Universal Credit Information Notes
IntroductionProposals for the Universal Credit scheme (UC) first emerged in September 2009 from the Centre for Social Justice; Iain Duncan Smith, the current Secretary of State for Work and Pensions who is tasked with setting up the project in the current government was the then chairman of the Centre.
The supposed purpose of UC is to simplify and consolidate the existing benefits system, and so reduce welfare dependency by making work more appealing to claimants, encouraging financial rectitude and reducing the current welfare budget. It will also make wage savings in the public sector as it is intended to be part of the "Digital by Default" programme. The October 2013 edition of "Labour Research" states that the government is claiming that while UC will cost £2.2 billion in in development and delivery costs, it will save an estimated £38 billion by reducing administrative, fraud and error costs by 2023. This figure includes an estimated annual saving of £100 million by transferring claimants onto the new system.
Last July DWP whistleblowers began to tweet claims that "at least £300 million had been
written off from the UC budget due to continued IT failures; when this information reached the national media the government initially stated that £34 million would be written off, but as of the 11th of September The Guardian was quoting the DWP's finance director as stating that "up to £161 million would be written off, with the governmenfs oversight body, the Major Projects Authority claiming "at leasf £140 million was lost."
Despite this, and the resulting delays in rolling out the project - which was initially due to
begin nationally this October - the project is set to continue. As the flagship policy of the
Welfare Reform Act it is considered too big to fail. On 8th October 2013 Esther McVey said
an estimated 1 million households will be claiming UC by the time it is fully implemented in
2017. This will include anyone who claims any of the six benefits that will be rationalised
under the system, including those in low-paid or part-time employment who top-up their
earnings with benefits: by 2017 this group will also be subject to the requirements of the
DWP claimant regime, including the possibility of sanctions - the removal of -benefits - for a period of up to three years.
The comptexities of introducing the UC system are mirrored by the difficulties in producing coherent and specific criticisms of the policy. As difficulties with the proposed system emerge they are adjusted by "on the fly" decisions: for example, when the "pathflnder" tests for UC had been introduced in Ashton-under-Lyne it was noted that there was a massive increase in rent arrears, so now there is a two month "switchback" for the Housing Benefit element of the policy whereby that poftion of the UC payment can be paid directly'to the landlord. Similarly there are aspects of UC that have received little media focus, such as the role of UC in providing an individual "electronic ID card" as part of the Digital by Default proposals.
For this reason the factsheet cannot cover all the ramifications of the policy, or the
mechanisms by which it will mesh with other parts of the austerity-induced [or austerity-excused] welfare reforms. While some of this will be covered in today's session, the factsheet is timited to a series of notable items, with accompanying web links where possible, and some handy websites to watch as the policy progresses into the public realm. These are:
Benefits and Payments: The six "working-age" benefits to be consolidated into a single
UC payment are:
- Jobseekers' Allowance;
- Employment and Support Allowance;
- Income Support;
- Child Tax Credit;
- Working Tax Credit and
- Housing Benefit.
* Copy here is scanned, proofread and link tested by Swheatie from printed handout.