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Esther McVey Defends Universal Credit, Hell or High Water!

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The Right Honourable Esther McVey: My door is always open.

Yesterday in the House of Commons Esther McVey was on rare form.

Bertie Wooster once recommended that when confronted with a misdeed the best response was stout denial.

Readers of Hansard and no doubt those who watch the BBC Parliamentary Channel can see her Ladyship following his sage advice.

Universal Credit. 17 October 2018. Volume 647

 

Labour’s Margaret Greenwood ‘umbly but impertinently  began,

 

That an humble Address be presented to Her Majesty, That she will be graciously pleased to give directions that the following papers be laid before Parliament: any briefing papers or analysis provided to the Secretary of State for Work and Pensions since 8 January 2018 on the impact of the roll-out of universal credit on recipients’ and household income and on benefits debts.

Universal credit, the Government’s flagship social security programme, has been beset by flaws in its design and delivery. It is causing immense hardship for many people wherever it is rolled out. It is hard to believe now, but universal credit was designed to lift people out of poverty and smooth the transition into work to ensure that it always pays. The reality is that universal credit is a vehicle for cuts: cuts in support for families with a disabled child for whom the basic rate of support is half what it is in tax credits; cuts in support for disabled people in work, such as the disabled person who wrote to us saying that they are more than £300 a month worse off since switching from claiming working tax credits; and cuts in support for lone parents bringing up children who will get more than £20 a week less on average, with many losing far more.

..

Let me make some progress.

Overall, 3.2 million families with children could lose around £50 a week. People are worried, but there is no clarity from Government. The Prime Minister told this House that no one would be worse off, yet The Times reported that the Secretary of State told Cabinet colleagues that households could lose up to £200 a month. Being forced to manage on a low income that is then cut still further means tough choices for the families affected. The DWP’s own survey of claimants published in June showed that nearly half of new universal credit claimants are falling behind with bills. Even six months later, four in 10 are still struggling to cope financially.

And so it went. And went – it’s pretty long so I skip.

Her Royal Highness (for it was she, Esther) replied,

Members want to speak in this debate. I know too, Mr Speaker, that you are always anxious to hear Back Benchers speak, as am I, so I will keep my remarks as brief as possible.

I have been forthright with colleagues across the House—and in my speech at Reform earlier this year—about universal credit’s strong merits and the areas that we need to improve. In fact, in my Reform speech, I said that I would improve universal support, and I delivered on that this month. Since becoming Secretary of State, I have changed the system to provide extra support for those with severe disabilities, vulnerable young 18 to 21-year-olds and kinship carers. I am also working with colleagues to identify areas where we can make more improvements.

This is also long so I will just cite a few of her gracious words,

We have taken a mature approach to rolling out universal credit. We have said that we will test, learn, adapt and change as we go forward. That has resulted in a series of improvements, and I will read some of those out. We are providing extra universal support with Citizens Advice, an independent and trusted partner. We have brought in the landlord portal. We have brought in alternative payment arrangements, 100% advances and housing running costs. We have removed waiting days and are providing extra support for kinship carers and those receiving the severe disability premium.

My door is always open. We will make sure we get this benefit right, and Government Back Benchers, who have genuine concerns, want to get it right.

Here is a more readable report:

Tories block Labour bid to reveal government assessment of Universal Credit impact

Politics Home.

After a heated four-hour debate, they voted by 299 to 279 against the release of the documents, which Labour hoped would reveal the detrimental effect of the welfare shake-up which rolls six existing benefits into a single payment.

Labour used an arcane parliamentary procedure known as a humble address – previously used to force the release of the Government’s Brexit impact assessment – to try to compel the publication of analysis of the shake-up on people’s incomes.

Work and Pensions Secretary Esther McVey last week admitted that some people “could be worse off” under the reform, despite Theresa May’s claim that would not be the case.

Ms McVey’s opposite number, Margaret Greenwood, today called for the Government to publish all reports and analysis it has carried out into the effects of Universal Credit since Ms McVey took office in January.

“The social security system should be there for any of us should we need it, yet the Government’s flagship programme has brought real hardship,” she said.

“How did it come to this in the fifth largest economy in the world that we have people facing hunger and destitution?

“It cannot be right, the Government must wake up, it must open its eyes to what’s happening and that is why we are calling on the Government to stop the roll-out of Universal Credit.”

Ms McVey yesterday confirmed that the “migration” of existing welfare claimants to Universal Credit would be delayed until later in 2019.

Meanwhile the BBC reported that the deadline for full implementation could be pushed back by another nine months to December 2023.

Ms McVey today prompted angry shouts from Labour MPs when she opened her comments by saying: “It’s good to be here again for my department to update the House on Universal Credit for the third time this week.”

She later added: “We will continue with Universal Credit. We will continue to roll it out. We will engage with colleagues across the House… my door is always open, but we will make sure we get this benefit right. You know why? Because of the genuine concerns of the people on our backbenches who want to get it right.”

