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Despite positive changes to Universal Credit, the system still doesn’t work for everyone

By Sally Thomas, SFHA Chief Executive 

Posted In

Like Brexit, Universal Credit may not be the most exciting issue, but it absolutely is one of the most important. And, like Brexit, fatigue can set in – which is dangerous and why I make no excuses for writing about it again.

In July 2018, the four UK housing federations called for a rethink to the Universal Credit system. Together, we set out five changes that were necessary to make Universal Credit, and the wider social security system, work for everyone.

Since then, using the four federations’ five asks, SFHA talked to Scottish MPs and MSPs and submitted evidence to Scottish and UK parliament inquiries. We have been at the table with the Secretary of State for Work and Pensions Amber Rudd MP and engaged with stakeholders. We also continue to survey our members regularly to gauge the impact of the roll-out of Universal Credit on their tenants and residents.

During this time, the UK Government has adopted a more conciliatory approach. It has been acknowledged that there is a causal link between the delay in first payments and the growth in the use of foodbanks. It has also confirmed the decision to limit managed migration, in the first instance, to a pilot involving no more than 10,000 claimants. In the Budget, further measures were announced to ease the transition to Universal Credit, including, from 2020, two week run-ons of JSA, ESA and Income Support, similar to the run-on already applied to Housing Benefit.

So, does Universal Credit now work for everyone? Sadly not. The four federations have set out six asks for 2019 – all of which are based on hard evidence of what is and isn’t working:

  1. End the five-week wait for the first payment. The initial five-week wait is unnecessary and intolerable. It is unrealistic to expect a claimant with no savings (the majority) to survive on nothing for five weeks. New claimants will not benefit from the two-week run-ons, so it is essential they can get the support, otherwise, they may well be destitute.
  2. Improve data sharing between the DWP and social landlords and allow implicit consent with Universal Credit Full Service. The DWP can share with landlords some key information about Universal Credit claimants if they have a Managed Payment to Landlord (MPTL) in place such as the start date of a payment, how much the payment will be and when it will be paid. Currently, the landlord needs to contact the DWP service centre case by case, this is impractical if the numbers of tenants who are claimants are in the hundreds or more. If that information was readily accessible via the landlord portal, it would radically enhance a landlord’s rent management process and ease the anxiety of tenants.
  3. Fix the landlord payment system so it is in sync with payments to tenants. The DWP has committed to developing a new system to harmonise Universal Credit payments to tenants with the payments of housing costs to landlords. These are currently out of sync. This will remove significant anxiety from tenants and uncertainty from landlords. In Scotland, 42% of Universal Credit claimants with housing costs in the social rented sector have them paid directly to the landlord – 27% via MPTL and 15% Scottish UC choices. This could be substantially increased if the payments to claimant and landlord were synchronised.
  4. Provide more and longer-term support and advice. The DWP has replaced Universal Support Delivered Locally with ‘Help to Claim’, run by Citizens Advice. It promises to be a more holistic service to help claimants, up until their first claim, and will use a variety of methods, including webchat and a telephone service. The concern is that many vulnerable claimants will need a lot more help, particularly beyond first payment stage, to maintain their claim. The waiting time for a face to face interview at Citizens Advice in Scotland is typically around three weeks. More investment is essential if support is to be available to all those who need it.
  5. Make the monthly benefit assessment period more flexible. It currently puts claimants in work, who are paid with a frequency other than monthly, at a distinct disadvantage, with erratic Universal Credit payments that make budgeting on slender resources all the harder. Even those paid monthly can lose out if there is a clash between their pay date and their assessment date – if, for example, they get their pay early on account of public holidays. The High Court in January ruled assessment calculation methods unlawful, calling them “nonsensical”. If Universal Credit is to have any chance of genuinely making work pay, it needs to be sophisticated enough to take into account the actual period a payment covers, not the date the wage is actually paid.
  6. Unfreeze working age benefits. For the past three years, working age benefits have been frozen and will be so for another year. This means people are finding it increasingly difficult to get by as household costs rise. Social landlords have done great work in sustaining people and their neighbourhoods – helping people feed and clothe themselves, providing IT access and training, upping employability skills. This is all important work, but what is most needed is the restoration of dignity, fairness and respect to those most in need. Ending the benefits freeze now would be a huge step in this direction.

Through the work of the four federations and others, the DWP has made positive improvements to the system. We will be maintaining our efforts, through dialogue, evidence and, where necessary, pressure, to do everything we can to make Universal Credit work for everyone.