Ipswich Unemployed Action.

Campaigning for Unemployed Rights.

Universal Credit: The Saga of Failure Continues.

with 24 comments

Old Norse Legends: Shorter, More Efficient, and Less Fraught than the Saga of Universal Credit. 

At the Jobcentre we are told that Universal credit will make everything better, working part-time, re-claims, many difficulties will vanish when it gets set up.

People have been given entire lectures on the subject.

Yet.

Yet, this continues, as many of us saw on the telly this morning, or heard about from people we know.

The latest from a long, a very long saga – and not one many of us would care to listen to on a long frozen night.

Universal Credit veering off track, Resolution Foundation says

The BBC continues:

The government’s flagship benefit reform has “serious design flaws” and has “veered off track” because of cost-cutting, a think tank has warned.

The Resolution Foundation said Universal Credit could leave 2.5 million families worse off, some by more than £3,000 a year.

It comes as the government announces a further expansion of the scheme.

Welfare Secretary Stephen Crabb said the payment was “transforming welfare” and getting people into work faster.

Universal Credit, championed by Mr Crabb’s predecessor Iain Duncan Smith, aims to provide incentives for people to move off benefits and into work.

Universal Credit replaces six current benefits, including Jobseeker’s Allowance and Employment and Support Allowance with a single payment.

After delays hit the original timetable, it is being gradually rolled out across the country and is now available to new single jobseekers in every job centre across the UK.

The latest target for a full roll-out is 2021.

The Resolution Foundation, chaired by former Conservative minister David Willetts, said it had long supported Universal Credit, which it said would simplify welfare and boost work incentives.

However, it said recent changes, “which have been driven by the government’s desire to secure further savings in the welfare budget… have taken it too far from its original purpose”.

Unless design flaws are eradicated, it said, Universal Credit “risks being reduced to little more than a very complicated vehicle for cutting the benefits bill”.

The hard men of the Public Finance journal are equally forthright,

Richard Johnstone writes,

The government’s Universal Credit benefit reform scheme must be “reclaimed” from the Treasury in order to achieve its aim of making work pay, the Resolution Foundation has warned today.

The think-tank called on the new work and pensions secretary Stephen Crabb to make changes ahead of the full rollout of the benefit reform to ensure it incentivised both entry into the job market and progression in work.

Full implementation of UC, which combines six existing benefits into a single payment,has been delayed after a series of IT problems.

From today, all single jobseekers can now claim the benefit, with over 450,000 people having made a claim for the payment so far.

However, the government made a series of changes to the structure of UC in the last parliament, including reducing the amount of benefits that people can retain as their earnings rise.

Today’s Resolution Foundation report highlighted it had long supported the reform, but changes in the last parliament, driven by a desire from the Treasury to secure further savings in the welfare budget, meant the plan had “veered off track”.

The Independent Web Site highlights what concerns us most:

Their report found that while the new system does fulfil its goal of increasing incentives to work for around two million families, another 2.5 million working households could be worse of by an average of £41 a week. Recent cuts to work allowances – the amount of money benefit claimants are allowed to earn before their welfare payments are withdrawn – have deepened the problem, the Resolution Foundation said.

Disincentives to work under the new system are particularly strong for single parents, and the second earner in a household.

This is what the Resolution Foundation itself says:  Universal Challenge – making a success of Universal Credit.

Even when considered alongside policies designed to boost incomes, including the introduction of the National Living Wage and income tax cuts, relative to the current system without those measures in place, the latest version of UC implies:

  • 3 million working families entitled to support in the tax credit system will no longer be entitled to any in-work support, leaving them £42 a week worse off on average;
  • A further 1.2 million are set to receive UC, but be an average of £41 a week worse off;
  • 1.7 million still in receipt of UC will be better off by an average of £38 a week, in part due to the more generous treatment of housing costs; and
  • Only around 200,000 families – a mix of those without children and couple parents – who are no are longer entitled to UC at all will be overall better off following cuts to in-work support and boosts to income from the National Living Wage and income tax cuts.

This is a key point:

As currently designed, UC piles extra burdens on recipients, these could be eased. Making people’s lives more difficult may make them resistant to the change UC brings. Requiring recipients to provide complex information so the system can calculate entitlements risks creating errors and mistakes that could cause implementation to stumble.

Following his predecessor’s policy of stout denial – of everything, facts to start with – the new Secretary of State for Work and Pensions, Stephen Crabb, has responded.