Then there is this:

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Written by Andrew Coates

October 18, 2018 at 10:43 am

As Revolt Against Universal Credit Grows Esther McVey Tries to Ban Charity Critics.

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Esther McVey: Needs Protection for her “standing and reputation”.

The world has turned against Universal Credit.

You know that when Gordon Brown attacked it, saying, “Halt universal credit or face summer of discontent” and and was followed by fomrer Tory PM, John Major rubbishing the hare-brained scheme.

And the Tory papers jumping on the bandwagon.

Not to mention yer actual present day Tory MPs:

The House of Commons,

Tory backbenchers have urged the government to slow down the roll out of universal credit. The new all-in-one benefit, which replaces six existing benefits, is being introduced gradually, but in areas where it has been implemented there have been multiple complaints about people being impoverished by having to wait for money. In an interview on the World at One, Nigel Mills said:

If you have any doubts that we can make it work for these volumes, let’s slow down. Let’s not get this wrong for the sake of sticking to a timetable.

Another Tory backbencher, Johnny Mercer, said UC was “politically undeliverable” in his Devon constituency, and called for a planned increase in income tax thresholds to be scrapped in order to make the benefit more generous. The MPs spoke out as Esther McVey, the work and pensions secretary, said some claimants would be worse off under UC, despite Downing Street saying otherwise. (See 4.59pm and 5.04pm.)

Guardian.

One of the things that stuck in the craw was McVey’s claim that if people lost money under Universal Credit they could always earn the shortfall by working more.

But, there you go….

Then there was this yesterday (Independent):

Some people “could be worse off” when they switch to universal creditEsther McVey has admitted – directly contradicting Theresa May’s pledge to “protect” them.

The work and pensions secretary said “tough decisions’ had been made which would hit claimants – following reports that she told the cabinet their loss could reach £2,400 a year.

The admission comes just one day after the prime minister told the Commons that current claimants “will not see any reduction”, promising: “They will be protected.”

Thin-skinned Esther is not one to take this lightly.

The Independent reports today:

Charities working with Universal Credit claimants required to ‘sign contracts to protect Esther McVey’s reputation’

Charities and companies working with Universal Credit (UC) claimants have reportedly been required to sign clauses pledging not to damage the reputation of Work and Pensions Secretary Esther McVey.

At least 22 organisations – covering contracts worth £1.8 billion – have been required to sign the clauses as part of their involvement with programmes getting the unemployed into work, The Times reported.

Officials at the Department for Work and Pensions (DWP) denied they were “gagging clauses” intended to prevent criticism of ministers or their policies, insisting they were just “standard procedure”.

However a spokesman confirmed that the contracts did include references to ensure both parties “understand how to interact with each other and protect their best interests”.

Eagle-eyed observers will have noticed in recent weeks a string of stories about charities, such as CAB,  being contracted to do the DWP’s work….

As in, “Citizens Advice to provide support to Universal Credit claimants.”

The Department for Work and Pensions (DWP) will fund Citizens Advice to provide Universal Support from April 2019, the government has announced.

The support scheme will help claimants through every step of making a Universal Credit claim. It will offer people the comprehensive and practical support they need to get their first payment on time and be ready to manage it when it arrives.

Universal Support provides advice and assistance to help claimants manage their Universal Credit claim, with a focus on budgeting advice and digital support. Since 2017, Universal Support has been delivered by individual local authorities, funded by grants from DWP.

From April 2019 Citizens Advice (England and Wales) and Citizens Advice Scotland will take on the responsibility for delivering a strengthened Universal Support service, a move which will ensure a consistent and streamlined service for claimants across the country.

Secretary of State for Work and Pensions Esther McVey said:

Since becoming Secretary of State in January, I have listened to the concerns of claimants, constituents, charities, welfare organisations and colleagues and I have made significant changes to the system, like extra support for those with mental health conditions, more support for vulnerable young people and more support for families who look after other family members’ children.

I have always said we will steer a new direction and work with partners to deliver vital services, and get Universal Credit right. The state cannot, and should not work in isolation and must reach out to work with independent, trusted organisations to get the best support to vulnerable people.

This brand new partnership with Citizens Advice will ensure everyone, and in particular the most vulnerable claimants, get the best possible support with their claim that is consistently administered throughout the country.

Citizens Advice are an independent and trusted organisation, who will support people as we continue the successful rollout of Universal Credit.

But….

The signatories to contracts must undertake to “pay the utmost regard to the standing and reputation” of the Work and Pensions Secretary, the newspaper reported, adding that they must “not do anything which may attract adverse publicity” to her, damage her reputation, or harm the public’s confidence in her.

A DWP spokesperson said: “It’s completely untrue to suggest that organisations are banned from criticising Universal Credit. As with all arrangements like this, they include a reference which enables both parties to understand how to interact with each other and protect their best interests.

