Universal Credit Roll-out

Ruth George Excerpts

Wednesday 18th October 2017 Commons Chamber

[Mr Simon Clarke (Middlesbrough South and East Cleveland) (Con)]

It is the hallmark of a fair welfare system that it includes a strong and effective way of helping people who are out of work to find employment, and, by doing so, allows them to enjoy the dignity, confidence and self-reliance that comes with the ability to provide for themselves and their families. In that regard, we should never take the Government’s achievement since 2010 for granted. There are 3 million more people in work, unemployment in my constituency has halved, and our national unemployment rate is half that of the eurozone.

None of that happened by accident. It happened as a result of the hard work done by companies large and small, and as a result of carefully calibrated Government policy. That progress could—and, I believe, would—be undone in an instant were the shadow Chancellor ever to have an opportunity to unleash his programme of hundreds of billions of pounds of unfunded spending, and nationalisation with Parliament determining “fair compensation” for shareholders, all in the context of a crippling loss of investor confidence and a run on the pound. Despite the progress that we have seen, however, there is further to go, and that is precisely why I support universal credit. Its purpose is to deliver fundamental reform, and to replace a contradictory, and sometimes impossible, set of conflicting benefits with a single simplified payment.

The key question to ask about any policy is “What incentives does it create?” In the case of universal credit, the policy aligns the incentives so that work always pays. In my constituency, too many lives have been blighted for far too long by joblessness. I challenge Opposition Members to go to a ward such as Park End or Hemlington, and then tell me that it is wrong to end the perverse situation that we inherited whereby some people were losing £9 out of every extra £10 that they earned, which left them with virtually no incentive to work.

[Ruth George (High Peak) (Lab)]

What would the hon. Gentleman say to the nearly 7,000 families in his constituency who currently claim tax credit, and who, according to the Institute for Fiscal Studies, will be £2,500 a year worse off under universal credit?

[Mr Deputy Speaker (Mr Lindsay Hoyle)]

Order. I am more than happy to allow interventions, but if Members who choose to intervene want to look a colleague in the eye when that colleague drops off the list of speakers, let them do so, because that is what is going to happen.

--- Later in debate ---

[Ruth George]

Does my hon. Friend agree that, when the Institute for Fiscal Studies says that a further 3 million working families will be made, on average, £2,500 a year worse off, universal credit is never going to work for working families?

[Margaret Greenwood]

My hon. Friend makes a very strong point and I thank her for it.

Sir John Major recently called the roll-out of universal credit operationally messy, socially unfair and unforgiving. A former Government official, Dame Louise Casey, likened it to jumping off a cliff. Members are extremely concerned about what universal credit means for their constituents. Indeed, 12 Members from the Government Benches have written an open letter to the Secretary of State, calling on him to pause the roll-out, and their concern is widely shared around the House.

In response to concerns raised last week, we heard the Secretary of State reassure us that those who go on to universal credit are more likely to be working six months later than they would be had they been on legacy benefits, and that they are also more likely to be progressing in work. However, his statistics date from 2015 when universal credit claimants were, on the whole, single unemployed jobseekers, whereas the benefit is now being rolled out to people with much more complex circumstances. Furthermore, his statistics dated from before the cuts to work allowances were introduced in April 2016.

In response to concern from all parts of the House about what is happening now, the Secretary of State said that universal credit is about ensuring that our constituents are in a stronger financial position—

Oral Answers to Questions

Ruth George Excerpts

Monday 9th October 2017 Commons Chamber

[Mr Gauke]

We obviously continue to engage with the voluntary sector. I know what the CAB was campaigning for, but it did welcome what I said last week about advances; indeed, I am meeting the CAB later this week to further discuss how we can work together to deliver a very important welfare reform.

[Ruth George (High Peak) (Lab)]

While the increase in advance payments is welcome, does the Secretary of State not share my concern that the CAB has said that, on average, claimants have only less than £4 a month to pay back creditors? Therefore, advance payments are simply storing up problems for the future. Will he commit to giving the House a statement on the numbers who are coming into universal credit, the time it takes to pay them and the numbers who are forced into debt, rent arrears or hardship because of this policy?

[Mr Gauke]

We do update the House on information, as we have it, about the number of claimants for universal credit, the timeliness details and other details, and we will continue to do that. When it comes to advances, there is a concern across the House that people are left six weeks without receiving any support. Ensuring that advances are there and that they are made known to people is really important, and I hope all Members will do that.

Universal Credit: Lowestoft

Ruth George Excerpts

Tuesday 27th June 2017 Commons Chamber

[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.

[The Minister for Employment (Damian Hinds)]

I congratulate my hon. Friend the Member for Waveney (Peter Aldous) on securing a debate on this important issue. I know he joins me in supporting the aims of universal credit. I also know that the insight he brings, and the amount of thought and work he has put in, will prove a great asset as we strive collectively to make universal credit the best it can be.

I also recognise the concerns that have been raised, and I reassure my hon. Friend and parliamentary colleagues that work is under way to improve delivery. This debate provides a chance to show how the Department has removed obstacles to this flagship welfare reform. More than 1 million people have claimed universal credit, and 530,000 are currently on universal credit, of whom 6,067 are in his constituency. There are now more people claiming universal credit than jobseeker’s allowance, which is an important milestone.

