Announcing an extra £1 billion in funding over five years Chancellor Of The Exchequer Philip Hammond used his budget speech to declare: “Universal Credit is here to stay.”
His announcement of the extra funding to help ease payment problems for claimants, plus an extra £1.7 billion in work allowances, came after twin attacks which said the controversial benefit was causing ‘unacceptable hardship’ for claimants.
He told a packed House Of Commons: “Switching to Universal Credit is a long overdue and necessary reform. This is not just a welfare measure it is a major structural reform to our economy that will help to drive employment for years ahead.”
His statement followed strongly worded complaints from two separate Parliamentary committees which were highly critical of the new style benefit and called for its national roll-out to be stopped.
The House Of Commons Public Accounts Committee has accused ministers of presiding over ‘a culture of indifference’ to the hardship being caused by the government’s flagship welfare reform.
In a scathing report, the committee said Universal Credit is leading to increased debt, rent arrears and foodbank use. It further claimed that the ‘denial and defensiveness’ of the Department For Work & Pensions (DWP) is creating a significant risk to the new style benefit.
It claims the system has been made less generous than was first envisaged eight years ago, producing concerns that 3.2 million working families could lose £48 a week compared with payments they received under the old system.
Pushed over the edge
A separate report by the Works & Pensions Committee demanded a halt to the mass roll-out of Universal Credit until they can ensure no more claimants are ‘pushed over the edge’ into debt.
The cross-party committee warned that the support offered under the new system was ‘woefully inadequate’ and risked undermining them whole scheme.
In its report the committee said universal credit ‘falls far short of what is needed’ with vulnerable people needing more than the two hours of ‘personal budgeting and digital skill support’ currently offered.
It added: “Failure to overhaul universal support substantially now will place not only the well-being of claimants, but the success of the entire Universal Credit project, at risk.”
Public Accounts Committee chairman Meg Hillier said the DWP’s apparent determination to ‘turn a deaf ear’ to the concerns of claimants, frontline organisations and Parliament is of real concern and the culture needs to change.
She said: “This report provides further damning evidence of a culture of indifference at DWP — a department disturbingly adrift from the real-world problems of the people it is there to support.
“A department in denial cannot learn from its mistakes and take the action necessary to address the desperate hardship suffered by many universal credit claimants.”
Universal Credit was created by the government in 2013 in an attempt to streamline the benefits system by combining payments from six separate benefits into one – Job Seeker’s Allowance, housing benefit, children’s tax credit, working tax credit, income support and employment and support allowance.
It has been trialled in job centres in various parts of the country with a full roll-out originally planned for April 2017, but ministers have now delayed that until December 2023 ‘at the earliest’ while they try to iron out the problems.
Adapt and change
Work & Pensions Secretary Esther McVey insists that the changeover – which is meant to ensure work will always pay – has been helping the jobless into employment. But she has also acknowledged it needs to ‘adapt and change’.
She has admitted switching from the old style range of benefits could leave some people worse off, but said the most vulnerable would be protected and people could take on more work to increase their income.
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A DWP spokesman said: “We have recently begun a new partnership with Citizens Advice to deliver better support to the most vulnerable and are working with stakeholders to ensure the managed migration process for people moving on to universal credit works smoothly.
“So far this year we have already announced several improvements to universal credit, such as plans to reinstate housing benefit for vulnerable 18-21 year olds, making direct payments to landlords, offering 100 per cent advances and providing an additional two weeks of housing benefit for claimants.”