Even the Murdoch press is turning:

As the Mirror says,

The Times said at least 22 organisations signed the pledge as part of contracts worth £1.8 billion to run projects getting the unemployed into work

Written by Andrew Coates

October 12, 2018 at 11:04 am

Poverty Crisis Worsened by Universal Credit.

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Image result for poverty Social Metrics Commission

” total number of people living in poverty is 14.2 million.”

Poverty, anybody could see with their own eyes, is growing.

I was struck, visiting my old homeland, Haringey, by this recently.

It was not so much that seeing the homeless people on the streets was a surprise – we have plenty in Ipswich. Though I must admit that, coming out of Wood Green Tube station, the sight of a geezer with a sleeping bag sprawled out in front of the ‘Spoons on Spouters’ Corner was unexpected.

It was that walking from there to Turnpike Lane most people looked, well, not well off.

Same pound shops, charity shops, though a Mall looked a bit more prosperous than ours.

This is the real London, not Made In Chelsea.

Bounds Green, where I grew up, is (wrote the Guardian in 2013 and it’s still true), is “ordinary north London, like wot even Muswell Hill used to be: an endangered species these days.”, was another destination on this tour.

On a  round circuit from the Tube to my old gaff (a short 15 minutes)  I came across at least 10 off-licences and newsagents/food stores selling cheap booze.

Encouraging to see that people still appreciate white cider and 9% lager, no “shops selling single-estate, organic, truffle-dusted flat whites”.

But then………..

This report, then, does not come out of the blue.

More than two million Brits at risk of falling into poverty, report warns

The UK Government has been urged to take action at the Budget in order to tackle Britain’s growing poverty crisis, in response to the publication of a new report which shows that 2.5million people are at risk of falling into poverty.

The Social Metrics Commission has published a new framework for measuring poverty in the UK, which takes into account a wider range of interplaying factors which cause people to fall into poverty – including material resources, the cost of disability, and the cost of childcare.

Sam Royston, director of policy and research at The Children’s Society, said: “While we would welcome these changes to how poverty is measured being included in official statistics, concrete action is needed to tackle the shameful scale of poverty among our children, with all the damage it can do to their wellbeing, education and life chances.”

The Commission found that more than one in ten (12.1%) of the total UK population (7.7million people) live in persistent poverty. While a further 2.5million people in the UK are less than 10% above the poverty line – meaning relatively small changes in their circumstances could see them fall below it.

Philippa Stroud, the commission’s chair, said: “We want to put poverty at the heart of government policymaking and ensure that the decisions that are made are genuinely made with the long term interests of those in poverty in mind.”

The UK Government abolished child poverty targets under the Welfare Reform and Work Act 2016 – a moved condemned by the SNP who have reintroduced them in Scotland and have called for their reintroduction across the UK.

These are the conclusions of the above report:

The SMC report, available here,  reveals numerous key findings and challenges. The total number of people living in poverty is 14.2 million with the composition of poverty moving towards a better identification of children (4.5 million) and working-age adults (8.4 million). The good news is the shift away from pensioner poverty with far fewer pensioners living in poverty following a significant reduction of poverty amongst pension age couples, over the last 15 years.

The report reveals that people with a disability are much more likely to be living in poverty than previously thought, with around half of the 14.2 million people in poverty living in families with a disabled person.

The report also reveals the persistence and depth of UK poverty. More than one in ten (12.1%) of the total UK population are in poverty now and have been in poverty for at least two of the previous three years. A further 2.5 million people live less than 10% above the poverty line and are close to falling below it with relatively small changes to their circumstances; and around 2.7 million people live less than 10% below it.

 SMC KEY FINDINGS

  1. 2 million people in the UK population live in poverty: 8.4 million working-age adults; 4.5 million children; and 1.4 million pension age adults.
  2. Over half of those in poverty (58.2%) also live in persistent poverty. This means that more than one in ten (7.7 million) of the total UK population are in poverty now and have been in poverty for at least two of the previous three years. Persistent poverty is highest in families more than 10% below the poverty line, in workless families and families where someone is disabled.
  3. People with a disability are much more likely to be living in poverty. Nearly half of the 14.2 million people in poverty live in families with a disabled person (6.9 million people equal to 48.3% of those in poverty). The SMC metric recognises the inescapable costs of disability, accounting for them alongside the value of disability benefits, to reflect the lived experience of living with a disability.
  4. Far fewer pensioners are living in poverty than previously thought, with a significant fall in pensioner poverty over the last 15 years. Poverty rates amongst pension-age adults have nearly halved since 2001, and have fallen to one in ten, a drop from 17% of the total population in poverty in 2001 to 11% in 2017. There are, however some pensioner groups still experiencing high levels of poverty. For example, the poverty rate for pensioners who do not own their own home is 34.2%.

