Universal Credit: increasing hunger by design
Universal Credit should be paused until the design and implementation flaws are rectified.
The Joint Public Issues Team’s briefing on Universal Credit, a new social security system being rolled out across the country, sets out the problems with the design, which turn it from a poverty reducing measure to a poverty increasing measure.
The failures of Universal Credit have become increasingly apparent. Large numbers of project workers and clergy have contacted the Churches’ Joint Public Issues Team asking them to raise concerns about the new system. This is very unusual, and the level of concern and anger is obvious.
Churches are concerned that the design of Universal Credit does not sufficiently take into account the lives, skills and resources of the least well off, and as a result will lead to greater debt, poverty and exclusion; it should be paused until these design and implementation flaws are rectified.
The design of Universal Credit (UC) does not reflect the realities of those who must rely on it.
The design assumes substantial savings, IT access and literacy as well as monthly salaries. While these are the norm for many members of society, including those who designed UC, they are not the experience of many people who will have no choice but to rely on UC.
As Universal Credit is a single payment combining a number of benefits, the accuracy and timeliness of payments is even more crucial than for the legacy benefits.
UC payments are often delayed, inaccurate and the National Audit Office indicates that this is not expected to improve.
The monetary value of Universal Credit continues to be significantly eroded.
The benefit freeze, cuts to work allowances, cuts to the underlying tax credit rates and a number of other detailed changes have transformed UC from a poverty reducing measure to a poverty increasing measure.
4 in 10 claimants report they are in serious financial difficulties.
The design of Universal Credit leaves families who do not have savings with no choice but to go into substantial debt if they wish to pay their rent and feed their children.
The choice to create an inflexible monthly cycle necessitates a substantial wait for the first UC payment. A government which views debt in low income families as a key “pathway to poverty” has chosen to solve this design problem in UC by offering large loans.
Repayments of these loans will make a substantial impact on a family’s ability to make ends meet for at least a year.
Universal Credit is designed around claimants having good IT skills and ongoing internet access yet this is not true for considerable numbers of people, especially poorer and disabled people.
Self-employed people often do not have the regular monthly income that Universal Credit is designed around.
While in good months when income is high the UC payment is reduced as normal, in low income months a “minimum income floor” applies preventing UC from increasing to compensate as it would for employees.
Early data on Universal Credit trials and job outcomes was based only on single people without children who were fit and ready for work.
Whilst the data for these easiest of cases is positive it tells us nothing about how UC affects the more complex cases of those with children, those unfit for work, or those in work but with a low income who will form the vast majority of claimants.
Sanctions are more common under Universal Credit than the previous system.
Sanctions have become more frequent, more severe and the number of families living under threat of sanction is set to double and include working people.
Given these issues, the Churches have now joined the growing number of charities and civil society groups calling for Universal Credit to be delayed until fundamental problems with the design and implementation have been resolved.
While the government contends that this would lead to 250,000 fewer people in work, the published evidence does not support this claim.
Evidence from the Citizens Advice Bureau (CAB) and the Trussell Trust supports what has been reported anecdotally by individuals, social action projects and church leaders, which is that Universal Credit causes many families hardship, that landlords find it difficult to rent to families supported by Universal Credit and that the problems people are having are taking months to resolve.
The single minded focus on financial incentives has had damaging consequences.
By design the poorest families are required to get deeper into debt to make ends meet and low-paid families with weekly pay-packets jobs are faced with irregular Universal Credit payments as well as the budgeting and administrative difficulties that go with it.
Universal Credit is expected to increase child poverty as financial support especially to families with children has been substantially eroded.
The design of Universal Credit has not sufficiently taken into account the lives, skills and resources of the least well off.
The Joint Public Issues Team commends the work of Poverty Truth Commissions, where people struggling against poverty have the opportunity to work alongside officials and policymakers so that their experiences are given appropriate weight. And suggests that this type of process would be a model for repairing and improving Universal Credit.
Please sign this petition calling on the Prime Minster to fix Universal Credit.
And please write about this to your MP.