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Universal credit isn’t as universal as it should be

On the 11th of January, Amber Rudd, the Work and Pensions secretary, delivered a passionate speech at the Kennington Park Jobcentre Plus, announcing new changes to the Universal Credit policy. Rudd, who took up the cabinet role just two months ago, seems to be on a mission to rebrand and improve the controversial welfare programme. Philip Hammond, the Chancellor of the Exchequer, declared that universal credit was “here to stay” with a £4.5 billion boost to the system announced in the Budget and a commitment to increase work allowances by £1,000 a year for 2.4 million households, as well as £1 billion to help people moving over from the old benefits system to Universal Credit. However, Universal Credit is often featured in political discourse eliciting controversial opinions, and in the past year alone there were numerous articles in newspapers – from ‘WalesOnline’ to the Financial Times – reporting stories of people’s ‘appalling’ experiences with Universal Credit (UC). Is there an issue with the implementation of the system, or is there a bigger issue with the design itself?

With over 1 million people currently claiming universal credit, the rollout has been plagued with administrative glitches causing delays – sometimes up to 5 weeks – in UC payments

Universal Credit in the United Kingdom merges six existing benefits, including housing benefit, child tax credit and Jobseeker’s Allowance, into one monthly payment. Modelled to replicate the pay structure of salaried work, payments made monthly in arrears are supposed to benefit by supporting people who are looking for jobs, single parents or disabled people. In theory this seems like a great model, as it proposes to help claimants by simplifying the welfare system, cutting fraud and encouraging work. However, the issues with this system seem to far outweigh the benefits. With over 1 million people currently claiming universal credit, the rollout has been plagued with administrative glitches causing delays – sometimes up to 5 weeks – in UC payments, putting poorer claimants at heightened risk of hunger and homelessness.

Philip Alston, the UN special rapporteur on extreme poverty and human rights, said single parents — 90% of whom are women — were the group worst hit by the scheme’s shortcomings

A report by Trussell Trust, the Foodbank Charity, stated that ““When Universal Credit goes live in an area, there is a demonstrable increase in demand in local Trussell Trust foodbanks. On average, 12 months after rollout, foodbanks see a 52% increase in demand, compared to 13% in areas with Universal Credit for 3 months or less.” Another insight can be found in the data released recently by GoFundMe, a crowdfunding platform, which shows there are currently 905 campaigns by people appealing for donations to help them survive on universal credit. While these observations cannot be considered as definitive proofs, it still suggests that the implementation of UC might have severe unacknowledged consequences. In November, Philip Alston, the UN special rapporteur on extreme poverty and human rights, said single parents — 90% of whom are women — were the group worst hit by the scheme’s shortcomings.

There are currently 905 campaigns [on GoFundMe]  by people appealing for donations to help them survive on universal credit

There also seems to be a fundamental issue within the system – it aims to encourage work but seems to instead disincentivise it. Clare McNeil, associate director of IPPR, a public policy think-tank, said that because of the way the payments reduce as claimants earn more, single parents earned little more for working 16 hours a week than for eight, giving many little incentive to work longer hours. Although this cannot be generalised for all claimants, it suggests the need to carry out more research from this perspective.

Going back to Amber Rudd’s speech, she has acknowledged a lot of these issues, for instance the grave matter of women being penalised due to the system’s structure, which she responded to by committing to ensure that by the end of the year household UC payments would be sent directly to the main carer, usually the woman. Moreover, she has delayed a vote in the House of Commons that was supposed to move 3 million people currently claiming benefits onto the UC programme – instead she will be asking MPs to approve the transfer of 10,000 claimants from July 2019 as a pilot scheme to closely monitor and understand the flaws of the system; a move that has won her some popularity among charities and other MPs. This move of studying 10,000 claimants could be the solution to a lot of the problems in the UC debate, as it would give the department a chance to gain insight on some of the issues highlighted above, and work to improve them.

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