You can only note that all this is about to get a lot lot worse:

The Universal Credit Rollout Will Cause Liverpool Untold Harm – The Government Must Pause And Rethink. 

Joe Anderson Mayor of Liverpool

Huffington Post.

In a city described by the Joseph Rowntree Trust as having the second worst affected in the country when it comes to ‘destitution,’ Liverpool needs Universal Credit like a hole in the head.

Nevertheless, from this week, the remaining parts of my city not already covered by UC will start being migrated across to the new benefit.

The dread I feel is because we know what happens next.

Already, we can see a spike in hardship and a rise in council tax arrears from those who have already transitioned to UC. Not to mention the snaking queues at foodbanks and the families struggling with things like school uniform costs.

Around 55,000 Liverpool households will eventually see their claim move to Universal Credit. So far, we estimate that up to 2,800 people in Liverpool are affected by changes in work allowances in Universal Credit, resulting in a loss of income to families of between £40 and £200 each month.

The Council’s various discretionary schemes, set up to protect people in hardship, made 13,700 awards last year at a cost of just under £2.7million. 71% of all Discretionary Housing Payments made in Liverpool are to help people who have been hit by the ‘under occupation penalty’ – or as we know it, the bedroom tax.

It’s so frustrating because as a council, we have one of the best records in the country when it comes to maintaining discretionary benefits for the poorest and most vulnerable in our city. We are left picking up the pieces from failed central government changes.

Despite losing two-thirds of our government funding since 2010 (£444million), we have stretched our finances as far as we can in order to preserve basic human dignity, but also because it makes sense to address problems upstream before they swim downstream and cost even more to fix.

This is often down to the scandalous time lag between applying for Universal Credit and receiving a first payment. This is often as long as twelve weeks, with the National Audit Office recently reporting that four in ten applicants had experienced financial difficulties while transitioning across to UC, while one in five were not paid on time.

So my message to ministers is simple: pause this roll-out and listen to those of us on the frontline. It’s possible to reform Universal Credit to keep the original intention of simplifying the benefits system without deliberately causing misery for tens of thousands of people in my city and millions more across the country.

Drop the ideology for a start. There is no good reason to make desperate people wait for their benefits, simply because eight years ago Iain Duncan-Smith wanted to teach them budgeting skills. Pay up straightaway and take that terrible burden off the backs of some of the poorest people in our society.

Unnecessary delay simply throws vulnerably families into the clutches of payday lenders and loan sharks. This is a simple concession that Esther McVey could make that would transform the lives of millions of people for the better and show that the Department for Work and Pensions is listening to evidence about the ill-effects of UC.

I would also urge her to work with councils rather than ignoring us. Along with the voluntary sector, we are working to pick up the pieces of botched welfare changes. But give us the tools to do it. Provide ring-fenced funding so councils can create a local welfare scheme to address acute hardship.

But it’s also about practical steps, like understanding the system simply isn’t flexible enough for people on zero hours contracts and have no guarantees about their work situation from week to week. Also, the DWP could dramatically reduce the waiting time for connection to the DWP advice and information lines.

Before people in Liverpool are exposed to these poorly-conceived and badly implemented changes, I am asking Esther McVey to pause and #RethinkUC.

 

Written by Andrew Coates

September 18, 2018 at 9:23 am

Labour Needs Policies to Replace Universal Credit to Rebuild the Welfare State.

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Image result for mark Serwotka speech

“We need to see a Corbyn government commit to overturn decades of attacks on and ridicule of benefits claimants and return to the founding principles of a properly-resourced welfare state”  PCS General Secretary Mark Serwotka.

A number of our commentators have been, rightly, dissatisfied with the lack of a strong Labour voice, above all, Labour Party Policy, on welfare issues.

These range from silence on the benefit freeze (which needs to be ended), to an alternative to the Universal Credit car-crash.

There remains talk about a pause to implementing Universal Credit (a 2017 petition – a bit late now).

The acting Shadow Secretary for Work and Pensions, Margaret Greenwood, seems to have said little since just before the long summer holidays, apart from continuing to criticise government policies (“Delays in payments of Universal Credit are sending victims back to abusive partners – Margaret Greenwood.” August the 1st).

Basic Income aside what are Labour policies, from funding to changing the whole miserable punitive structure of the benefit system?

What are Labour’s plans to fix Universal Credit?

No straightforward ideas seem available.

Although there is this:  John McDonnell attacks Tory disability cuts and vows to address suicides linked to welfare reforms.  Kitty S Jones

This suggested Contemporary Motion for the coming Labour Conference  (from the Clarion site) suggests some starting points:

SUPPORTING THOSE IN NEED: REBUILD THE WELFARE STATE

We note
• the 8 August ONS figures showing that improvement in life expectancy has virtually stopped.
• the 6 August Child Poverty Action Group report on how Universal Credit’s flaws are leading to low-income families arbitrarily losing as much as £258 a month!
• the July Resolution Foundation figures showing the poorest third’s incomes fell last year, even before inflation.

