THE BLOG
11/07/2018 09:40 BST | Updated 11/07/2018 09:40 BST

Pause And Fix The Universal Credit Mess, Or Else Scrap It Altogether

A policy that actively seeks to penalise claimants is a perfect storm that will lead to widespread hardship

Peter Byrne - PA Images via Getty Images

Having taken nearly as long as the First and Second World Wars combined, the roll-out of Universal Credit has been one of Whitehall’s great disasters.

What was once a flagship scheme to ‘make work pay’ by rolling a range of benefits into a single payment has become a byword for institutional sclerosis and incompetence.

The policy is eight years late and has seen more launches than Cammell Laird. It’s also cost £1billion to implement (so far) and passed through the hands (or slipped through the fingers) of five secretaries of state.

Policy disaster it may be, but ministerial blushes pale against the actual effects of the policy.

Warnings have been consistently made that the roll-out has been botched, with vulnerable people struggling to claim the new benefit, let alone the awful delays of up to 12 weeks with actually receiving payments.

Last month, Esther McVey, the work and pensions secretary, was forced to apologise to Parliament for misleading the House of Commons after spinning warnings from the National Audit Office about the rollout.

The NAO’s head, Sir Amyas Morse, the comptroller and auditor-general, took the extraordinary step of publishing an open letter correcting her for suggesting the NAO wanted a faster rollout when, in fact, they had warned the DWP about the need to pause the policy, learning from the experiences of ‘claimants and third parties’ before any more problems are caused.

Astonishingly, Sir Amyas said the DWP ‘has not measured how many universal credit claimants are having difficulties and hardship’ with figure showing 40% of claimants experiencing financial difficulties when they moved to UC, while a quarter reported a problem with making an online claim.

‘We also know that 20% of claimants are not paid in full on time,’ Sir Amyas wrote, ‘and that the department cannot measure the exact number of additional people in employment as a result of universal credit.’

Another basic failing is that there has been no impact assessment on the whole benefits system. This includes the range of support traditionally offered by local government in the form of discretionary payments. Given the length of time UC has been in gestation, this is a scandalous oversight.

Many councils have been forced to abandon discretionary support amid the austerity cuts they have been forced to endure, which has removed a vital safety net for the poorest.

In Liverpool, we retain a range of support schemes and last year spent £23million dealing with homelessness and poverty, offering a range of crisis payments and housing support above and beyond our statutory duties.

It’s a political choice I have made to support the most vulnerable with every mechanism at my disposal, but supporting people before they reach crisis point is cheaper in the long run, as their situation costs more to deal with downstream.

This is why we also run a Benefits Maximisation Service of specialist welfare advisers, who last year helped to secure an extra £10.5million for Liverpool families.

Perhaps what’s most disgraceful about the roll-out of Universal Credit is that claimants are being treated as though they only exist in a Whitehall petri dish. We need to know - not assume - that everything with the policy is working properly, including processing applications and making payments – before it is inflicted on claimants.

You don’t instil budgeting skills by making people wait up to three months for their benefits. All that does is throw them into the arms of payday lenders and the endless, exhausting and frankly terrifying cycle of juggling money you simply don’t have. As frontline welfare staff know only too well, it pushes families into absolute penury.

But as well as pausing it to work out the problems, Universal Credit needs to be reset as a policy. What is it trying to achieve? In the beginning, there was a degree of cross-party agreement around the principle of simplifying the benefits system and removing perverse disincentives, ensuring that ‘work pays.’

But UC was designed a decade ago in a different economic climate, long before austerity and before the calamitous decline in living standards became a running feature of our economy.

This consensus does not, however, stretch to the current Tory version of UC, which does so much to instil a divide between the deserving and underserving poor. This is the rotten heart of the Government’s welfare changes.

The whole thrust of this government’s agenda serves to delegitimise welfare provision. Instead, we need a system that creates social solidarity and genuinely helps people into work, without hassling disabled people into illness, or castigating single parents trying their best to bring up their children.

UC is set to roll-out across the whole of Liverpool in the autumn. Already, my city is reckoned by the Joseph Rowntree Foundation to have the second highest level of ‘destitution’ – not just poverty – but actual destitution – in the country.

Piling Universal Credit - a policy that actively seeks to penalise claimants and take money out of their pockets - onto an already difficult economic situation in Liverpool is a perfect storm that will lead to widespread hardship the likes of which we have not seen since the 1980s.

It’s time to pause the roll-out of Universal Credit and listen to people on the frontline who are warning of the deep flaws with the policy and fix them – or scrap it altogether.

Joe Anderson is the Mayor of Liverpool