Government told it must face significant Universal Credit problems

Responding to the report on Universal Credit by the Work and Pensions Select Committee, which warns that the new benefits system could push low-income families into debt, Trades Union Congress General Secretary Brendan Barber has declared that, "The concerns raised in this report must not be ignored."

He followed a host of NGO and charity experts, who say that the government must not run away from the difficulties the simplifying Universal Credit - welcomed in principle but feared in detail and practice by many - entails.

The report was launched in the House of Commons on 22 November 2012 by the Chair of the Work and Pensions Committee, Dame Anne Begg MP.

"It is deeply disturbing that some local authorities are already warning that the new monthly payment system could force some low-income families to turn to pay-day loan companies and loan sharks in an attempt to get by," commented the outgoing TUC chief.

Mr Barber continued: "Ministers must also ensure that vulnerable people can access the new system. Moving the claims process entirely online seems like another potential recipe for disaster that could leave many applicants unsure about how to apply for their payments. Universal Credit is supposed to be about simplifying the benefits system not making it more complicated."

"With households struggling to make ends meet as a result of the government's ongoing tax credit and benefit cuts, botched delivery could mean that Universal Credit just makes this situation even worse. The best way to help low-income and vulnerable households would be to reverse the damaging cuts that are already forcing thousands into even deeper poverty," he concluded.

Commenting herself on the publication of the report, Dame Anne Begg MP, said: "We recognise that the new Universal Credit system is likely to be accessible to the majority of claimants, but we have serious concerns about how more vulnerable people will cope with the changes, especially the online claims system and the proposed single monthly payment."

She added: “Some claimants will not be able to make an online claim and others may struggle to adapt to monthly payments.”

"The measures the Government plans to put in place to help these claimants may be difficult to access and too slow in identifying who these people are, with the risk that they will fall into debt and hardship before extra support can be provided.

"We believe that the Government should reflect on the possible consequences of these major benefit changes for some of the most vulnerable people in society and that it should consider modifying its implementation timescale if those consequences cannot be adequately addressed before national roll-out begins," said Dame Anne Begg.

"The Universal Credit pilots (Pathfinders) will begin in the north west of England in April 2013 and full national roll-out is due to start in October 2013. Significant further work needs to be carried out before then to ensure that the concerns we have raised are addressed. The Government also needs to ensure that all the impacts of transition to Universal Credit are carefully monitored from the outset."

The report highlights a number of other areas of concern. Under Universal Credit, payments to cover the costs of rent will go to the benefit claimant, rather than direct to the landlord. This is a major change to the benefit regime for tenants in the social housing sector and for some in the private rented sector. The Committee says it accepts that many tenants will cope with this change but is concerned that some vulnerable claimants will be unable to manage making regular rent payments and may fall into arrears.

Dame Anne Begg said: "We believe that time needs to be allowed for a proper evaluation of the pilots which the Government is running on direct payments to tenants, followed by a phased implementation of direct payments, after appropriate safety net arrangements for vulnerable people have been developed and tested. We therefore recommend that, during the initial phases of Universal Credit implementation from April 2013, claimants who currently have their housing costs paid to their landlord should have the option to continue with this arrangement. It is also important for the Government to move quickly to publish a clear definition of 'vulnerable' groups within Universal Credit for whom it will not be appropriate to include housing costs in their benefit payment. It also needs to establish a robust process for proactively identifying claimants who are struggling to manage their housing costs so that they can be properly assisted before they fall into arrears and face eviction."

* Full report: Work and Pensions Committee - Third Report
Universal Credit implementation: meeting the needs of vulnerable claimants - http://www.publications.parliament.uk/pa/cm201213/cmselect/cmworpen/576/...