Universal Credit

Lord Beecham Excerpts

Thursday 16th November 2017 Lords Chamber

[Lord Beecham (Lab)]

My Lords, there is, as exemplified by today’s debate, widespread concern about the way universal credit has developed. I shall outline some of the problems that have emerged in Newcastle, as reported by the city council, of which I am a member, and the citizens advice bureaux.

The system has been implemented locally in stages since May 2016 and the process will be complete by May 2019. There are now in Newcastle 10,826 people on universal credit, and by 2022 working-age benefits will be cut by £123 million. Already there have been serious problems. The controversial six-week wait—this has been referred to many times today—before the first payment is made has led the council to make 327 crisis support scheme awards, totalling just over £29,000, to people awaiting payment or receiving an incorrect amount. As if that was not bad enough, the DWP has been found to be deducting fines from payments, often by as much as 40%, without considering the individual circumstances and hardship that might ensue.

There are also problems around the impact on council tax reduction. Hitherto, housing benefit and council tax reduction were applied for at the same time. Now only those universal credit claimants who indicate an intention to the DWP to claim separately for council tax reduction benefit will have information about their entitlement to universal credit sent to the council. The council has processed 3,723 claims for council tax reduction, which is many fewer than anticipated, and is working with Jobcentre Plus and Your Homes Newcastle to maximise the number of universal credit claimants claiming council tax benefits at the earliest stage. What will the Government do to facilitate this process?

There are particular problems for those residents for whom English is not a first language. Library staff, with the aid of interpreters, have helped over 100 households to obtain their entitlement, but there must be concern about those who have not sought that aid. Currently, Your Homes Newcastle has rent arrears attributable solely to universal credit of nearly £1.4 million.

There are some sad cases among those struggling with the new system. There is the single 25 year-old woman who lost her job, had no income for five weeks and faces eviction from her private rented property. Another woman, suffering from depression and with a baby daughter not yet a year old, was left entirely without income and had to be provided with food and supplies by the council. A 61 year-old man, unable to read or write, was booked into an assisted digital support session at the city library by Jobcentre Plus. The library staff managed to help him through the application, but how is he going to manage his email account in the future?

Newcastle’s citizens advice bureau has helped 357 people since July, and, in the last two years, 11.2% of all households on universal credit in the city. It relates some staggering statistics: 30% of the people it has helped had made 10 or more calls to the helpline and 40% were unaware of the possibility of obtaining an advance payment while waiting the six or seven weeks before the first payment was made. Even the likely reduction to a four-week delay is still going to cause problems.

There are problems with free school meals because of delays in proving the universal credit claim is successful until two days before the first payment. Any money paid for dinners before then is not reimbursed, with parents having to have recourse to the food bank.

There are also problems with people being persuaded to move from jobseeker’s allowance to universal credit. One man lost £100 a month in housing benefit which had included a disabled living allowance and the disability and severe disability premium which came with jobseeker’s allowance, but not with universal credit.

One woman was transferred to universal credit from jobseeker’s allowance where she had a disability and severe disability payment of £728 a month and lost £410 a month, so is left with some £317 a month in total and could lose her home because she cannot keep up her mortgage payments.

Whatever the good intentions, it is apparent that this transformation of welfare provision has been little short of a disaster for far too many people. It is taking much longer than estimated to roll out, leaves too many people struggling to make meagre ends meet and adds to the huge pressure on local councils and advice centres struggling to help those people navigate the uncharted waters of social security reform. It is not so much universal credit as near universal discredit.