Today, the government spending watchdog the National Audit Office has reported on Universal Credit and has again found it wanting.
The government has been very keen to say how successful they have been in enrolling people onto Universal Credit during the Covid crisis. But this report lays out the huge failings of the benefit once people get there. This follows 10 years of upheaval. Millions of families have faced upset, increasing intrusion, unjust sanctions and less support that is increasingly difficult to access. Alongside this they have had to deal with multiple IT systems some of which have had to be scrapped. All this was for the promised reward of a simpler more efficient benefit system, that helps more people into work. But this goal is further away than when we began.
Covid 19 and Universal Credit
Universal Credit was radically changed in order to meet the challenge of Covid 19.
- The online ID checking system “Verify”, which only worked for around 20% of applicants, was temporarily circumvented by using other government databases.
- The entire Sanctions and Conditionality regime – where people are given sets of tasks and have their benefits removed if they do not complete them – was stopped. The fear of being sanctioned was removed and the huge administrative burden of setting tasks, testing and judging if people should be punished was set aside.
- The baseline benefit rate was increased to £94 a week temporarily for one year
- Most debt repayments that are mandatorily deducted from Universal Credit were stopped.
The Covid 19 emergency ironically forced government to temporarily make Universal Credit into a simpler and more humane benefit. Even then system design flaws like having to wait 5-weeks for the first payment are all too apparent.
However, as if to underline the temporary nature of the improvements, on the first of July the phrase “You will not get a sanction if you cannot keep your claimant commitment because of COVID19” was removed from the rulebook and the conditionality and sanctioning regime was slowly brought back to life.
In a peculiar twist of language, this process of removing people’s basic living allowance is routinely referred to as “supporting people back into work”. When unemployment is soaring and employers are understandably worried about their future such “support” seems particularly cruel and pointless.
Universal Credit is not meeting its objectives
Getting people back to work: The central aim of Universal Credit was to get people back to work more quickly. The harsh sanctions regime and the highly complex method of calculating payments each month based on circumstances, earnings and savings was designed to incentivise work.
But, simply put – it doesn’t. When the DWP paid for adverts saying that Universal Credit gets people into work in an advertising campaign, the Advertising Standards Authority banned the advert saying the claim was “unsubstantiated” and “misleading”.
In 2018, the National Audit Office said that delays in the rollout meant it was now impossible to fully test if Universal Credit met its key objective. It is telling that their report today does not really look at if the benefit is doing what it was intended to do – instead it sets it sights much lower, and examines if Universal Credit can even do the basics of getting money to people on time. The answer is that it is doing this better than it did – but still many wait more than 11 weeks for payment and 3 in 10 childcare claims are processed late.
Reducing Fraud and Error: A second key aim of Universal Credit was to reduce fraud and error. It has however increased hugely. Universal Credit has the highest error rate (10.5%) of any UK benefit since the second world war. Only first full year of the Tax Credit system in 2003/4 comes close. Around £1 in every £10 is paid out incorrectly, and this doesn’t include the highly organised fraud around Advance Payments.
The term fraud and error suggests that it is the average claimant deliberately claiming what they are not owed. Whilst there is some of that, the design of Universal Credit means that each month large amounts of information from the claimant, the HMRC, the employer, the landlord etc is need to calculate the final payment. Simply understanding this and keeping up with it is a substantial task – especially as Universal Credit claimants are likely to holding down a low paid job, and/or coping with a disability.
Ironically, the simplified UC system makes avoiding fraud and error more difficult. Sadly however, in keeping with the government’s habit for the past decade, the numbers are reported in a way that flatters the DWP while placing the blame firmly on the shoulders of the claimant.
Increased Personal Support: There was the hope that Universal Credit would allow more one-to-one support of claimants. “Employment Advisors” became “Work Coaches”. There is good evidence that a trusted advisor providing advice and motivation is helpful. Almost every good UC story we hear starts with a positive relationship with the Work Coach. The evidence is also clear that threats and sanctions destroy those relationships and that, for most people, their main interaction with their Work Coach was focussed on these policing issues.
Initially we were told every claimant would have a Work Coach. That meant that each coach would eventually have a caseload of over 600 people – equating to around 4hrs per person per year. Today’s National Audit Office report indicates that ratio has gone down to a more manageable 1 to 125. However the reduction is not due to more Work Coaches being appointed, but instead it is because most people won’t actually see a Work Coach at all.
Those who are not in the “intensive work search” group won’t, in practice, have a relationship with a Work Coach. This includes some who are unable to work through illness or disability. These are the same people whose benefits were cut by £35 a week in order to “incentivise” them into work – but it appears they are will not be offered any real “help” beyond a reduced income.
The human costs of Universal Credit: The central claim was the Universal Credit would move more people into work and therefore the upheaval was worth it. That pay off has not happened, but the costs have been huge.
There is not space here to go into the costs in detail. The UN Special Rapporteurs findings on poverty provide a vivid if heart rending account. But the body of evidence is growing and overwhelming and – unlike many of the DWPs claims made in support of Universal Credit – they are of a quality that the Advertising Standards Authority would view as well substantiated.
Some recent examples of the evidence. Universal Credit and it’s built in 5-week wait have increased the need for foodbanks. The medical tests that are part of Universal Credit have been linked to higher anti-depressant usage and suicide. Several studies indicate it reduces financial resilience and that the practice of sanctioning those with illness of disability harms their health, their general wellbeing and their work prospects. In March, a large study showed conclusively that Universal Credit increased levels of mental distress. The news that it is being paid marginally more efficiently is good, but doesn’t address the real issues.
We are facing a time when more people need Universal Credit than ever before. Many will need genuine “support into work”, and this National Audit Office report does nothing to indicate that Universal Credit is up to the job.
Simple steps such as closing the 5-week wait by converting the Advance Payment into a grant and reinstating the moratorium on sanctions would be a good start. But it is clear that Universal Credit needs a fundamental redesign in order to meet the challenges of the year ahead.
A conversation about what comes after the failed experiment of Universal Credit is needed. This must be done with experts by experience at the table, so that any change works for those it will affect.
Many Christian and secular groups are talking about different ways forward, such as a Universal Basic Income. Over the coming months, we will work with others to explore how best to ensure that those who fall on hard times can still live with dignity and without the fear of poverty or hunger.
 Set to increase to around 1 to 300