THE BLOG

No Reshuffle at DWP - But Better Implementation of Its Flagship Universal Credit Is Needed

16/07/2014 14:16 BST | Updated 14/09/2014 10:59 BST

There's no change at the helm of Department for Work and Pensions in the reshuffle. Despite yesterday's train-carriage gossip, Iain Duncan Smith will remain in post as Secretary of State. And despite weeks of speculation that McVey would "lead the rise of tory women" and be promoted to improve the gender make-up of government she too will stay as Minister for Employment, albeit with new Cabinet status.

In a department facing as many challenges as the DWP, it's surprising not to see more of a shake-up. Just today, a study from the Department itself shows problems with the Bedroom Tax: over half affected in arrears but less than 5% managing to downsize. The backlog of people waiting to be assessed for Employment and Support Allowance is now almost three-quarters of a million, and a replacement for Atos - who has quit its DWP contract to deliver the Work Capability Assessment - has still not been found. DWP spokespeople have admitted that assessments for the new Personal Independence Payment are taking "longer than expected", as stories emerge of people waiting as long as six months. Last week the National Audit Office criticised the Department's handling of payments for its signature Work Programme.

But those problems pale into insignificance compared to the headache being posed by the coalition's flagship reform, Universal Credit (UC). This new programme - designed to replace six means-tested working-age benefits - is in a dire state. There are currently 6000 people receiving the benefit, far behind the one million recipients originally forecasted to be in receipt at this point. This delay means that hundreds of thousands of people are left affected by a half-completed set of reforms: left without the additional support to mitigate negative impacts, which Universal Credit should provide.

Despite ministerial assurances to the contrary, the UC business plan beyond the next twelve months has still not been signed off. (As an aside, it's interesting to note that just a week after head of the civil service Bob Kerslake broke this news, he has fallen victim to a reshuffle which has unconventionally gone beyond the government). But the news of an unagreed business case is just the latest revelation to cast doubt over Universal Credit's future. Two months ago the programme was given a damning 'reset' rating by the Major Projects Authority. The opposition are more and more frustrated by the lack of transparency around the programme andhave declined to commit to it in the long term. Instead Rachel Reeves has committed Labour to a thorough review of UC, should they be elected in 2015.

Meanwhile, the impacts of coalition's welfare reforms to date are increasingly being felt. From the benefit cap and bedroom tax to the below-inflation limit on benefit uprating, millions of families are affected. The increased severity of conditionality for jobseekers - another key element of the welfare reform programme - has meant that almost a million jobseekers had their benefits stopped last year. Research from several front-line organisations has shown the devastating effects of this half-finished set of changes to social security. Stories of families losing as much as 70% of their income are not uncommon, but even much smaller losses can result in an erosion of resilience as people are forced to focus on where the next meal comes from, rather than what they want or need in the longer term.

Universal Credit could offer many people the opportunity to mitigate some of these negative effects. It is fundamentally about simplifying the support that both jobseekers and those who are not able to work receive. While the increased payments in UC won't completely make up for the devastating reductions imposed by recent reforms, it is expected to lift 250,000 children and 350,000 adults out of poverty. And by making it easier to get into work, the policy could make many more better off.

That's not to say that UC as currently designed will work for everyone - concerns have been raised about the impacts for people with disabilities, lone parent families, and second earners. Furthermore, there are many issues with how UC is designed which could be particularly challenging to more vulnerable members of society. Without the right support in place, UC's digital-by-default approach could exclude many people who struggle with digital literacy - or simply don't own a computer. Similarly the change to benefits payments being made monthly, and with housing costs going to the recipient rather than the landlord, will be hugely problematic for people who are only used to budgeting for a week at a time. Citizens Advice has estimated that 9 in 10 UC claimants are currently unprepared for the changes that will be posed. And that's to say nothing of the complexities of joining systems between HMRC and DWP, or of making the system work equally well for the self-employed as for employees.

But the more Universal Credit is delayed - and the longer people are forced to wait in situations of real financial and emotional stress - the harder it will be to eventually implement it. The longer people have to they struggle with dramatically reduced income and confused implementation of the existing reforms, the more disengaged they become. People feel increasingly overwhelmed by the recent changes to benefits and this makes them less likely to engage with future changes. This could seriously imperil the success of Universal Credit. While there are real concerns about many aspects of Universal Credit - from monthly and direct payments to the financial impacts on certain claimant groups - its ongoing delay is only causing more problems.

It's essential that the Universal Credit project is moved along, and an unchanged ministerial team at the DWP in today's reshuffle shouldn't mean an unchanged approach to this reform. Universal Credit needs action and clarity now, not the obfuscation and posturing we've seen in recent months.