The situation is shameful. We must reverse the drive, accelerating since 2010, to make welfare less and less about supporting those in need and more and more stingy, punitive and coercive.

Neither Universal Credit nor the existing framework (JSA, ESA, etc) are good. We must redesign benefits in close consultation with recipients, workers and their organisations.

This must be part of a wider anti-poverty program, with a goal that by the end of our first term foodbanks disappear.

We commit to
1. Ending the benefit freeze; uprating with inflation or earnings, whichever is higher.
2. Reversing all cuts/reductions; increasing benefits to afford a comfortable, not minimum, income.
3. Entitlement conditions that are straightforward, inclusive and available to all, including migrants (scrap ‘No recourse to public funds’).
4. Paying benefits for all children and dependents.
5. Abolishing all sanctions.
6. Scrapping Work Capability and similar assessments.
7. Relevant health issues being addressed using medical professionals with appropriate knowledge of individuals’ conditions and impairments.
8. Delivery by paid public servants via networks accessible to everyone, including provision of face-to-face support for all who need it. Reversing DWP cuts and privatisation.

Whether this gets onto the agenda or not there are people calling for some serious policies.

‘Labour must return to the founding principles of the welfare state’, says union boss

Welfare Weekly reports (12th of September),

Labour must commit to over-turning years of cuts to social security benefits and end the stigmatisation of benefit claimants seen under Tony Blair and the current Tory Government, PCS General Secretary Mark Serwotka said at a TUC Congress fringe meeting on Tuesday.

Mark told the meeting held in Manchester that the current benefits system in “broken” and “causing much difficulty for people claiming benefits”, whilst adding the Tory Government is seeking to cause divisions between “people in work, those who work in DWP and those in receipt of benefits”.

He added that a future Corbyn-led Labour Government must “return to the founding principles of the welfare state that it is for all people and provide dignity for all people at all stages of their lives”.

Mark also said the rollout of Universal Credit needs to he halted because the new system is in chaos and there aren’t enough DWP staff to deliver it.

“We need to stop a system that is causing so much difficulty for people claiming benefits,” he said. “The benefits system is broken, under-resourced, inadequate and understaffed.”

He added: “The starting point of the debate on welfare needs to be the founding principles of the welfare state that it is for all people and provide dignity for all people at all stages of their lives.

Mark continued: “We had a system that wasn’t perfect but gave people money when they needed it. Almost exclusively people claim benefits because of a crisis out of their control.£

Mark said that ‘New Labour’ took stigmatisation of welfare claimants to new levels and there was a lot of work to do to put that right. He said we need to see some radical welfare polices from a future Labour government that gives everyone a welfare system that we can all be proud of.

£34bn has been cut from the welfare budget since 2012, with a further £12bn of cuts planned before 2022.

“More money is needed as we have some of the lowest rates of benefits in Western Europe,” said Mark.

PCS DWP Group assistant secretary Steve Swainton said: “Universal Credit has been understaffed and underfunded at every stage. Our members are doing everything they can do to mitigate the worst of the system but we need a radical redesign.”

Colin Hampton, co-ordinator of the Derbyshire Unemployed Workers’ Centres (DUWC), told the meeting: “If we can spend money on bombing people we can spend money on putting people into work.

“The benefits issue is fundamental to the trade union movement. What happens to people on benefits affects what happens to people in the workplace and wider society.”

“We need to restore dignity and respect to people in and out of work”, he added.

The PCS site carries further details, including this:

Written by Andrew Coates

September 12, 2018 at 10:46 am

Crunch Time for Failing Universal Credit Scheme.

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Image result for universal credit better off in work

Please Verify £3 Billion Extra Funding.

Theresa May has been told that she must inject nearly £3 billion into controversial benefit reforms as the policy reaches its most delicate stage in parliament.

MPs will be asked this autumn to approve the extension of universal credit payments to 2.1 million less well-off families who at present claim income-linked benefits. These include about one million families in which parents work in low-paid jobs. This group of people who are “just about managing” have previously been identified by the prime minister as her political priority.

The Times.

Government faces crunch decisions this Autumn as Universal Credit enters its ‘most difficult phase’.

The Resolution Foundation says,

The government must get the final phase of Universal Credit (UC) right this Autumn if it’s to reboot the reputation of its flagship welfare reform programme and support millions of low income families, according to a new report published today by the Resolution Foundation.

The benefits of moving focuses on the final, and in many ways most difficult, phase of UC, which involves moving 2.1 million families currently claiming benefits (such as tax credits and Employment Support Allowance) onto the new system. This includes around a million ‘just about managing’ families who are in work.

