Universal Credit

Debate between Helen Goodman and Sheila Gilmore

Wednesday 6th March 2013 Commons Chamber

[Sheila Gilmore]

My hon. Friend raises another important aspect. People have run up large bank charges, often inadvertently, on a very limited income. They might decide not to use the bank account any longer because that is easier, or the account may even be suspended.

Many warm words have been spoken about credit unions, but if we are honest about it, in most parts of the UK—the situation might be slightly different in Northern Ireland—credit unions are pretty small and cover only a relatively small part of the population. If we seriously wanted to increase their use, we would have to fund that properly and give them some ability to expand to the extent required. I would be more than happy to direct constituents in that sort of difficulty to a credit union, but I know that the credit union serving the local area currently has very limited capacity to expand. We have to think about that extremely seriously.

Another question considered today was that of the direct payment of rent. There are six demonstration projects, and indeed a report was published some time ago, but it was what the researchers called a baseline project report. In other words, it effectively looked only at people’s attitudes and capacities before the project got going; it proves nothing about whether it is working. Further data published by the DWP in December 2012 showed that in four months 8% of rent had not been collected. At that stage, 316 tenants had already been switched back to direct payment to the landlord, and the range of collections was actually greater than the 92% would suggest. In one project in an Edinburgh housing association, 63 of the 1,832 tenants were switched back to direct payments in the first four months, which I think is a substantial portion in a relatively short period.

It also appears—this will have to come out in the research very clearly—that some of the pilots have excluded some of the people most likely to fail. The pilot in Oxford apparently excluded those considered to be vulnerable, and the one in Wakefield excluded those who did not already have a bank account, so some of the difficult cases have not been included. That is fair enough in a pilot, but those cases must be taken into account before it can be claimed that all will be fine when this is rolled out more fully.

Members have spoken at length about the “digital by default” approach. I am not a luddite. I think that moving towards online claiming, wherever possible, is a good idea. In fact, when I was the convenor of housing on City of Edinburgh council we started a choice-based lettings system. It was possible to apply through a newspaper, people could fill in a form in the more traditional way, or they could apply online. Some people, including tenants’ groups, told us that we could not do it online because people would not be able to access it. We replied that we were giving people the choice. The online take-up was actually higher than many people had feared. Some of them will be getting help to do that, and that is the distinction we have to see.

There is a problem with the top-line figure, which is constantly quoted, of 78% for the proportion of claimants who already use the internet. It is drawn from research done for the DWP. It revealed that 78% have used the internet, but only 48% said they used it everyday, and that includes people in work, on tax credits and right across the whole spectrum. When we break the figures down, we see, for example, that 60% of people who are in receipt of incapacity benefit said that they had used the internet, but only 31% used it every day. There are some important distinctions within these groups.

If the new system frees up more adviser time, that can only be a good thing, but we need to know that that is really going to happen and where it is going to happen. The current situation appears to be quite stressed already. I have been told, and claimants’ experiences tend to back this up, that in Jobcentre Plus in my city people barely get four minutes with an employment adviser. Time is very stretched as it is.

[Helen Goodman]

Does my hon. Friend agree that another problem is that the voluntary sector advice agencies are also suffering from a shrinkage of resources? For example, the citizens advice bureau in Spennymoor in my constituency has only a third of the level of resources that it had two years ago.

[Sheila Gilmore]

There is undoubtedly a reduction in resources. Many of the advice agencies that I have contact with are having to tell people that they cannot get an appointment for three weeks, or even four.