Universal Credit Regulations 2013

Lord Touhig Excerpts

Wednesday 13th February 2013 Lords Chamber

[The Lord Bishop of Worcester]

My Lords, I welcome the introduction of universal credit. I think it is a very important step forward. Like other noble Lords, I am grateful to the Minister for all the work that he and his colleagues have put into the regulations before us today.

However, I am concerned about the inadvertent hardship that might be caused to some of the most vulnerable in our society. The report of the inquiry led by the noble Baroness, Lady Grey-Thompson, Holes in the Safety Net: The Impact of Universal Credit on Disabled People and Their Families, has already been referred to by the noble Baroness, Lady Sherlock. It clearly sets out the concerns of disability charities and the millions of people they represent. I want briefly to highlight one of the issues about which I feel concern: the impact on families with disabled children.

As I understand it, the regulations laid before us today propose to reduce the level of financial support to most disabled children from £57 a week under the current system to just £28 a week, or £124 a month—a reduction of nearly £30 a week. According to the Government’s own estimates, 100,000 disabled children will be affected. Only the most severely disabled children who are on high-rate care components of the disability living allowance or registered blind will be unaffected.

Many parents of disabled children already struggle to find the money to cover the extra costs of having a disabled child, such as specialist adaptations to their home, access to disability-friendly services and higher travel and childcare expenses. Already, 28% of households with a disabled child are living in poverty, and this rises to around 50% if the additional costs associated with being disabled are taken into account.

For those affected by this further reduction in their income, the impact could be very serious. Two-thirds of them say that they will have to cut back on spending on food and more than half say that they will get into debt, yet on Monday we heard in the debate on the Welfare Benefits Up-rating Bill that the lower disability addition of universal credit, as well as being cut in half, will be now uprated by just 1% a year in 2014 and 2015, well below the expected rate of inflation. That is why one of my colleagues on these Benches will support an amendment to remove the child disability elements of universal credit from the 1% cap.

I highlight to your Lordships the serious concerns raised in the report on these and other areas produced by the inquiry headed by the noble Baroness, Lady Grey-Thompson. I urge the Minister to review and monitor the impact of universal credit on disabled people, and in particular on families with disabled children so that this policy can better meet its aims of supporting those in greatest need constructively.

[Lord Touhig]

My Lords, we have had a very good debate and I do not want to spoil it, so I shall not detain the House for more than a few minutes. As the Minister knows, I am supportive of the whole idea of universal credit, but have concerns about the IT system that will be essential to make it work. To be fair to the Minister, I have had some very helpful conversations with him about universal credit and I have tabled a number of Questions which he has answered, although I am not entirely happy with some of the Answers.

The implementation of universal credit has been described by Margaret Hodge, the chair of the Public Accounts Committee in the other place, as a train crash waiting to happen, a point made by my noble friend Lady Hollis a little earlier. Having served on the Public Accounts Committee when I was in the other place, I can testify that no major government IT project in 20 years has been successful. Every one has gone massively over budget and or been years behind in its date of implementation.

I share the concerns of those who are worried about the implementation of the IT system to support universal credit. As I understand it, it will require two separate IT projects to piggyback on a third. That is a real challenge if ever there was one. I am also given to understand that, to make universal credit work, at least 80% of claims have to be made online. When I discovered this, I also discovered that the only benefit that was then claimable online was jobseeker’s allowance, which only 17% of claimants were claiming online.

As my noble friend Lady Hollis pointed out, 30% of the poorest families in this country do not have a computer and I presume that these are the people who need benefit support. What happens if 80% of claimants do not access the system and claim online? What happens to those who are unable to access the system on the computer? To make the system work effectively, it will require every employer to inform HMRC every month of how much they have paid every single employee and how much that employee has paid in tax. If any of those employers’ staff are on benefits and the employer fails to file the information by the due date that universal credit requires, there will be real problems for that person’s benefit because it is paid in real time.

I tabled a number of Questions about this. I asked the Minister,

“what assistance will be available to people receiving universal credit if their payments are wrong as a result of their employer failing to notify Her Majesty’s Revenue and Customs of their pay and tax details”.

In response, the Minister said:

“If earnings are not reported … for any reason, claimants will be requested to declare their earnings to DWP through the universal credit interface”.—[Official Report, 19/11/12; col. WA330.]

I then asked how the universal credit interface would operate. The Minister replied:

“The universal credit … will allow claimants to provide … details via a self-reporting tool”.—[Official Report, 26/11/12; col. WA24.]

That tool is the telephone. It does seem a bit Heath Robinson if that is how it is going to operate.

There are then widespread concerns about the cost of the IT project for universal credit. We are told that the Chancellor of the Exchequer has put it on the Treasury’s “at risk” list. That “at risk” status is given to projects that will go over budget or be late in delivery. I have asked a number of questions on this. Perhaps I may ask the Minister three brief questions about the cost of the IT project. First, of the £105 million total cost of universal credit in 2012, how much supported information technology development? I cannot seem to get answers to that point. Secondly, can the Minister give us exact figures for expenditure on developing universal credit’s information technology for the years 2012-13, 2013-14 and 2014-15? Finally, how does the current total cost estimate for universal credit’s information technology project compare with the Government’s original estimate? All these questions are relevant to making universal credit work. All across the House, people want it to work, but if the IT project is wrong, it simply will not and people will lose out as a consequence.