The CSJ Work and Welfare Unit submission on Universal Credit to the Work and Pensions Committee

The Work and Pensions Committee has been conducting a review into the Government’s roll out of Universal Credit (UC). We have attached our submission here.

The submission comes at a time of heightened frustration around UC. The debate has become overly politicized, because, as the CSJ has stated UC has been proven to meet it’s primary aim of helping support more claimants into work and the slow roll out allows for tweaks to be made.

The submission makes a number of recommendations to both the committee and government for helping ensure UC reaches it’s potential. UC will be claimed by some 7 million people across the UK, and will be the most significant benefit for any working age adult either in or out of work. It will be a single mechanism for helping reach the poor and disaffected in the UK. Our recommendations are:

1. Phase-out the seven-waiting day period — The seven non-eligible days mean most people who lose their job and rely on the welfare system as a safety net never receive any money for their first week out of work. UC is supposed to mirror the payment cycle of someone in work, however no-one in paid employment works for the first seven days for free. This is forecast to cost £140 million in the first year.
2. Further improve the taper rate and re-invest in work allowances — The Government should reinvest money take out of the system in 2015. It took a welcome and encouraging step at the last Autumn Statement to improve the taper rate by two per cent, moving it from 65 to 63 per cent. Reducing the taper rate from 65 to 63 per cent is forecast to cost approximately £1 billion over five years . So, we forecast similar costs when reducing the rate to 60 per cent. The CSJ believes that this good first step should be built upon, and the taper rate moved to 60 per cent, such that the poorest workers are enabled to keep more of what they earn. They should also reintroduce work allowances that had been cut in 2015. Re-investing in work allowances is forecast by the IFS to cost £3.4 billion by 2020/21 .
3. Make advances widely available to those who need it — Work Coaches need to better communicate the availability of advances and should use them in any situation where financial stress for a claimant is possible. If DWP are concerned that those who need money before the 6-week mark are not getting it, they should consider making them a default for a period.
4. Accelerate the introduction of Universal Support — DWP Universal Support delivered locally trials proved the inherent value in an integrated system of identifying claimants with complex problems and triaging them towards services that can support them with financial budgeting, housing, debt and addiction problems, as well as support to get back in to work. The DWP should accelerate the roll out of a Universal Support programme that provides triaging services for UC claimants that are most in need of help.
5. Invest in Work Coaches — Strong one-to-one support for claimants is essential if they are to re-enter the labour force after a long period. Work Coaches need to be trained to better handle problems that claimants with complex problems may face when applying for UC. Work coaches’ success should be measured in terms of job retention and productivity of a claimant in the long term.
6. UC can be used to support up-skilling — After the full roll out of UC, the DWP should consider increasing payments related to training for claimants. Currently claimants must sign a claimant commitment with Work Coaches that can force them to seek training support as part of finding a job. However, in an effort to support lifelong learning and increased levels of both occupational and wage mobility, UC can be used to give claimants the resources to seek training services independently.

Once these have been implemented, UC can reach it’s full potential.