The failure of Universal Credit could unleash a pandemic of poverty

Our benefits system is totally unfit to weather the coronavirus crash.

Ewan Gurr

Topics Politics UK

Milly Graham had a successful career as a deputy manager in social services before earning a degree in international development. What followed were three traumatic years of domestic violence and sexual assault, finally culminating in an unsuccessful suicide attempt. With support from Women’s Aid, she applied for Universal Credit. But she describes her encounter with the UK social-security system as something that ‘cut much deeper’ than anything she had previously experienced.

Work and pensions secretary Thérèse Coffey announced on Tuesday that 1.4million new claims have been made for Universal Credit since 16 March, which will have a huge political, economic and social impact. Political in that the UK government’s once lauded low unemployment figures will evaporate; economic by inflating the potential of a recession; and social as we observe the decimation of living standards. Milly, who experienced Universal Credit first hand, warns: ‘I fear our workers are about to find out how hostile the system they fund really is.’

Three days before Ms Coffey’s announcement of 1.4million new claimants, research by the Food Foundation found that 1.5million people went without food for a whole day recently. The uncomfortably close proximity between both sets of figures begs the question: how connected is the destruction of basic living standards to the time it takes the DWP to process a benefit claim? In 2018, food-bank charity The Trussell Trust found a demonstrable link between the rollout of Universal Credit and an average 52 per cent rise in demand for foodbanks.

In addition to that, on Wednesday the Office for Budget Responsibility (OBR) warned that Britain is on the cusp of the biggest economic shock in 300 years. Its forecasts said unemployment could reach 10 per cent. How effectively Universal Credit delivers at this point will have enormous consequences. Providing security to our citizens in times of crisis should be the priority of any civilised country.

Universal Credit is the cornerstone of the Welfare Reform Act 2012. It came into effect in April 2013 with oversight from its architect and former secretary for work and pensions, Sir Iain Duncan Smith. One pillar of the Act was dubbed the bedroom tax, which deducted 14 to 25 per cent of Housing Benefit from those with spare bedrooms. Another pledged to increase the number of benefit sanctions handed out. Over 900,000 benefit claimants were sanctioned in 2014, the Act’s first full year. Austerity, it seems, has turned Britain from a country which sanctioned foreign dictators to one which sanctioned our poorest people.

This new benefit system was intended to simplify the old one by rolling six pre-existing benefits into one. Among those six are Jobseeker’s Allowance (JSA), Housing Benefit and Child Tax Credit. It was not until 2015, after a handful of local authority pilots, that Universal Credit began its full rollout. However, its existence has been marred by mistake after misdemeanour. These were laid bare in a bruising 2019 report by Philip Alston, the UN special rapporteur on extreme poverty and human rights. Almost prophetically, Alston said: ‘Local authorities, devolved administrations and the voluntary sector described their preparations for the roll-out of Universal Credit as if they were preparing for an impending natural disaster or health epidemic.’

Among Universal Credit’s key problems is the five-week wait from making a benefit claim to receipt of the first payment. There is also a lamentable ‘digital by default’ approach which discourages human interaction with benefit advisers and adds a financial burden to many by requiring them to own devices and pay for broadband. Alston says this forces our most vulnerable citizens into ‘a nationwide digital experiment’.

Small changes that would lift the floor underneath claimants would be to reduce the waiting time for payment, increase benefit contributions and lower the taper rate (the current taper rate cuts benefit entitlements by 63 per cent for every additional pound earned). Not my words but those of its architect, Sir Iain Duncan Smith, in the House of Commons last month.

But we need to go much further. At present, claimants are entitled to apply for an advanced payment, but these payments are currently made of loans, which could store up even greater problems ahead. The DWP should pay people using grants instead. Workers need to be insulated from the worst of this crisis, otherwise there will be real difficulty remobilising them when it is over.

At its worst, Universal Credit operates against the principles of William Beveridge’s welfare state by persecuting the unemployed rather than projecting people into employment. As Alston described it, it was ‘designed to bring major and much-needed improvements’ to the benefits system but it ‘is fast falling into Universal Discredit’.

