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You can find the current article at its original source at http://www.theguardian.com/politics/2014/jun/17/cuts-universal-credit-work-incentives-review
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| Cuts may undermine work incentives in universal credit | Cuts may undermine work incentives in universal credit |
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| A cross-party review of universal credit is being launched amid new evidence that funding for the project has been cut so severely that its original aim to provide incentives for people to get into work could be undermined. | A cross-party review of universal credit is being launched amid new evidence that funding for the project has been cut so severely that its original aim to provide incentives for people to get into work could be undermined. |
| Technology flaws, implementation delays and Whitehall infighting have led to deep cynicism about the scheme, which is due to be fully implemented in 2017-18 covering as many as 8 million households. | Technology flaws, implementation delays and Whitehall infighting have led to deep cynicism about the scheme, which is due to be fully implemented in 2017-18 covering as many as 8 million households. |
| Many critics claim the scheme is dead, but although Labour has been fiercely critical of the way in which universal credit has been implemented, the shadow work and pensions secretary, Rachel Reeves, has not yet said she would scrap the reforms. | Many critics claim the scheme is dead, but although Labour has been fiercely critical of the way in which universal credit has been implemented, the shadow work and pensions secretary, Rachel Reeves, has not yet said she would scrap the reforms. |
| The expert review, to be chaired by the welfare expert Nicholas Timmins, is being launched by the Resolution Foundation thinktank and will focus on structural redesigns that may be required to restore work incentives. | The expert review, to be chaired by the welfare expert Nicholas Timmins, is being launched by the Resolution Foundation thinktank and will focus on structural redesigns that may be required to restore work incentives. |
| The scheme is currently being implemented on a limited pilot basis in some jobcentres, and that progress is likely to be re-examined in a second report by the National Audit Office before the election. | The scheme is currently being implemented on a limited pilot basis in some jobcentres, and that progress is likely to be re-examined in a second report by the National Audit Office before the election. |
| In total, 8 million households – half of them in work – will be eligible for UC, which has been designed as a single payment to replace six existing types of benefit or tax credit. Half of all families with dependent children will be eligible, making it vital that UC's structure works and that recent revisions do not undermine its effectiveness. | In total, 8 million households – half of them in work – will be eligible for UC, which has been designed as a single payment to replace six existing types of benefit or tax credit. Half of all families with dependent children will be eligible, making it vital that UC's structure works and that recent revisions do not undermine its effectiveness. |
| Initial work by the Resolution Foundation shows that by 2018 cuts to the basic and work allowances will mean UC is £685 a year less generous for a lone parent with two children, saving the government £1.7bn a year. | |
| The structure of UC may be badly targeted to protect second earners, according to Resolution Foundation. At present, a second earner under UC can lose as much as 76% of their earnings once they make enough to pay income tax. | The structure of UC may be badly targeted to protect second earners, according to Resolution Foundation. At present, a second earner under UC can lose as much as 76% of their earnings once they make enough to pay income tax. |
| The review will also see whether the coalition was wise to omit council tax support from UC. There has been widespread concern that a household receiving UC will see its earnings eaten away by the means-testing of council tax support. | The review will also see whether the coalition was wise to omit council tax support from UC. There has been widespread concern that a household receiving UC will see its earnings eaten away by the means-testing of council tax support. |
| The review will look at how those in work may face loss of UC if they cannot show jobcentre staff they are unable to earn more than £220 a week. If they are earning less than this they may be required to take a different job or work longer hours. | The review will look at how those in work may face loss of UC if they cannot show jobcentre staff they are unable to earn more than £220 a week. If they are earning less than this they may be required to take a different job or work longer hours. |
| It appears that claimants of UC could face the same sanctions regime as is applied to claimants of jobseeker's allowance if they cannot show they are seeking longer hours, but there is much scepticism about how this would apply. Similarly, the self-employed under the UC regime will be subject to interviews to see that they are truly gainfully employed. | It appears that claimants of UC could face the same sanctions regime as is applied to claimants of jobseeker's allowance if they cannot show they are seeking longer hours, but there is much scepticism about how this would apply. Similarly, the self-employed under the UC regime will be subject to interviews to see that they are truly gainfully employed. |
| Finally, the review will examine the way tax cuts prioritised for after the election could be undermined by the impact on UC. The review team suggests families receiving UC will lose at least £65 out of every £100 tax giveaway, and £72 in every £100 where council tax is already withdrawn. | Finally, the review will examine the way tax cuts prioritised for after the election could be undermined by the impact on UC. The review team suggests families receiving UC will lose at least £65 out of every £100 tax giveaway, and £72 in every £100 where council tax is already withdrawn. |
| Gavin Kelly, the Resolution Foundation chief executive, said: "Universal credit is an incredibly ambitious and important reform but the recent focus on the slipping timetable together with the complexity of the underlying policy means that some of the underlying policy changes have not received the scrutiny they deserve." | Gavin Kelly, the Resolution Foundation chief executive, said: "Universal credit is an incredibly ambitious and important reform but the recent focus on the slipping timetable together with the complexity of the underlying policy means that some of the underlying policy changes have not received the scrutiny they deserve." |
| He said the beginning of the next parliament was likely to be the last opportunity to make changes to UC. | He said the beginning of the next parliament was likely to be the last opportunity to make changes to UC. |
| The review team includes Giles Wilkes, a former economic adviser to the business secretary, Vince Cable, as well as Mike Brewer, a former IFS economist who was one of the first advocates of the reform five years ago. | The review team includes Giles Wilkes, a former economic adviser to the business secretary, Vince Cable, as well as Mike Brewer, a former IFS economist who was one of the first advocates of the reform five years ago. |
| A DWP spokesman said: "The reality is universal credit is already making work pay as we roll it out in a careful and controlled way. By the time it is fully operational some 3m households will be better off by an average of £177 a month."Universal credit is already live in 10 areas and will start expanding to the rest of the north-west this month. Jobseekers in other areas are already benefiting from some of its positive impacts through help from a work coach, more digital facilities in jobcentres, and a written agreement setting out what they will do to find work." | A DWP spokesman said: "The reality is universal credit is already making work pay as we roll it out in a careful and controlled way. By the time it is fully operational some 3m households will be better off by an average of £177 a month."Universal credit is already live in 10 areas and will start expanding to the rest of the north-west this month. Jobseekers in other areas are already benefiting from some of its positive impacts through help from a work coach, more digital facilities in jobcentres, and a written agreement setting out what they will do to find work." |
| • This article was amended on 18 June 2014. An earlier version said that "cuts to the basic allowances will mean UC is £685 a year less generous for a couple with one child". This has been corrected. In addition a DWP comment was added. |