UK’s “bungled” Universal Credit benefit system must be improved, report says

By on 11/03/2020 | Updated on 24/09/2020
Universal Credit has been linked to a rise in psychological stress among the jobless people who claim it. (Image courtesy: JJ Ellison/Wikimedia Commons).

The UK’s much-criticised Universal Credit social security system is too far advanced to be scrapped, and could be much improved by introducing a ‘welcome grant’ to lessen the impact of late payments and writing off benefit debt, according to a new report.

The report, Universal Credit – Getting it to work better, by London-based think tank the Institute for Government (IfG), acknowledges the improvements that have been made to the system in recent years but says more could be done.   

It presents two key recommendations. It says the government should introduce a two-week, non-repayable ‘welcome grant’ for new Universal Credit (UC) claimants and for those transferring onto the system from tax credits. And the government “must reduce the impact of the repayment of a huge amount of historic benefit debt that is leaving growing numbers of UC claimants living on less than its standard allowance, and thus on very low incomes indeed”. The solution, it says, is to “write [the debt] off, or seek to reclaim it at a much slower rate”. Both measures seek to lessen the negative impact on claimants, building on steps the government has already taken to improve the system.

Nicholas Timmins, a senior fellow at the IfG and author of the report, says UC has a “terrible reputation” and “suffered a seriously bungled start”.

Sorry tale

The biggest single reform of working-age benefits in the UK in decades, UC replaced six benefits for those out of work or on low incomes with a single monthly payment. Introduced by the Department for Work and Pensions (DWP) in 2013 and rolled out more widely in 2017, the project has suffered serious setbacks and problems such as late payments. The system is acknowledged to have caused recipients hardship and has been linked to a rise in psychological stress.

“There is no doubt that the introduction of UC by the DWP caused, and in some cases is still causing, real hardship,” says Timmins. “The nominal five or six weeks for payment too often turned out to be 10 or 12 weeks, or even more. Rent arrears rose. In the most extreme cases, people became homeless and even lost their jobs – the exact opposite of the policy’s intention. Universal Credit has unquestionably been a factor in the rising numbers using food banks.”

He says the problems with the scheme arose due to an “impossible” timetable; conflicts within government; major IT problems; an unstable social security system, caused in part by austerity; and changes in leadership – the project had six ‘senior responsible owners’ in its first four years.

UC was scheduled to be fully up and running in 2017, but is now expected to be fully operational no sooner than 2024. In the run-up to the UK’s December 2019 election, the opposition Labour party threatened to scrap it. However, Timmins believes it has “reached the point of no return”.

Onwards, but better

“Universal Credit can of course be tweaked, amended and even, conceivably, rebranded. But the time for pausing it, or (easily) dismantling it, has passed. The question now is how to improve it,” he says.

He says that while far from perfect, “UC’s performance is improving and measures have been taken that reduce, and will further reduce, some of the worst aspects of its early days”.

He points out in the report that IT is no longer one of UC’s “greatest weaknesses”; that use of sanctions for minor infringements has been reduced; that it is now possible for claimants to be paid fortnightly rather than monthly; and that more people are being paid on time. For example, in January 2017 just over half of new claimants were being paid in full or on time. By July 2019, 89% were being paid in full and 93% received at least a part payment on time.  

The introduction of a ‘welcome grant’ and changes to debt recovery are, he believes, the two most pressing steps that should be taken to further improve the system.

About Mia Hunt

Mia is a journalist and editor with a background in covering commercial property, having been market reports and supplements editor at trade title Property Week and deputy editor of Shopping Centre magazine, now known as Retail Destination. She has also undertaken freelance work for several publications including the preview magazine of international trade show, MAPIC, and TES Global (formerly the Times Educational Supplement) and has produced a white paper on energy efficiency in business for E.ON. Between 2014 and 2016, she was a member of the Revo Customer Experience Committee and an ACE Awards judge. Mia graduated from Kingston University with a first-class degree in journalism and was part of the team that produced The River newspaper, which won Publication of the Year at the Guardian Student Media Awards in 2010.

One Comment

  1. D Penfold says:

    I have a relative on this universal credit and is often without money due to sanctions. He keeps getting his benefit stopped due to stupid reasons. The latest was he was working as a qualified nurse. Just looking at his training you would know he wasn’t working as a nurse as never had any training. He had to reclaim and again this is taking time. The government states this is the minimum they can live on so how have they got the right to keep taking money away from them but still expect them to go to job interview’s etc. No wonder people are becoming homeless as the rate of money they are now entitled to has dropped and leaves very little money once they pay rent as these are on the increase. I feel that the whole system needs reviewing allowing people to get all of the money they are entitled to. If claimants are doing the wrong thing there should be another way of dealing with this other than taking away the little money they are entitled too.

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