Mr Crabb said universal credit was working well and that the Government’s focus was on expanding it to all benefit claimants.

“Universal Credit is transforming welfare and is central to our vision for our society where people of all backgrounds can earn a decent wage and provide for their families, with claimants moving into work faster and earning more than under the old system,” he said.

 

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Written by Andrew Coates

May 3, 2016 at 3:15 pm

24 Responses

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  1. “But the new risk with Universal Credit is not so much the weak incentives to earn more – that’s long been a feature of the benefits system – but the risk that people choose to work less”.

    To counter this feature of UC, claimants will be pressured to seek work with more hours. Unfortunately, there are not enough such jobs with more hours in existence!

    The TUC did a report on part-time work (in 2014). Quotes:

    “…despite recent economic growth the number of part-time employees who say they want full-time hours is still twice what it was before the recession at 1.3 million people”

    “…Just one in every forty of the net jobs added to the economy between 2008 and 2014 has been a full-time employee job.”

    https://www.tuc.org.uk/economic-issues/labour-market-and-economic-reports/only-one-every-forty-net-jobs-recession-full-time

    And I haven’t even mentioned how Universal Credit claimants on zero-hours contracts are going to get on!!!

    And that’s only SOME of the pitfalls of UC!!!!!!

    Tobanem

    May 3, 2016 at 6:08 pm

  2. 2021?

    Shoudn’t that read 22,021 at the current rate of claimant take up?

    That is of course if the system does not get ruled illegal in its practice and operation in the following areas: Family, zero-hours, self-employed, housing benefits, monthly payment, non-single claimants and last but not least Sanctions.

    In my crystal ball I foresee lots and lots of legal cases….

    Gazza

    May 3, 2016 at 7:32 pm

    • What legal cases ? Universal Credit is fully legal, and so are all its conditions if you happen to claim benefits.
      That is the worst part of all this.

      Jeff Smith

      May 3, 2016 at 10:13 pm

      • “What legal cases ? Universal Credit is fully legal, and so are all its conditions if you happen to claim benefits”.

        I wouldn’t count on it, how many court cases have the DWP lost recently. The Jobseeker’s Alloeance Regulations 2011 were legal until Cait Reilly challenged them.

        KJ

        May 4, 2016 at 1:04 am

      • There is one area where this will clearly fail – I am unwilling to expand as I pointed it out to someone else [others agreed] and they are looking into. I see no need to point out to DWP when they have put their ‘Johnson’ into a bear trap….

        Gazza

        May 4, 2016 at 11:28 am

      • Andrew Coates

        May 4, 2016 at 12:19 pm

  3. What bothers me is the use by both government and even this think tank of the phrase incentivize as it still implies people on welfare even when working don’t really want to work.

    UC is without reservation a pay grade system whereby if you work but don’t claim benefits that you will be better off than someone working who’s currently state dependent dew to poor wages and high costs and someone not working even worse off still. It was to put no finer word on it, the Tories whole plan of how they were ever going to achieve how to make work pay in a world of job insecurity, shorter contracts, low productivity and yes still stagnant wage rises.

    Last year a person working 37 hours a week on nat min earned around 12’891 gross yet the very same person by 2020 will be grossing for the same hours 17’316. Now anyone earning this amount is likely to not qualify for state funds or if you like currently wouldn’t be eligible. Now interestingly what this implies is not only will government no longer be issuing credits but will infact be drawing around twice as much tax revenue. So rather than say taxing company profits more for example, government has instead gone around the houses to get it by way of forcing employers to pay a higher rate for the lower end employees.

    I can only speculate at this point but i think once employers realize cutting down on lower wage staff effects productivity that they will turn to dampening down the next tiers wages while expecting the same functions. Lets face it, no 30’000 plus a year employee is going to stay with a company that expects them to clean the office,mop the kitchen before work meaning employers will have to except low wage employees are fundamentally important to today’s production. Like i said i can only take an educated guess at this point considering the variables but if one things for sure, its going to be quite interesting to see how employers cope while trying to maintain profit margins.

    doug

    May 4, 2016 at 1:17 pm

    • doug

      a very very good point – one I agree with.

      Further, taking GidIdiot at his word – he will get rid of the social net – I would put the following out there for people to think on.

      If as it appears likely that there is going to be tax squeeze on the Poor, I would say it will inevitable start to go up the chain of wages [I would go as far as to ask how long before the lower middle-class start to see their wages being squeezed downwards? I suspect the UC changes are going to have a effect sooner rather than later].

