There’s been lots of coverage in the press this week about Universal Credit, the new benefits system that the government is in the process of rolling out. Cabinet papers released last month showed far too many people still aren’t being paid on time. And this week Esther McVey, Secretary of State for Work and Pensions, has admitted that some people will be worse off in this new system.
While it’s hard to argue with the aspiration behind Universal Credit — to make work pay and to simplify benefits — the stories we’re beginning to hear about the reality of Universal Credit are deeply worrying. Here’s just one of those stories, shared by a mum we’ve supported at Little Village who now volunteers with us to support other families:
“I have a 17 month old daughter and became a single parent when she was 3 months old so I had to apply for universal credit which was all new to me. It took ages to sort out and took a lot of bus rides to and from the Job Centre to get it sorted. It was so stressful because my money was running low and they said I will get the money in 6 weeks which is a long time to wait when you have no money.
They then offered me an advance which you have to pay back monthly. I had to take it because I had no money. I borrowed £300 and had to pay back £50 a month. It was a very stressful time for me and for someone with anxiety it didn’t help.
Once it was all sorted the money is not enough for anyone to live on. It’s very low and it gets to the point where you look for support, which I had in Little Village and also food banks. Universal credit is a joke and it doesn’t pay to be on it at all.”
We’ve got two big concerns, drawing on what we know from Little Village. First, at the very best, the gap between someone being assessed and receiving money is still five weeks. 1 in 6 people wait significantly longer than that. For the kinds of families we see at Little Village, that is an impossible burden. People don’t have spare cash to provide a cushion while they wait for that money to come through. That kind of wait quickly creates debts, which spirals terrifyingly fast into deeper financial challenges that can be almost impossible to recover from.
Second, in the short few years that Universal Credit has been around, it has already had eleven cuts made to it. The money people get from it, coupled with low wages and high rents, mean that many of the very people who keep this city going can barely afford to live here.
“I tried going back to work but again the paperwork was a nightmare. I got paid at the end of the month and then I had to pay childcare fees, then I had to prove all this to Universal Credit, and then I only got the payment two weeks later. It got very stressful, I felt like I kept annoying my manager as the paperwork wasn’t straightforward. One month they delayed my payments saying I hadn’t forwarded my invoice. I had proof that I had but it made no difference and I had to wait anyway.”
When organisations like the Trussell Trust report that demand for foodbank support has gone up 52% in areas where Universal Credit has been fully rolled out, compared to an increase of just 13% in other areas; when Secretaries of State acknowledge that people will lose out; when the government feels the need to give Citizens Advice £39 million to provide extra support to people who are at risk of losing out… all these things surely point to the need to ask whether Universal Credit is doing what it needs to do.
Every week at Little Village we see how powerful and universal the desire is to give every child the best start in life. When people understand the levels of child poverty that exist here on our doorsteps in London, they do not think it is ok or acceptable, especially when they learn that it is rising for the first time in a generation.
Addressing the challenge of improving living standards requires action on many fronts, of course. But whichever way you see things, part of the solution has to be a benefits system that acts as a support for families when times are tough. We need a safety net that’s designed to push people back onto their feet rather than dragging them further into poverty.
“In the end I wasn’t paid enough to work part time and have my child in a nursery. So I had to give up which lowered my confidence and self esteem. Now I have £447 to live on each month after rent and bills. Universal Credit has left me more in debt than I was and I see people becoming sick from all the stress they get from dealing with the system.”