[Ruth George]

The Minister says that more than 1 million people have claimed universal credit and that currently 530,000 are receiving it. Does that mean that nearly half a million people have put in a claim and are yet to receive universal credit? If so, those are frightening figures.

[Damian Hinds]

No, it does not mean that. Obviously, people come into the benefits system and may be receiving benefits for a period of time but then go into work that is sufficiently remunerative to mean that they do not fall within the universal credit system. As the hon. Lady will know, people’s circumstances change, and can do so often.

As I was saying, the digital take-up of universal credit is a great success story, with 99% of UC new claims made online, which will mean that in the long run the service is more expedient and more user-friendly. Overall, 82% of universal credit customers reported they were satisfied or very satisfied with the service, and figures show that it is working. Claimants are spending twice as much time looking for a job as under the old system and they are moving into work faster, with 113 people moving into work under universal credit for every 100 who were doing so under the pre-existing system.

One result of the roll-out of universal credit full service in my hon. Friend’s constituency—I grant that this may seem paradoxical—is that the claimant count has risen since the full service went live in May 2016. As he rightly acknowledged, that is because under universal credit the count is extended—it is broader—to cover a wider group of claimants than under the old jobseeker’s allowance benefit. This is part of universal credit’s design and ambition to encourage and support more people into work.

My hon. Friend has deep roots in the constituency and community he represents, and I am very aware that he works closely with the local authorities in his constituency to make sure the voice of East Anglia is always heard. I was very pleased to have the chance to visit Lowestoft jobcentre earlier this year—he mentioned that—accompanied by the leaders of the Waveney and Great Yarmouth councils. I am also aware that he has made subsequent visits to the jobcentre, which I hope he also found useful. That visit was a great opportunity for me to see how we are delivering universal credit in his constituency and to hear at first hand some of the concerns people have had.

I also want to join my hon. Friend in expressing condolences following the death of Colin Law, the leader of Waveney District Council, in May. Councillor Law was a long-standing public servant who made a big contribution to the community he represented, as was manifested in the example my hon. Friend gave of his commitment even into his ill health. He will be missed by those on all sides of the political divide.

Given the ambition and scale of change that universal credit introduces, there are bound to be issues that arise as the service is rolled out. In particular, there are clearly concerns over the challenges some claimants face when managing a monthly budget for the first time, but let me assure Members that the Department has already been making inroads on this issue and there are many good reasons to feel positive about the future.

I take the opportunity to highlight how universal credit helps people looking for work in my hon. Friend’s constituency. There is a high level of seasonal work in the Lowestoft area. Before the introduction of universal credit, many people could have been reluctant to take up short-term or irregular work because of the old 16-hour limit with some of the legacy benefits. Since the launch of universal credit, jobcentre staff have contacted the large local employers, leisure parks and holiday resorts, to help generate job opportunities for claimants. We have run popular job fairs, attended by more than 1,700 claimants, promoting these openings. I know that my hon. Friend has had a lot of personal involvement in running job fairs, and other employability and opportunity events.

Universal credit claimants can now take up work, which may initially be just at the weekend and in school holidays, that builds up to extra hours as the season progresses. Claimants have the flexibility to take on extra hours without worrying about having to stop and then restart multiple benefit claims. Under universal credit, employers in Lowestoft and Great Yarmouth are able to offer extra work at short notice to a workforce that can make the most of those opportunities without the additional administrative burden.

Lowestoft and Great Yarmouth jobcentres were among the first to roll out the universal credit service to all claimant types, which has given us invaluable insight into what works and what we can do better. From my visits and from the correspondence that I have had with my hon. Friend and with the local authorities in his constituency it became clear that we needed to be better at gathering information and improving the speed and accuracy of payments to claimants. It was also clear that we needed to do a better job of speaking with landlords in both the private and social sector about the changes that universal credit would bring.

I am pleased to report that this valuable feedback has helped us introduce real improvements to the way we do things: we have removed delays and data verification that were causing some of the payments to go out late; and we have introduced a “Housing Confident” scheme to ensure that universal credit work coaches talk to claimants about housing and that work coaches are alert to the support that claimants might need. It is about properly understanding the claimant’s needs, and this can extend to providing budgeting advice or, when needed, arranging for direct payments to landlords.

We have made improvements to the service that we offer private and social landlords. Thanks to feedback from landlords, we have made improvements to the way we set up direct payments of rent to landlords with an easier to use application form. That means that we are getting those payments out to landlords more quickly. We are also exploring how we can make it easier for landlords to find out the status of the application for a direct payment and we will be making an announcement about that soon.

Universal credit also brings big improvements for private landlords whose tenants get into arrears. Under the old system, landlords would need to apply for recovery of arrears via a third party deduction, often at a low repayment rate, which could mean a long wait before landlords got back their rent. In universal credit, it is easier and quicker to set up an arrears payment for landlords. In addition, under universal credit, repayment for private landlords can be at a higher rate—up to 20% where claimants can afford it. That means that claimants can get on top of their finances and landlords can get the money they are owed more quickly.

These actions are having results. Our internal figures show that far more claimants are getting the right money on time. We aim to make this information public in the near future. I know that my hon. Friend has acknowledged these improvements in performance.