The introduction of Universal Credit is causing “unacceptable hardship and difficulties” for many of the people it was designed to help, a damning new report by a select committee of MPs has found.
The influential Public Accounts Committee, which scrutinises public spending, has criticised the implementation of the flagship benefits reform programme - saying the Department for Work and Pensions (DWP) has developed a “culture of denial” over Universal Credit’s failings.
The cross-party committee also accused the DWP of being “disturbingly adrift of the real-world problems” as it called for urgent action in next week’s budget to offer relief to people who are currently suffering under the system.
Public Accounts Committee chair, Labour MP Meg Hillier, 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.
“Its apparent determination to turn a deaf ear to the concerns of claimants, frontline organisations and Parliament is of real concern. The culture needs to change.”
The report set outs the conclusions of an inquiry into the ongoing roll out of Universal Credit. It found the DWP was responsive to feedback from its staff through its digital systems. But the report said the department has “persistently dismissed” evidence of hardship presented by people claiming the benefit and accuses it of “refusing to measure what it does not want to see”.
In other scathing findings, the report says:
- The DWP’s systemic culture of denial and defensiveness in the face of any adverse evidence presented by others is a significant risk to the programme.
- Universal Credit causes financial hardship for claimants including increased debt and rent arrears, and forces people to use food banks.
- The DWP is failing vulnerable claimants because it places too much reliance on the discretion of its work coaches to identify and manage the needs of people requiring extra support.
- The package of support to help claimants adjust to Universal Credit is not fit for purpose.
- Universal Credit is pushing costs onto the local organisations that support claimants, including local authorities, housing associations, and food banks.
- The Department is unable to measure its objective of getting 200,000 more people into work.
The Public Accounts Committee said it was “seriously concerned” about the DWP’s ability to transfer around four million people from existing welfare benefits onto Universal Credit without causing further hardship to claimants.
The implementation of the new system began in April 2013 and some 1.2million people are now receiving Universal Credit payments. Under sweeping reforms, the new system merges six existing working-age benefits into one single monthly payment and the government says this will simplify processes and allow anyone who is working, or working more hours, to be better off than they would be if they were not working.
But Universal Credit has become associated with administrative cock-ups, intentional delays in payments and cuts in the amount of money people receive.
In 2013, the Public Accounts Committee raised concerns about a “culture of reporting good news and denying problems that emerge” at the DWP. Then in further reports in 2015 and 2016 the committee warned about the department’s continued lack of transparency.
In its latest publication, the cross-party committee has now said it is “hugely regrettable the department has not heeded these warnings” but instead continued with its “fortress mentality” and, as a result, is failing people who are struggling to adapt to the way Universal Credit works.
The Secretary of State for Work and Pensions, Esther McVey, announced a delay to Universal Credit’s roll-out last week to allow more time to resolve some of the issues that have plagued its implementation. She has reportedly admitted to Cabinet colleagues that some claimants will be worse off by £200 a month as a result of the switch to Universal Credit.
But the Public Accounts Committee said the announcement of the new “slow and measured” approach is not a solution on its own. It has said current problems are not addressed by this measure and additional funding must be forthcoming or the hardship for many is likely to continue.
The MPs’ report calls on the DWP to work with third party organisations to help shape the new programme, taking account of claimants’ feedback.
The committee chair pointed to the DWP’s slow response to correcting underpayments in Employment Support Allowance as evidence of the “dismissive attitude and troubling pattern of behaviour” from the DWP.
“As a priority the department must demonstrate a tangible shift in the way it listens and responds to feedback and evidence,” said Hillier.
“Meanwhile, the government’s recent announcement of changes to the roll out of Universal Credit offers no guarantee that the problems facing claimants will be resolved.
“We will be watching Monday’s budget carefully and, in its formal response to this report, expect government to take meaningful action on our recommendations.”
As the autumn budget approaches, speculation is rife about whether Chancellor of the Exchequer Philip Hammond will allocate funding to relieve some of the pressure on the Universal Credit roll out, which was directly impacted by £3billion of cuts in former chancellor George Osborne’s budget in 2015.
Despite a cascade of mounting criticism over Universal Credit, even from within the ranks of the Conservative Party, the government is resolute that it is the right way forward to bring about lasting reform of the welfare system and incentivise people into work.
A Department for Work and Pensions spokesman said: “We will carefully consider the findings in the report – a number of which we are already working on. For example, 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 onto 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 to 21-year-olds, making direct payments to landlords, offering 100% advances and providing an additional two weeks of housing benefit for claimants.”