The details of the crucial final phase are due to be decided upon in parliament this Autumn and rolled out from July 2019 onwards. This ‘managed migration’ is the most difficult phase yet for UC because it involves people that have not chosen to apply for the new benefit.

The report notes that the principle of Universal Credit has consistently enjoyed cross-party support on the basis of two key advantages – improved financial incentives and higher-take up for the simplified benefit.

However, the first advantage has been undermined by cuts in Summer Budget 2015 that reduced the generosity of the scheme. The small print of UC’s design also means that the financial incentives for single parents and second earners to enter and progress in work are weak.

The Foundation says that upholding the second key advantage of UC – encouraging higher take-up – should therefore be a top priority for government as it seeks parliamentary approval for the legal rules that will govern the upcoming managed migration this Autumn. It argues that the potential gains from higher take-up are significant, with the OBR estimating that 700,000 families could gain around £2.9bn in total.

The benefits of moving says that a smooth final phase of the rollout, which prevents cash losses and encourages more families to claim their full benefit entitlement, could help to reboot the reputation of UC. However, it warns that further design flaws – which need to be resolved this Autumn – risk further undermining the roll-out and could put people off claiming UC altogether.

The Foundation’s recommendations to make a success of the most difficult phase of UC include:

  • Speeding up UC payments. The government should show that 90 per cent of new claims to UC are paid on time and in full before it rolls out the managed migration process. In February 2018, 83 per cent of claims were paid in full and on time, with little improvement since June 2017.
  • Reducing financial risks. The government should ensure that the state, rather than individuals, bears any financial risk that may arise from teething problems in the managed migration phase. No existing claim should be closed until a new UC claim is in place, so that people don’t lose support altogether.
  • Boosting financial incentives. The government should introduce an earnings disregard for those being forced to move onto UC to prevent claimants with volatile earnings (such as self-employed workers or those on zero-hours contracts), or who have a short-term boost in pay, from losing out financially from the transition. More broadly, the government should improve incentives by increasing single parent work allowances and introducing one for second earners.

David Finch, Senior Economic Analyst at the Resolution Foundation, said:

“Universal Credit enjoyed almost universal support when it was first announced. But its reputation has been undermined in recent years by significant cuts and payment delays that have left too many claimants in difficult financial straits.

“But despite these problems, the rollout of Universal Credit is still going ahead and is in fact about to enter its most difficult phase as two million families already claiming benefits start to be moved onto the new system – including one million just about managing families.

“Get this final phase of the rollout right and it could help to reboot Universal Credit’s reputation, but get things wrong and UC’s reputation risks taking another battering, and worryingly some families could be put off claiming UC altogether.”

 

Calls for further delays to fix flaws before million working families move on to benefit

Failure to manage the critical next phase of universal credit, during which about a million low-income working families will be moved on to the benefit, could sink the controversial welfare programme altogether, experts have warned.

The Resolution Foundation says ministers should consider further delays to the rollout of the benefit so that design flaws can be fixed and further safeguards put in place to protect claimants from risks of financial hardship.

There is concern that universal credit could prove politically explosive for ministers when the large cohort of “just-about-managing” working families in receipt of tax credits are subjected to its well-documented problems with payment delays.

More than 2 million households – including about a million working families, as well as 750,000 disabled and ill claimants unable to work – will be transferred to universal credit under so-called “managed migration” over three years from next July.

Meanwhile:

‘Debt, tears and suicidal thoughts’: This is the reality of universal credit in Cardiff

Carer Vivien Soloman, 60, from Tremorfa, has been told she cannot receive anything as her partner’s pension counts towards the maximum household income they’re entitled to under Universal Credit.

Despite being signed off work after breaking her wrist in April last year and suffering from stress, she is now without any income.In six years time, when she turns 66, she will be entitled to receive her own state pension yet under Universal Credit she is not entitled to any benefits.

Vivien recently received a letter from her housing association telling her she is nearly £1,000 in arrears and faces being forced out of her home after 24 years.She and her partner have seen their council tax bills jumped up by over double – rocketing to over £90 a month when she used to pay £24 a month.

That’s on top of a maxed out overdraft of £2,000, with bank charges of £35 a month, paying her sister £30 a month for credit card debt and still paying for her father’s funeral after he died in April.With no savings, she can’t afford to pay it back, and it’s making her have suicidal thoughts.Vivien, whose partner is a retired painter and decorator, feels trapped.

Written by Andrew Coates

September 8, 2018 at 11:45 am

As Rents Rise and People Risk Homelessness: End the Freeze on Local Housing Allowance!

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Housing benefit freeze leaving poorest private renters with shortfall of up to £140 a week

Low-income tenants in the private rented sector face a “heat, eat or pay rent” problem because housing benefit rates have failed to keep up with the soaring cost of accommodation, a study has found.

