something which I have seen first hand hold back those who want to progress in life and improve their circumstances and those of their families.
I witnessed first hand, both during my own time at DWP and, later in my career when working in recruitment, the barriers the Welfare State throws up in front of people, stopping them fulfilling their potential:
- People on Jobseekers’ Allowance (JSA) were discouraged from doing more than 16 hours of work, because they would then go through the disruption of moving from one benefit system to another
- Individuals on Employment Support Allowance can be faced with a choice between financial support or work, whilst we know many thousands would like to, and would benefit from, doing both
- And once people are in work, they are all too often caught by hours rules in Tax Credits, which forces them to work at least 16 hours to maintain eligibility – and imposes an effective marginal withdrawal rate of 70%
Universal Credit aims to cuts through this by taking six different benefits and replacing them with a single system. It provides tailored support for claimants’ individual circumstances to get them into work. In Universal Credit, claimants only have to deal with one organisation, instead of three. Crucially, it also ensures that it always pays to work and always pays to progress.
The latest data clearly shows that Universal Credit is transforming the prospects of those who use it:
- People are moving into work faster and staying in work for longer under Universal Credit
- Universal Credit claimants are 4% more likely to be in work within six months than compared to claimants in similar circumstances on JSA
- Jobseekers spend more time looking for work, are more likely to consider jobs that they would have previously ruled out, and are taking on more hours or jobs compared to the old system
Universal Credit will boost employment by around 250,000. This is an important change and the Government are therefore delivering it in a measured way, testing and learning as they go. Roll out will not t be completed until 2022 and I think the Government have been right to prioritise getting it right. I applaud the way in which the Secretary of State, David Gauke, has implemented changes along the way to improve the system, when issues have been brought to his attention. These include:
- Phonelines – Mr Gauke did not want people to be put off from seeking help. An issue was brought to his attention and, having reviewed the Universal Credit 0345 numbers, he decided to change it to a Freephone number. But he went further than that. Having reviewed the issue more widely, he announced he would be extending this change to all of DWP phone lines by the end of the year.
- Wait for payment – people expressed concerns to Mr Gauke about the up to six weeks that people may have to wait before they receive money. He was very clear that no one need go without money for 6 weeks. Advance payments are available and are paid within days. And if someone is in immediate need, then the DWP will fast track the payment, so they will receive it on the same day. The most recent data show that over half of claimants took out an advance – but the Government are keen to see that more is done. Mr Gauke therefore announced at Party Conference that he was improving the guidance to Jobcentre staff to ensure that anyone who needs an advance payment will be offered it up-front – and that claimants will be made aware of the maximum amount to which they might be entitled.
As I have said, I recognise that many residents have outstanding concerns, particularly around vulnerable people when they first apply for Universal Credit. But it is important that these changes are put in context. Universal Credit has been operating in its ‘Live Service’ pilot form in all jobcentres across the UK for four years now. The most recent phase of expansion – which applies to new welfare claimants and those who have suffered a change in their personal circumstances only – will take the proportion of the forecast claimant population receiving Universal Credit from 8% to 10% by the end of January. This is not a dramatic, ‘big bang’ expansion. The Government have learnt from Labour’s disastrous delivery of the tax credits system and are determined to take a measured approach. It is vital that this continues. Labour’s benefit system trapped people in welfare dependency and wrote off whole generations and entire communities. The Conservatives are committed to delivering a system with work at its heart, which is fair for the claimant and the taxpayer. The transformative potential is huge – we must not let Labour scaremongering prevent us from delivering it!