Universal Credit: Lowestoft

Peter Aldous Excerpts

Tuesday 27th June 2017 Commons Chamber

[Peter Aldous (Waveney) (Con)]

I am pleased to have secured this debate, as it provides a timely opportunity to review the roll-out of universal credit in Lowestoft, which is in my constituency.

The full roll-out in Lowestoft began in May 2016. Significant problems have been encountered, with many vulnerable people placed in very difficult situations, and at times the system has struggled to cope. The position is now better than it was six months ago, but significant challenges remain. It is important for lessons to be learned before the roll-out to other areas accelerates this autumn.

Since the turn of the year I have been corresponding regularly with the Minister, highlighting the problems that have been encountered. I am grateful to him for taking those concerns on board, and for introducing measures that have led to improvements. I also thank him for visiting Lowestoft on 21 February, when he met staff from the jobcentre and representatives of Waveney District Council and Anglia Revenues Partnership to hear about the problems that had been encountered, and to hear their proposals for how the roll-out could be improved. That meeting was particularly poignant because the team from the council was led by its leader, Councillor Colin Law, who sadly passed away at the beginning of last month. Colin recognised that many vulnerable people in the local community were being placed in very difficult situations, and although not in good health himself, he was determined to ensure that the Government addressed their needs.

The principal problem with the roll-out has been the delay before claimants receive any payments. That has placed many vulnerable people in difficult circumstances, with no money to pay for the basic necessities of food and a roof over their heads. At the turn of the year my office was dealing with 20 ongoing cases, and when I visited a local food bank at that time, all the people whom it was supporting were there because of delays in receipt of their first payments. A further problem is that when those payments are received, they often do not include the housing element, which leads to a build-up of rent arrears.

The system that has been put in place is digitally based, requiring access to a computer. Many claimants immediately face the problem of either not having a computer or not being readily able to use one. The situation has been compounded by the fact that, initially at least, the IT systems were not functioning as well as they should have been. Constituents also experienced phone calls not being answered promptly, and then long delays while their problems were addressed. One constituent received very slow and inaccurate responses to his journal entries, and delays in the handling of his subject access request. When his housing element was eventually paid, it was for the wrong amount.

It is important to point out that universal credit requires those working at jobcentres—those on the frontline—to acquire new skills. They are no longer just the labour exchange. They need to be able to identify vulnerable customers at an early stage, to get to grips with housing challenges that were previously the responsibility of local housing authorities, and to work with the central universal credit team in building the universal credit model. All the Jobcentre Plus staff whom I have met are up for the challenge. They are determined to succeed, and it is vital that the Government provide them with the support and resources that will enable them to do so.

In the early stages of the roll-out, there was concern about the fact that the various agencies, including the Department for Work and Pensions centrally and Her Majesty’s Revenue and Customs, were not properly co-ordinated and working together with Anglia Revenues Partnership and Waveney District Council. In recent months that has improved significantly. The lesson to be learned for the future is that the roll-out will be successful only if everyone works together. There is a vitally important role to be played by the voluntary sector, including Citizens Advice and the local organisations that are helping people into work.

A specific problem in Lowestoft, which has created particular difficulties, is the seasonal nature of employment. That is a problem that will be encountered in other coastal towns, as well as in rural areas where there is seasonal agricultural work. The situation has improved, but challenges remain with housing, which I will come on to in a minute, and particularly with the transition from employment and support allowance to universal credit. At present, no transitional provision is in place for customers moving from income support ESA.

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Motion made, and Question proposed, That this House do now adjourn.—(Craig Whittaker.)

[Peter Aldous]

I have a constituent who was an ESA claimant. He was required to take part in a work capability assessment. His WCA was carried out, and it was decided that he no longer had limited capability for work and work-related activity. His ESA claim was thus disallowed. His appeal against that decision was successful, but as income-related ESA had been abolished and he had been required to transition to universal credit, he has found himself significantly worse off and facing serious hardship through no fault of his own and with no support to help him through a very challenging time.

Waveney District Council and Anglia Revenues Partnership have also identified the following ongoing concerns. First, universal credit payment delays and cash flow difficulties continue to be a problem for the council in respect of providing temporary accommodation. They urgently need a decision to be made to restore such administration back to councils so that it is treated in the same way as supported accommodation. Secondly, housing benefit recovery in universal credit remains a significant concern. Local authorities and the Local Government Association have proposed that housing benefit debt should be transferred to the Treasury to produce a better outcome for the public finances. Recovery from universal credit will be non-existent, thereby burdening councils with debt that they will not be able to recover.

Thirdly, although universal credit decisions appear to be improving, the housing element is often still being received only in the second or third monthly payment. This is a deterioration compared with national housing benefit performance. Fourthly, the continuing lack of universal credit management information does not provide an insight to assist councils to manage customers’ and landlords’ expectations. Finally, there are no plans for universal credit to share data with councils about housing benefit cases migrating to universal credit. This is needed for local council tax support schemes, discretionary housing payments and supported accommodation claims.

A further issue that should be highlighted is the fact that since universal credit was rolled out in Lowestoft, the level of unemployment has increased. In May 2015, it was at a low of 2.5%. It stood at 3% when universal credit was introduced in May 2016, and it had risen to 5.1% in May 2017. Much of the increase is due to the fact that, under universal credit, a broader span of claimants are required to look for work than was the case under jobseeker’s allowance. However, this raises the question of whether universal credit is fulfilling one of its objectives—that of better preparing claimants for the workplace and making it easier for them to move into full-time employment. We need to look at that to ensure that it is being adequately addressed.