Perhaps no benefits system would have been ready for a crisis of this magnitude. But Universal Credit’s failings were apparent long before this crisis hit. Though reform is necessary, a grand overhaul at this stage might complicate matters further. One thing is clear: the welfare system needs to do far more to prevent a foreseeable pandemic of poverty.

Ewan Gurr is a commentator, consultant and columnist for the Evening Telegraph. Follow him on Twitter: @EwanGurr

Picture by: Getty.

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Danny Rees

17th April 2020 at 4:12 pm

What a load of bollocks from the chattering lefty middle classes who believe the poor working classes cannot survive on their own two feet without benefits…–poor-survive-soul–deadening-embrace-welfarism.html

Mike Smith

17th April 2020 at 3:21 pm

Universal credit , you can get an advance payment with in days of registering search UC Advances. The system is designed to be used on most smart phones etc. You will find most even poor people have smart phones. There are stand alone computers at most job centres for claimants to use . It’s quiet a simple system to use and clear , not much difference to ordering something on amazon . Pension age people will not be entitled to universal credit as they are already getting pension , these would be the group most likely to not internet access. I did many years voluntary work for the homeless , surprisingly most will have good mobile phones—-some this will be essential to keep in contact with their dealer .

Steve Gray

17th April 2020 at 2:28 pm

A lot of comment about welfare benefits and the people who claim them is anecdotal – ‘there’s a woman who lives down our street who’s got six kids’ and so on.

Thing is, any attempt to get beyond that level and take a more objective view of things is severely hampered by the government, who tend to make it difficult to obtain statistical information about welfare benefits – if they collect statistics at all.

Gordon Le Gopher

17th April 2020 at 1:18 pm

Another big difference between housing benefit and UC is the treatment of any previous earnings that have been paid yet. With housing benefit, if you’d just lost your job you’d be on full entitlement no matter what your employer still owes you. With the housing element of UC it doesn’t matter that those earnings were for a job you had before claiming, if your previous employer pays you after you claim UC it reduces your entitlement for that month.

Gordon Le Gopher

17th April 2020 at 1:21 pm

** previous earnings that HAVEN’T been paid yet

Joyful Cynic

17th April 2020 at 12:35 pm

Sorry but total and utter bollocks. Yes, there are some problems – this level of change is always going to have problems. I thank whatever it is people thank for the arrival of UC every single day. I have suffered health issues that prevent full-time regular work for over 15 years. When it was incapacity benefit I was written off as useless and expected to stay in and watch TV all day. With ESA it was conceded I might be able to do something but if I could not manage 16 hours a week every week then er stay at home watch TV. UC, on the other hand, has the flexibility to recognize my limitations and abilities as an individual and try to work with them. I may only be able to do a few hours a week some weeks but I am not totally useless. Quite beside anything else being able to say at the end of the month that I EARNED this bit of money makes a world of difference to my mental health.

UC treats claimants like capable self-determining adults, who are living in an incredibly flexible world, who should be able to decide for themselves the best way for them, as individuals, to navigate that world, rather than as passive production units who are treated like clone models, all the same, the way the old benefits systems did. I have been under both systems and while UC is not perfect it is a hell of a lot better than what there was before.

Linda Payne

17th April 2020 at 1:59 pm

Many of those on benefits do some voluntary work for the same reasons, to give something back, have a sense of purpose but out of interest what paid postisions allow you to do a few hours here and there? My experience of 0 hours work was that if you couldn’t put the hours the employer wanted you to do. when they wanted, you were pretty much at the back of the line when it came to work, glad things are looking up for you

Danny Rees

17th April 2020 at 4:13 pm

Which ones on benefits? The able bodied or the disabled?

Joyful Cynic

17th April 2020 at 5:17 pm

Linda Payne – UC allows me to work self-employed as a photographer. When I am able to go out and shoot and can either do contracted work or build my stock portfolio. Contracted work plays immediately stock builds a trickle income over time which will continue even when I am not actively shooting. This form of income was totally impossible before UC – now it offers a real chance I can in time become self supporting.

