Universal Credit: Is it working?
Following a thread by Alex Tiffin (@RespectIsVital) on the failures and struggles that, for many, have become part-and-parcel with Universal Credit, I worry that the conversation around Universal credit has become imprudent. Thus I thought it would be useful to divulge into what Universal credit is, what it was meant to be and, vitally, how it can be made better.
What is Universal Credit?
Universal credit was meant to be the definitive flagship reform of benefits, and indeed, the benefits system. Rolling together six so-called “legacy” benefits (including unemployment benefit, tax credits and housing benefit) into one benefit paid monthly to claimants. The aim, for which there was general bi-partisan support, was to simplify the benefits system, make it more efficient and increase the incentives for people to work rather than stay dependent on benefits.
It’s been a policy the former Secretary of State for Work and Pensions, Iain Duncan Smith has been trying to bring to fruition since early 2011. The original plan was to roll Universal credit out across the UK by 2017. However, a series of management catastrophes, expensive IT mistakes and design faults mean it has fallen at least five years behind schedule. Under the current schedule, it will be fully implemented to about 7 million claimants by 2022-23, when it will account for around £63bn of spending.
The question then becomes; does it work? Incongruously, it might be too early to tell: Universal credit has barely got off of the ground. What is clear, though, is that early claimants have had demonstrably appalling interactions with Universal credit – or at least, with its ‘human face’. Similarly, critics contend that cuts to the benefit mean it is now less likely than ever to incentivise jobless people to move into work, or incentives low paid workers to work more hours. Ministers claim evidence from early official trials shows universal credit claimants were more likely to get a job. However, the Office for Budgetary Responsibility (OBR) said there was still insufficient evidence to judge.
Why is it controversial?
For all its theoretical benefits, in practice universal credit has been hugely problematic: While it began life intending to be more generous to most claimants, it is now, as a result of cuts, significantly less generous, leaving many claimants worse off when they move on to it than they were under legacy benefits. Added to that are design flaws and administrative glitches that put poorer claimants especially at heightened risk of hunger, debt and rent arrears, ill-health and homelessness. Food banks, for example, have reported that demand for charity food goes up significantly when universal credit is introduced into the local area. (The Independent).
Positively, however, the government have not remained static on the issue: after some pressure, the government responded by making sure claimants only had to wait five (instead of six) weeks for their first benefit payments. They also insured advance loans were more readily available to claimants unable to wait long periods for financial assistance, and similarly made the Universal credit help hotline free. Opposition parties and charities have criticised budget measures to improve the policy, though, claiming it simply was not going far enough.
Indeed, their criticism is well placed: Landlords (private, council and housing association) are worried about the level of rent arrears racked up by tenants on universal credit. Unchecked, this will lead to a spike in evictions and homelessness. Many private landlords say they will no longer rent to universal credit claimants because the risk of arrears is too high, and the bureaucracy involved in tackling arrears problems once they arise too soul-destroying. Housing associations have warned that the accumulated bad debts run up by tenants as a result of universal credit could affect their housebuilding plans. Claimants complain that universal credit is bafflingly complex, unreliable and difficult to manage, particularly if you are without internet access, and that universal credit staff are often poorly trained.
Universal credit is not beyond broke, though. I believe there are changes that can make benefits the safety net they were intended to be. Perhaps the most important is to improve the ‘taper’. The taper system, introduced in April, means a Universal Credit claim is reduced to 63p for every £1 earned over their work allowance, which is simply is not a good way to make people want to work. At the heart of the issue is the hostile environment surrounding claimants which depicts them as freeloaders, this ultimately complicates narratives in politics but also throughout wider society. Claimants have been required to jump through more and more hoops to receive benefits, whether unemployed, single parents, sick or disabled. There is no evidence that this has increased the number entering work, or decreased the overall benefits bill or the number claiming fraudulently.
Indeed, we need to improve the taper; we need to backtrack on conditionality, but, crucially if Universal credit is ever going to work in line with its original aims, then the experiences of claimant's needs to be put at its centre. Too many of its problems are the result of a design which took too little account of their needs, and the system’s failures will only be rectified when claimants are prioritised.