      This will cause pressure on the amount of taxes collected at some point – local/national.

      My guess at that point someone will come up with the brilliant idea of lowering business taxes in order to expand Good Quality Paid “Work” and encourage businesses to increase wages.

      I am sure all can see that last happening… Not. What happens at that point ? I have no Idea [I do privately, but they’re nightmares…]

      Gazza

      May 4, 2016 at 2:43 pm

  4. There is also this which these changes will compound: Record numbers of people in council tax arrears, say charities

    “Since 2013, when council tax benefit was effectively abolished as a centralised benefit, most English councils have introduced minimum payments for people who were previously exempt. On average, these families are required to pay £171 in council tax per year.

    Hundreds of thousands of people have ended up in court, forced to pay £150 in fees and administrative costs, causing the debt to spiral. Council tax is one of the few debts where failure to pay can result in imprisonment.

    Both StepChange and the Money Advice Trust said they are concerned that the increasing use of bailiffs, officially known as enforcement agents, is adding additional stress and anxiety to the most financially vulnerable.

    Mike O’Connor, chief executive of StepChange, said: “We know that often the default position of councils is to aggressively pursue arrears through the court process and by instructing bailiffs. It may come as a surprise to people that public bodies are more aggressive in pursuing debts than many private companies.”

    The charities are calling for a statutory “breathing space” scheme that guarantees those seeking debt advice a temporary freeze on interest and charges, and a halt to enforcement action in order to help a person recover their financial situation.”

    http://www.theguardian.com/money/2016/may/04/record-numbers-council-tax-arrears-charities-stepchange-money-advice-trust

    Andrew Coates

    May 4, 2016 at 3:58 pm

    • This council tax is yet another misdirection as what happens the year after and the year after that when a person still cant pay ?

      The public are shrewd so even if they didn’t learn or know the first time, their definitely make sure the bailiffs haven’t got anything to take the next time around. So with no goods to the value of, no way to increase the amount their already expected to pay via means testing, the debt will without reservation land squarely back onto the respective local council. If a person goes to jail over community tax,well you can add the cost of that to the debt as well.

      You know people have lost it when they add fees knowing full well you cant even pay back the very amount your in court for in the first place. This old out of date,out of touch approach wont work in a society that no longer allows governments to take ones beds, clothes and other essentials meaning government haven’t got any leverage unless they change the law.

      I can only suspect like central government that local councils are using these debts combined as assets so they can go borrow money off of the strength of their promise. Its bad enough central government has lost their grip on borrowing targets so one can only imagine how out of control it will be at a local level if its not already at that point.

      doug

      May 4, 2016 at 4:31 pm

  5. Twitter erupts as BBC struggle to keep Tory Election Fraud under wraps until after May elections.

    With over 30,000 tweets today, the hashtag #ToryElectionFraud has been trending on Twitter at number 3, and is currently (at the time of writing) the sixth most tweeted about issue.

    However, with such a big political news story currently unfurling, you would have expected the media to be all over it like a rash – just as they were with the Ken Livingstone anti-Semitism saga last week.

    Despite the furore that Channel 4’s investigation has created, there has been virtually no other coverage from the mainstream media of this deeply undemocratic scandal. And Twitter was rightly outraged at the lack of coverage.

    http://evolvepolitics.com/twitter-erupts-bbc-struggle-keep-tory-election-fraud-wraps-may-elections/

    enigma

    May 4, 2016 at 7:55 pm

  6. UK drawing blueprint for massive scale identity infrastructures.

    The UK is reaching significant milestones in its plan to build an identity infrastructure for a digital government that connects citizens and online services.

    While the U.S. is just revving up pilots for its government-inspired identity plan , the United Kingdom is gearing up for a massive identity rollout aimed at consumer access to public services via mobile and social identities.

    The U.K.’s Identity Assurance (IDA) program has the potential to be a marquee example worldwide for creating an identity infrastructure at scale that links consumers and services while incorporating next-generation user interfaces and credentials, and solving back-end challenges such as secure user-data exchange and trust models.