The benefit freeze is not just affecting people’s ability to pay bill, or to buy food in the shops (where massive price rises are predicted on basics)

Welfare Weekly reports,

Research from the Chartered Institute of Housing (CIH) reveals that more than 90% of Local Housing Allowance (the equivalent of housing benefit for private renters) rates across Great Britain are insufficient to cover even the cheapest rents, as they were originally designed to do.

LHA rates were frozen for four years in 2016 and CIH is warning that they have fallen so far behind even the cheapest rents that private renting has become unaffordable for most low income tenants – putting them at risk of homelessness as they are forced to choose between basic living expenses and paying the shortfall. The organisation is calling on the government to review the policy and to end the freeze immediately.

LHA rates are meant to cover the cheapest 30%t of homes in any given area. But they haven’t been increased in line with local rents since April 2013 and they remain frozen until April 2020.

As a result, renters are facing gaps ranging from £25 a month on a single room in a shared home outside London to more than £260 a month on one to four-bedroom homes in some areas of London.

Over 12 months, those gaps rise to £300 and £3,120 – making it increasingly likely that renters will be forced to choose between paying for basic necessities like food and heating or their rent.

The government introduced targeted affordability funding in 2014 to bridge the biggest gaps but CIH’s new report has found that its impact has been negligible, covering only a handful of the shortfalls completely.

CIH chief executive Terrie Alafat CBE said: “Our research makes it clear just how far housing benefit for private renters has failed to keep pace with even the cheapest private rents.

“We fear this policy is putting thousands of private renters on low incomes at risk of poverty and homelessness.

“We are calling on the government to conduct an immediate review and to look at ending the freeze on Local Housing Allowance.”

Matt Downie, director of policy and external affairs at Crisis, said: “This report highlights just how much housing benefits for private renters are falling short of the levels needed, leaving many homeless people stuck in a desperate situation and putting yet more people at risk of homelessness.

“There are 236,000 people across Britain experiencing the worst forms of homelessness – this includes those sleeping on the streets, living in unsuitable hostels, and sofa-surfing. In many of these cases, people simply can’t find a home because there isn’t enough social housing and housing benefits are too low to cover private rents.

“Homelessness is not inevitable – there is clear evidence that it can be ended with the right policies in place. The government must urgently reform housing benefits for private renters, so they not only match the true cost of renting but also keep pace with future rent changes.”

There is some serious research behind this: MISSING THE TARGET? Is targeted affordability funding doing its job?

What are the consequences of the uprating freeze for private renters?

• Tenants are expected to make up any gap out of their jobseeker’s allowance (JSA) (or other basic benefits) even though basic benefits don’t include an allowance for rent. Basic working age benefits are also subject to the uprating freeze and are now only worth 93 per cent of their 2012 value.

• Single people aged under 25 only get the shared accommodation rate and a lower rate of JSA (£57.90). On average they are expected to contribute 10 per cent of their JSA on the gap (equivalent to a 17 per cent contribution in real terms).

• Young jobseekers’ resilience is severely limited because the basic benefit allowance for this group

 

Background: the local housing allowance and uprating policy (2008-2020)

How LHA rates become misaligned with local rents

• In April 2008 the government introduced the local housing allowance (LHA) which set a maximum rent that housing benefit can cover for private tenants. The LHA is the rent figure which a set percentage (currently 30) of all of the rents in that market fall below (‘the 30th percentile’) – ensuring that same percentage of homes is affordable to low income households.
• For each of the 192 distinct local housing markets across Great Britain there are five LHA rates, one for each category of dwelling (e.g. shared accommodation, one bedroom, two bedrooms etc.). Each LHA rate is calculated using a database of rental market evidence compiled by rent officers (professional valuers who work for Her Majesty’s Revenue and Customs in England or the devolved governments in Scotland and Wales).
• In April 2013 the link with local market evidence was broken and henceforth (for an unspecified period of time) existing LHA rates were uprated by the consumer prices index (CPI) or a lower figure set by the government. From April 2014 for two years the uprating index was capped at one per cent, and from April 2016 LHA rates were frozen for four years.
• Over the medium to long term rents tend to rise faster than prices (i.e. CPI), so that from April 2013 when the link with local rents was broken, the LHA’s purchasing power receded and this has accelerated during the one per cent cap and the current freeze.
• From April 2014, to ensure that LHA rates remain reasonably well aligned with local rents, the government introduced targeted affordability funding (TAF). Under this policy a proportion of the savings that accrue from uprating by one per cent or zero instead of CPI is awarded to those LHA rates that have the lowest percentile value (i.e. cover the smallest proportion of the whole range of rents that are paid in that market).

Written by Andrew Coates

August 30, 2018 at 11:38 am

Sanctions and Homelessness: Universal Credit in Action.

with 41 comments

Image result for homelessness and sanctions

The Threat Looming Over Universal Credit Claimants.