[Jim Shannon (Strangford) (DUP)]

I sought the hon. Gentleman’s permission before asking him to give way. Does he understand, as many of us do, that the switchover to universal credit is proving very difficult? Does he agree that those who have physical and mental issues need a dedicated helpline to ensure that those vulnerable people do not feel overwhelmed and that they can understand the process of change? Many of them do not.

[Peter Aldous]

I am grateful to my hon. Friend for that intervention, and I agree with him. He talks about a dedicated helpline and, yes, that may be one way forward. I would also suggest that there needs to be front of house support and assistance in the jobcentres themselves.

Delays in the paying of universal credit have led to rent arrears building up and, as I mentioned, the situation is being compounded by the fact that the housing element has often not been included in the first payment. The feedback from the DWP nationally is that the timing of payments is improving and that if a tenant has a reasonable expectation of receiving their housing cost as part of the universal credit payment, the landlord should not take action to gain possession of a property and thus the tenant should not face the risk of eviction. In real life, it needs to be borne in mind that that approach is easier said than done and that the landlords have many costs and commitments themselves. Landlords are often in a position to reluctantly have to issue eviction notices as a last resort, but it should be pointed out that many landlords own only one or two properties and that the rents that they receive are a vital part of their income—often retirement income.

Delays in the payment of the housing element are triggering a downward spiral of events: arrears leading to evictions, leading to an increase in homelessness, putting added pressure on local authorities and housing associations to house those who are evicted. In due course, there will be a reduction in the supply of housing as landlords decide not to let to universal credit claimants.

[Ruth George (High Peak) (Lab)]

I thoroughly commend what the hon. Gentleman has been doing to support people on universal credit in his constituency and the enormous amount of work and effort that has gone into that. As someone who has been working for the shop workers’ union for 20 years, I have considerable experience, particularly from the past 12 months, of members who have been transferred on to universal credit and are suffering incredible difficulties and hardships, as the hon. Gentleman says.

The hon. Gentleman calls for councils to have their debt underwritten by the Government, but the situation is also a severe problem for housing associations where many universal credit recipients live, and many associations are suffering. I hope that he will allow me to support such cases being made to the Government before the scheme is rolled out any further.

[Peter Aldous]

I am most grateful to the hon. Lady for that intervention. I will come to address the concerns that housing associations have mentioned to me. Her point is interesting in that jobcentres have in the past dealt with people who are not in work to get into employment, but now they are also dealing with people who are already in work, which is a major game change for jobcentres to deal with.

There is a concern that universal credit, the objective of which is to bring people closer to the workplace and to prepare them for work, may actually be doing the opposite. People need a secure and stable home life to be able to prepare and plan for regular work. That cannot happen if they are sleeping on the streets, sofa surfing or living in a hostel. Housing associations also face problems and are taking on more staff to liaise with tenants at an early stage to prevent rent arrears from increasing and to limit the serving of eviction notices. That is an added cost that they can ill afford, and they would prefer to be spending time and money on repairs and on building much-needed new homes.

The alternative payment arrangements are in place to help prevent such problems from arising, but in many cases they are not working properly and the process is taking too long. By the time decisions have been made to put in place such an arrangement, the landlords have invariably obtained court orders for possession. It is important to identify at an early stage where it is appropriate to make direct payments to landlords, and the jobcentre in Lowestoft has put in place arrangements to do that. Consideration should be given to changing the system of universal credit staff only communicating about an account with a tenant’s explicit consent. The feedback that I am receiving from both social and private landlords is that a change to allow the landlord to open communications and make a request for an alternative payment would be welcome and positive.

Although I understand that the Government wish to empower tenants to manage their own money, there is an argument that such empowerment involves choice. Tenants should therefore be able to decide whether to have the rent paid directly or for it to pass through their own hands. Again, the feedback I am receiving is that many tenants would prefer their rent to be paid direct.

There is a need for full and proactive engagement with private landlords. That did not happen initially, but the situation is now improving and a local meeting between the DWP, Waveney District Council and private landlords is scheduled for 17 July to explore how best to address the problems. Hopefully my suggestions on alternative payments will be on the table for discussion.

The roll-out in Lowestoft has not gone well, but there are signs of improvement and examples of good practice have emerged, which I suggest should be replicated as universal credit is rolled out in other areas. Lowestoft jobcentre has a vulnerable persons officer, and I propose that additional attention and support is given to those with mental health challenges. The jobcentre works closely with the citizens advice bureau, which provides a money advice service in the jobcentre. There is an officer who liaises with the national universal credit team in the building of the model, and there are good working relationships not only with Waveney District Council and Anglia Revenues Partnership but with MyGo, the new youth employment service promoted by Suffolk County Council. Such joint and collaborative working is very much the way forward and must be promoted and properly resourced.

Consideration should be given to the following. First, the Government should respond to the Public Accounts Committee’s most recent report on the impact of the changes and delays to the universal credit programme on operational costs, staff and claimants. They should also update the Committee on how staff are being enabled to engage in testing and learning processes and to feed back concerns. I appreciate that the general election purdah period has delayed that feedback, but it is important if the universal credit model is to be improved as the roll-out accelerates.

Secondly, there needs to be an initial assessment as to whether universal credit is achieving its objectives of better preparing people for the workplace, making it easier to move in and out of work and improving incentives to work. Thirdly, with the roll-out scheduled to move into more rural areas, work is needed to ensure that both digital services and broadband connectivity are resilient enough to cope and that the system takes account of claimants’ use of the public transport system, which may in places be far from ideal.

Finally, there needs to be more transparency and closer working with all the partner organisations involved in the roll-out. There is a lot of heavy lifting involved, and jobcentre staff cannot do this all on their own if we are to ensure that universal credit customers receive the fair and efficient service that they are entitled to expect and that, up to now, has unfortunately let down a lot of people, placing some in very difficult and desperate situations.