    IDA gives citizens the option of accessing mobile and Web-based services offered at Gov.uk using a non-government issued identity credential they already have with social media sites, banks, or other approved entities.

    http://www.zdnet.com/article/uk-drawing-blueprint-for-massive-scale-identity-infrastructures/

    enigma

    May 4, 2016 at 8:04 pm

  7. Meanwhile Google given access to healthcare data of up to 1.6 million patients.

    Artificial intelligence firm DeepMind provided with patient information as part of agreement with Royal Free NHS trust.

    https://www.theguardian.com/technology/2016/may/04/google-deepmind-access-healthcare-data-patients

    enigma

    May 4, 2016 at 8:21 pm

    • Women’s details have not been private since the set up of the NHS open Exeter database which was created to round us all up for our supposedly life saving accurate smear tests and so our doctors could earn huge bonuses if they forced us into presenting our organs for scraping. No one cared or worried about the loss of our privacy and when data protection came along.well they just added laws to make it “legal “. At no point were women actually asked if they wanted to be part of the programme, and they were given no clue as to how to opt out of what they never asked to be part of! Any information the smear taker got out of you eg date of last period, choice of contraception, practice of safe sex, smoking / alcohol consumption was also entered on a database for Any NHS worker to see. This programme has abused our legal and physical rights for decades! I really think it was the beginning of what we see now ‘

      katrehman

      May 5, 2016 at 5:20 am

  8. The housing crises – Ministers face battle to get Housing Bill into law. – pay to stay

    “Ministers showed yesterday that they still have no answers to concerns from housing experts, campaigners, MPs and peers.”

    He added: “If ministers want to fix the housing crisis then they need to listen to the opposition coming from all sides and rethink their damaging plans.”

    http://www.bbc.co.uk/news/uk-politics-36201892

    enigma

    May 4, 2016 at 9:59 pm

  9. Couldn’t get bedroom tax to work.

    http://www.publicsectorexecutive.com/Public-Sector-News/mandatory-fixed-term-tenancies-will-benefit-minority-groups–dclg

    After what can be regarded as a failed attempt to remove people from their roots by reducing housing funds on a room by room basis, government introduced into the Housing and Planning Bill a requirement for councils to grant fixed term tenancies of 2 to 5 years as well as a few special ones in 2012.

    Its quite rich how they claim it would assist the elderly in finding smaller accommodation, especially when you can be any age these days and still struggle to secure this elusive one room. Despite it being good government have observed one short coming, they still seem to ignore how people aren’t merely moving around the corner but in many a case,great distances to places where they have no family, no real personal support. With the younger single/couple parents having to tear their children from one school to the next with in some cases up to five times in a year.

    Its just one evil tactic after another these days.

    doug

    May 5, 2016 at 12:31 pm

  10. OT: Possible Police Investigation of Deaths [Scotland only at this time – why am I not surprised…]

    http://blacktrianglecampaign.org/2016/05/05/police-scotland-assessing-possible-investigation-into-ids-and-grayling/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+BlackTriangleCampaign+%28Black+Triangle+Campaign%29

    “Police Scotland assessing possible investigation into IDS and Grayling”

    By John Pring Disability News Service
    Thursday 5th May 2016

    Scottish police are assessing whether to launch a criminal investigation into the failure of two government ministers to address a coroner’s concerns about the safety of the “fitness for work” test, a failure which may have caused “countless deaths”. ”

    hhhmmmm, I wonder how this will play out – UN investigation, possible Police investigation?

    Crabb going full steam ahead with UC rubbish.

    How long before the list gets longer?

    Gazza

    May 5, 2016 at 12:32 pm

  11. OT: AVOID – Sector Based Work Academies

    h/t : unemploymentmovement

    http://unemploymentmovement.com/forum/job-centre/2538-sector-based-work-academies.html#19825

    I’ve just read some of the guidance EG http://www.whatdotheyknow.com/request/191520/re…idance%20England.pdf and this scheme is a minefield.

    That’s a shame because it could be potentially very useful to some claimants. AS it stands, there is a severe risk of claimants being stitched up.

    Here’s the problem:

    1. Participation is voluntary.
    2. As soon as JCP issue a referral, most elements of SBWA become mandatory

    There doesn’t appear to be any clear stage between 1 & 2. There ought to be a point where the WC explains it all including sanctions and invites the claimant to “sign here” to go on the scheme, if they want to.

    Unfortunately the best advice is to say No at first sight.

    Gazza

    May 5, 2016 at 3:12 pm

    • AVOID – Sector Based Work Academies
      Yep, it’s just another slave-fare schame. Councils who are not using slave-fare use it through a provider/parasite to get the ‘council work’ done anyway. I had a close call on that!

      Another Fine Recession

      May 6, 2016 at 10:57 pm


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