Linda Payne

17th April 2020 at 5:22 pm

Danny Rees, mainly the disabled

No-one Important

17th April 2020 at 11:24 am

To roll up several benefits into one was never going to be a success. If you are in receipt of, say, two or three different benefits and one of them isn’t paid for some reason (incorrectly completed form, or the benefits officer got out of bed the wrong side that morning), you can rub along on the other two until matters are sorted out. If – as frequently seems to be the case – there is a problem with the only benefit you receive, you’re in trouble.

As I used to say to the Sales people, better to have ten average sized customers than one big one. You can afford to lose two or three of the former but if the one big one goes south, there’s a big problem. It’s the same mechanics. If the singlke customer is utterly reliable and has promised to pay in the future on the life of their first-born, that may be different!

Mike Stallard

17th April 2020 at 10:10 am

I was on the dole for most of the 90s. It worked really well. There were lots of jobs on a pin-up board and lots of helpers. My wife supported me. But I did meet some scroungers, I must admit. I do not remember meeting anyone with mental problems – at least open ones.The scandal in those days was that it paid not to work. The receptionist at one place told me that she (happily married with kids) was thinking of getting a divorce so she could stop work and get an allowance as a single Mum.

Christine Gandy

17th April 2020 at 9:09 am

I have recently lost my business INCOME (TEMPORARY )I hope ……. due tot the pandemic ….. I haD filled in a tax return last year and paid the amount due… I am told I can only get £409.00 as I have only been going since September I cannot get any benefit of the min floor limit ….I UNDERSTOOD THE WELFARE STATE was exactly that TO help at times like these I have worked ALL my adult life paid tax all my adult life ….

Jerry Owen

17th April 2020 at 12:45 pm

The system is by and large for wasters and scroungers. What help is there for the self employed ? Virtually zero until June when you can apply for something! If as a SE person you have cash in the bank for wages etc you are not eligible for credits because you have ‘savings’. The harder you work the more you are shat on in this country.
I listened to some girl on the TV that had just given birth and she wanted to know how the virus affected her benefits and tax credits… You couldn’t make it up!

Jerry Owen

17th April 2020 at 12:47 pm

*Universal credit*

Danny Rees

17th April 2020 at 4:15 pm

Oh a woman on benefits who has just given birth. She must be a dole scrounger eh? For all we know she might have a job and need benefits to top her piss poor wages. But hey let’s have a good Daily Mail rant.

Jerry Owen

17th April 2020 at 5:14 pm

Danny two line Rees
She said she was unemployed!
Next ?

Linda Payne

17th April 2020 at 2:54 am

I see a lot of desperate people in my work as CAB advisor who are in the benefits system, many who have serious mental and physical health problems. The Kafkaest sytem has found most ‘fit for work’, denied and/or minimised their symptoms and often outright lied about them. Appeals take months sometimes more than a year and many have died before they got to that point. I am quite annoyed that the charity I volunteered for for over 10 years have taken out a contract to help people claim for universal credit, that is what the charities are doing now, the government’s dirty work while the CEO sits on a half a million pound salary. Of course someone has to help these people and we do the best we can, universal credit can ‘work’ for some healthy people in that they can do some work (usually part time or zero hours as that is all there is) and still claim a top up, but it has been a disaster for sick, disabled and mentally ill people and now for thousands more forced to give up work by this government

Mark Houghton

17th April 2020 at 12:38 am

I predict a lot of social unrest in the months to come and in the longer term a complete breakdown of what little confidence remains in the political classes.

Jim Lawrie

17th April 2020 at 11:49 am

In the face of mass unemployment and mass poverty, social breakdown would be a catastrophe for those at the bottom. Those rubbing their hands with glee at this prospect care not a jot for the poor, dreaming that their plight will cause them to look to the left.

Jerry Owen

17th April 2020 at 12:47 pm

That sounds promising!

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