Universal Credit and Welfare Reform

Yvonne Fovargue Excerpts

Tuesday 11th September 2012 Commons Chamber

[Yvonne Fovargue (Makerfield) (Lab)]

Universal credit has been called a “welfare revolution”—the most ambitious, fundamental and radical change to the welfare system since it began. As with any language when revolution is mentioned, people are worried and concerned; and when they are worried and concerned about their future income and their benefits and want advice, where do they go? To the advice agencies—to the local citizens advice bureaux and the law centres, which have helped people in troubled times for more than 70 years.

What these worried and concerned individuals might not realise, however, is that the introduction of universal credit is happening at precisely the same time as some of the most destabilising and threatening cuts to our advice services are taking place. Welfare benefit cases are no longer eligible for legal aid, leading to a loss of specialist advisers. Many specialist advisers, who have often worked in the system for a long time, train the generalist advisers who often give their services for nothing, and they support them by explaining the intricacies of any new system. The specialist support unit has already gone and all its funding has been cut, so there is no one at the end of the phone to talk through the complexities and anomalies or to provide the training. Many centres are having to close their services due to the toxic combination of council cuts, legal aid cuts and other funding cuts.

I worked in a citizens advice bureau during the change from supplementary benefit, so I know that people come early and want their advice early. Advice agencies are already receiving a spike in inquiries. Even a modest change means that the number of inquiries goes up exponentially. Will the Minister set out the Government’s strategy on the role of independent advice provision? I also gently remind him that a strategy without the money behind it remains simply a vain hope. It is no use relying on Jobcentre Plus and the Benefits Agency or presuming that people will go there for advice, as those agencies are seen as an arm of government. People rely on their neighbourhood advice centres and people want an independent assessment of their benefit claim. The emphasis on claiming online will also increase the number of people requiring advice because only 17% of people deal with their claims online, and 31% of the poorest in society never use the internet at all.

I can remember that when the social fund was brought in, people had to go to Jobcentre Plus, which had a free phone for claims. Where in fact did they go, however? They went to citizens advice bureaux and the advice agencies, even though the free phone was available, because people go to the agencies that they trust.

I am concerned about the change in payments, too. What about the 20% of people who do not have access to a bank account? I remind Government Members that they voted down our amendment to the Financial Services Bill, which sought to make the banks provide socially responsible products for those who had been discriminated against. How will they be helped to open an account and manage their money, particularly when housing benefit will be paid to the claimant? Have the need for and availability of budgeting advice been considered, particularly during the switch to monthly payments?

The harsher sanctions regime is another concern, as the DWP’s own research has shown that vulnerable claimants have been more likely to be subject to sanctions. That has certainly been borne out by my own constituency experience. A severely autistic claimant was sanctioned for not attending to sign on, when his appointment had been changed three times in three weeks and the last appointment letter was received after the date of the appointment.

I have a number of concerns about the social and human cost—and also the cost to the public purse—of failing to ensure that there is timely access to expert advice. Introducing a revolutionary new system at precisely the time when the advice services report that they are facing a “perfect storm” of funding cuts is unfair to claimants, will not help those who administer the system, and will affect the most vulnerable. I urge the Government to consider the role of advice provision in the pathfinder areas, and to assess the need for and funding of that advice in the roll-out.