As the juggernaut of Universal Credit continues, and millions are caught up under its wheels, it’s sometimes best to illustrate its effects through individual cases:

This is one:

“I was sanctioned after missing a Universal Credit appointment due to seizures. The DWP should help job-seekers like me, not penalise them.”

By Luke O’Donnell in today’s ‘I’.

They said Universal Credit would make things more simple. Having fallen foul of the Department for Work and Pensions’ (DWP) trigger-happy use of sanctions, I can say that this is not the case. I have epilepsy and missed a Job Centre appointment in November after having seizures.

I missed a second meeting in January after being in a status epilepticus, which left me in a hospital bed, connected to a drip. While I had evidence for this, I could not provide anything to prove why I missed my previous appointment. The DWP stated I had “failed without good reason to comply with a work-related requirement to attend a work-focused interview”. I was sanctioned for three of my four weeks’ benefits.

Sanctions demotivated me This showed me there was no common sense or discretion being applied by the DWP. In bundling all benefits into one system they appear to have lost the ability to use reasoning or any sense of fair play.

O’Donnel continues:

Their sanctions only served to demotivate me further than my health had already. Quite the opposite of the intended effect. It just augmented my worries about finding an employer who’d take my health seriously because if a Government agency doesn’t consider it worth taking into account, what would employers think when they find out about my brain damage?

My case was so outrageous that when I tweeted the letter upholding my sanctions after I’d navigated the DWP’s arbitrary “mandatory reconsideration” process, it quickly gathered momentum on social media and was picked up by i and BBC News. As a result of the widespread negative attention the DWP’s flagship new benefit service received, my case was given a “second reconsideration”. My benefits were hastily reinstated and I heard no more. I was lucky. But I still wanted the DWP to acknowledge it was aware of the effects Universal Credit was having on people. I got in contact with Esther McVey, Minister for Work and Pensions, but received no response. So I tried again, to no avail.

My case is just a drop in the ocean. A simple search on Twitter will reveal thousands of people with disabilities and serious health conditions are being penalised instead of helped. I personally believe there is now a culture of “sanction by default, for as much as possible” within the DWP. We are being treated as though we’ve done something wrong because of the effect our health has on our ability to work. What use is a social security system that works against those very people it was initially set up to help?

Background: 

DWP says sanction review of epileptic man who missed benefits appointment was due to press coverage Luke O’Donnell said it was ‘satisfying’ to read a letter from the Department for Work and Pensions.

Serina Sandhu Wednesday August the 8th.

In March, i reported that Luke O’Donnell, who has epilepsy, was penalised after missing a work-related appointment for Job Seeker’s Allowance because he could not prove his seizures had prevented him from attending. At the time, the 24-year-old said the system was “cold-hearted”.

The story was widely shared and less than two weeks later, the Universal Credit department at the DWP informed him his sanctions would be reversed, saying “not enough consideration was placed on Mr O’Donnell’s health following three days of epileptic episodes”.

Even though his case was resolved and benefits fully reinstated, Mr O’Donnell wrote to Work and Pensions Secretary Esther McVey in June because he wanted acknowledgement that she was aware of the effects Universal Credit was having on claimants. “I wanted to see what she had to say. How does she justify these problems she’s causing people?”

A response from her office read: “The Department for Work and Pensions are committed to ensuring people with disabilities and health conditions get the right support they need, and we are sorry that we have not met this standard during a period of time when you were in ill health.” But it was also confirmed that the move to review Mr O’Donnell’s case was triggered by the press coverage. The decision to revoke the sanctions, however, was a result of a “full review of all evidence and information.”

It’s good that Luke O’Donnell found a way out of his problems.

But sanctions can have even more devastating effects.

The system cannot deal with the most “difficult” cases.

Welfare conditionality, benefit sanctions and homelessness in the UK: ending the ‘something for nothing culture’ or punishing the poor?

We have here a ‘multiple-miscreant’ population (homeless, unemployed, poor, many dependent on drugs or alcohol) but a policy (benefit sanctions) virtually impossible for them to comply with. It is, therefore, difficult to see how any moral rectification can flow from such a policy. It can, however, discipline or punish. Rather than producing a compliant working class, then, it pushes people out of the very system (social security) initially designed to protect them

The impact of Universal Credit and sanctions can be seen in this area, the news story that’s hit the headlines today.

Rough sleeping: £100m government plan to tackle homelessness unveiled

The Guardian  publishes this commentary:

Homelessness is caused by policies: decisions on how many houses to build, and in which price range. Universal credit, sanctions, the child benefit cap – these are political decisions that have contributed to people being unable to afford their rent. Up to a third of universal credit claimants are having their payments deducted because they are in rent or council tax arrears. The government is acting like its own incompetent opposition, decrying a situation of its own making, offering solutions that are nowhere near the source of the crisis.

Homelessness is back on the Tories’ agenda, yet it’s they who made this crisis worse

Written by Andrew Coates

August 14, 2018 at 11:28 am