Is Universal Credit ready for an expansion?

Is Universal Credit ready for an expansion?

Universal Credit (UC) recently made the headlines for the wrong reasons. Esther McVey, the Work and Pensions Secretary, came to parliament to correct her statement regarding the National Audit Office’s (NAO) recent report on the government’s flagship benefit. The NAO’s report found that UC is not value for money, and it has significant doubt about its main benefits.

Managed migration makes the problems more immediate

The report’s conclusions became immediate in the last couple of weeks, as plans have been revealed for the ‘managed migration’ of people onto UC from existing benefits.

So far, the rollout of UC has been slow because people can continue to claim the old-style benefits (housing benefit, employment and support allowance, jobseekers allowance etc.) unless something triggers them onto UC, such as making a new claim. There are currently around 920,000 people on UC, compared with the forecast 8.5 million by 2024/25. The Department for Work and Pensions’ (DWP) ‘managed migration’ is intended to move over the bulk of existing claimants to UC, many of whom have long-term health conditions and disabilities. The Social Security Advisory Committee published a consultation on the proposed migration process, which starts in 2019.

Is UC ready for managed migration?

We’re concerned that the government is forging ahead with migration without considering how this might compound the clear problems with UC, as identified by the NAO. One of the most worrying aspects of the NAO’s report was its conclusions that the DWP has not assessed how much hardship claimants suffer, and that it lacks the ability to monitor the treatment of vulnerable claimants nationally.

We are seeing vulnerable claimants experiencing issues with UC which lead to rent arrears or homelessness. The threat of homelessness can itself be a cause of stress and other health conditions. For example, a street homeless client who came to us for help. She had social anxiety and had been contemplating suicide. Though she had been renting a room in a shared house for a month, problems with her UC meant she was unable to claim for housing costs. She was asked to leave and had nowhere else to turn, because her parents lived in a retirement complex and could not accommodate her. She only had £18 to her name.

Despite welcome attempts by the government to improve UC, including removing the seven-day waiting period, many of the most serious issues endure. Long waits for payments continue to be a major problem, and repayment rates for advances and third-party deductions remain unaffordable.  Private landlords are unenthusiastic about UC, with 22% saying the new system makes them less likely to rent to people who require benefits to top up their rent.

Given these issues, the UC system may not be ready to take on millions more existing claimants. There are some clear questions to ask about whether it makes sense for managed migration to take place until the current problems are addressed.

It could leave people with no income

Under the government’s plans, claimants will be issued with a notification saying their existing benefits will stop within a certain period unless they make a new UC claim. This creates a potential cliff-edge which could lead people into rent arrears, and become threatened with homelessness if they do not manage to make a claim in time. People going through a crisis such as homelessness or poor health may struggle to make a new UC claim before their existing benefits are stopped, meaning they would have no money to live on or pay their rent. While the government has said some people will be able to delay the process if they have a good reason (e.g. homelessness), this relies on the DWP staff to recognise this vulnerability.

As mental health charity Mind points out: ‘It places a great deal of pressure and stress on the moment in time when a person receives a migration notice. The notice that their benefits will stop is likely to be very destabilising for people who may be very unwell and fearful about the future.’

Ready for dialogue

The good news is that the government is willing to listen on UC and wider welfare, having made some welcome changes in the Autumn Budget in 2017. We hope that it will heed concerns about managed migration expressed during the consultation process.