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| It’s time the Tories woke up to the universal credit nightmare | It’s time the Tories woke up to the universal credit nightmare |
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| It is full speed ahead on universal credit. “It’s working,” David Gauke, the work and pensions secretary, declared to the Conservative party conference on Monday, in doing so disregarding a huge weight of evidence to the contrary, and confounding the massed ranks of critics in and outside of the party who are calling for an urgent pause and reset of this chronically troubled benefit system. | It is full speed ahead on universal credit. “It’s working,” David Gauke, the work and pensions secretary, declared to the Conservative party conference on Monday, in doing so disregarding a huge weight of evidence to the contrary, and confounding the massed ranks of critics in and outside of the party who are calling for an urgent pause and reset of this chronically troubled benefit system. |
| It is hard to tell whether this was just upbeat nonsense for party activists, or whether universal credit is now just too big to fail. For some Tories it is an article of faith that this expensive, wildly ambitious reform cannot possibly go wrong. Gauke, however, has a reputation as an intelligent, pragmatic minister; this may not have been the day to bring bad news to the true believers, but it felt nonetheless like an uncharacteristically reckless endorsement of a fragile system fraught with political risk. | It is hard to tell whether this was just upbeat nonsense for party activists, or whether universal credit is now just too big to fail. For some Tories it is an article of faith that this expensive, wildly ambitious reform cannot possibly go wrong. Gauke, however, has a reputation as an intelligent, pragmatic minister; this may not have been the day to bring bad news to the true believers, but it felt nonetheless like an uncharacteristically reckless endorsement of a fragile system fraught with political risk. |
| Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment and benefits, and tax credits) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work. | Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment and benefits, and tax credits) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work. |
| The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults means it is six years behind schedule and rollout will not be complete until 2023. | The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults means it is six years behind schedule and rollout will not be complete until 2023. |
| The original design set out a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. | The original design set out a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. |
| Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks. | Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks. |
| Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives. | Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives. |
| Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. | Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. |
| And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship. | And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship. |
| Already a small mountain of documentation detailing the ruinous impact of universal credit has piled up on the desk of the Commons work and pensions committee, just three weeks after it announced its latest inquiry. These submissions, from claimants, landlords, local authorities and charities, reveal a remarkable consensus: that for all its theoretical attractions, in practice universal credit is a bureaucratic nightmare and financial disaster for too many of those who have to engage with it. | Already a small mountain of documentation detailing the ruinous impact of universal credit has piled up on the desk of the Commons work and pensions committee, just three weeks after it announced its latest inquiry. These submissions, from claimants, landlords, local authorities and charities, reveal a remarkable consensus: that for all its theoretical attractions, in practice universal credit is a bureaucratic nightmare and financial disaster for too many of those who have to engage with it. |
| This is no surprise to anyone who has followed the lumbering progress of this social policy leviathan (five years behind its original schedule, and not due to be fully rolled out until 2022). Proof of universal credit’s direct role in fuelling personal debt, food bank use, rent arrears and eviction, as well as mental distress, has been accumulating for over a year. Warnings that these miserable outcomes were inevitable have been around for much longer. | This is no surprise to anyone who has followed the lumbering progress of this social policy leviathan (five years behind its original schedule, and not due to be fully rolled out until 2022). Proof of universal credit’s direct role in fuelling personal debt, food bank use, rent arrears and eviction, as well as mental distress, has been accumulating for over a year. Warnings that these miserable outcomes were inevitable have been around for much longer. |
| In those areas moving on to the system from mid-November, many will face a Christmas without any income at all | In those areas moving on to the system from mid-November, many will face a Christmas without any income at all |
| Last week, 14 Tory MPs, led by prominent backbencher Heidi Allen, called for a halt in the programme, their leaked letter neatly undermining the suggestion put about by ministers that criticism of universal credit was just partisan. Allen’s detailed knowledge of how universal credit works in reality (coupled with her genuine enthusiasm for the concept) makes her a powerful critic in a party that appears to prefer gushing accounts of universal credit’s miraculous achievements to the disturbing truth. | Last week, 14 Tory MPs, led by prominent backbencher Heidi Allen, called for a halt in the programme, their leaked letter neatly undermining the suggestion put about by ministers that criticism of universal credit was just partisan. Allen’s detailed knowledge of how universal credit works in reality (coupled with her genuine enthusiasm for the concept) makes her a powerful critic in a party that appears to prefer gushing accounts of universal credit’s miraculous achievements to the disturbing truth. |
| Ministers have set great store by “test and learn”, an approach to the development of large IT-led projects that ostensibly enables the operator to adjust the way the scheme works as it goes along, pinpointing teething problems and ironing out glitches. It is true that there are myriad relatively minor technical and design problems with universal credit, and some of these are beginning to be addressed (although critics would say this is a cumbersome and painfully slow process). But it is misleading to suggest that all will be well once IT teams have got round to sorting it. | Ministers have set great store by “test and learn”, an approach to the development of large IT-led projects that ostensibly enables the operator to adjust the way the scheme works as it goes along, pinpointing teething problems and ironing out glitches. It is true that there are myriad relatively minor technical and design problems with universal credit, and some of these are beginning to be addressed (although critics would say this is a cumbersome and painfully slow process). But it is misleading to suggest that all will be well once IT teams have got round to sorting it. |
| The biggest problems with universal credit are political, not technical: the arbitrary decision to impose a seven-day waiting period before a claim can be made (on top of a minimum 35-day wait for a first payment); the rigid insistence that the housing rent element be paid directly to the tenants (in Scotland, tenants can opt to have it paid directly to the landlords); the cuts to the working allowance that will leave many low-paid working households thousands of pounds a year worse off, and reduce work incentives for others. These are policy choices, not software bugs. | The biggest problems with universal credit are political, not technical: the arbitrary decision to impose a seven-day waiting period before a claim can be made (on top of a minimum 35-day wait for a first payment); the rigid insistence that the housing rent element be paid directly to the tenants (in Scotland, tenants can opt to have it paid directly to the landlords); the cuts to the working allowance that will leave many low-paid working households thousands of pounds a year worse off, and reduce work incentives for others. These are policy choices, not software bugs. |
| Some potentially big shocks await Gauke as univeral credit rolls out more widely this autumn, not least in those areas moving on to the system from mid-November, where the six-week wait means many new claimants will face a Christmas without any income at all. There are serious issues around childcare costs, about the reporting demands on self-employed claimants, and eligibility for free school meals. If it is to survive, universal credit needs a comprehensive rethink. | Some potentially big shocks await Gauke as univeral credit rolls out more widely this autumn, not least in those areas moving on to the system from mid-November, where the six-week wait means many new claimants will face a Christmas without any income at all. There are serious issues around childcare costs, about the reporting demands on self-employed claimants, and eligibility for free school meals. If it is to survive, universal credit needs a comprehensive rethink. |
| • Patrick Butler is the Guardian’s social policy editor | • Patrick Butler is the Guardian’s social policy editor |
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