Poorest face ‘double whammy’ if Tories ditch triple lock on pensions

Powered by Guardian.co.ukThis article titled “Poorest face ‘double whammy’ if Tories ditch triple lock on pensions” was written by Phillip Inman, for The Observer on Sunday 30th April 2017 04.59 UTC

Plans to ditch the triple lock on the basic state pension would represent a “double whammy” for the poorest pensioners, many of whom have already lost out under this month’s new flat-rate pension, according to a leading pension expert.

Pensioners who rely on the state pension for most of their income will be the biggest losers should the Tories drop the element of the triple lock that guarantees annual rises of at least 2.5%.

Chris Noon, a partner at leading pensions consultancy Hymans Robertson, said linking increases to earnings growth or inflation would, over time, erode the value of the pension and push larger numbers of people into poverty on reaching retirement age. He said: “The low paid were the community most negatively affected by the significant changes to the state pension introduced from April 2016. Removing the 2.5% minimum increase … is a double whammy that would again impact this community hardest over the medium to long term.”

The flat-rate state pension, worth £159.55 a week, combines the basic state pension with pension credit and the state second pension, which previously rewarded low-paid workers with generous top-up payments. Estimates put the savings at £8bn by the end of the parliament. Ending the triple lock would come on top of this cut.

Theresa May is understood to be considering replacing the “triple lock” with a less generous “double lock”, and spending some of the money saved on social care. The triple lock has come under scrutiny since figures showed it was behind a 22% increase in pensioner incomes in the last seven years, while average earnings rose by only 12%. It is understood that Downing Street is weighing up whether a more affordable “double lock” would be seen as a more sensible safety net for retirees.

Craig Berry, deputy director at the Sheffield Political Economy Research Institute (Speri), said reducing the triple lock would have little impact on the government’s finances over the next few years, while the economy remained strong. But without a 2.5% rise when earnings growth and inflation are low, pensioner incomes will fall back and lead to millions of people over the coming decades needing extra state funds.

“The triple lock should be maintained,” he said. “The policy increases the costs of the state pension only modestly, and represents the least the government can do to ensure its value starts to rise, from a very low base, towards the average for highly developed countries.”

Ros Altmann, the former pensions minister, said she was relaxed about switching to a double lock if the savings were channelled into improving the state pension provision that affects older retirees, including pension credit and the state second pension, which have become less generous in recent years. “The triple lock does not apply to pension credit, so it fails to protect the poorest. It doesn’t protect Serps, the state second pension, widows’ pensions, deferred pensions and so on. So politicians have claimed it protects pensioner incomes but it doesn’t do it. Not properly,” she said.

Britain spends about 6% of GDP on the basic state pension and 6% on an array of benefits and earnings-related top-ups, of which the second pension and pension credit are the biggest.

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Labour pledge to ‘end the race to the bottom’ on pay and worker’s rights

The Labour Party has brought forward plans to strengthen rights at work and “end the race to the bottom in pay, conditions and job security”, accusing the Conservatives of building an economy based on low-paid and insecure employment.

The next Labour Government will invest in the jobs and industries of the future, whilst introducing measures to stamp out zero-hours contracts, increase the minimum wage, and guarantee equal rights for all working people – among other policies.

In an ambitious 20-point plan announced on Saturday, Labour has committed to:

  1. Give all workers equal rights from day one, whether part-time or full-time, temporary or permanent – so that all workers have the same rights and protections whatever kind of job they have
  2. Ban zero hours contracts – so that every worker gets a guaranteed number of hours each week
  3. Ensure that any employer wishing to recruit labour from abroad does not undercut workers at home – because it causes divisions when one workforce is used against another
  4. Repeal the Trade Union Act and roll out sectoral collective bargaining – because the most effective way to maintain good rights at work is through a trade union
  5. Guarantee trade unions a right to access workplaces – so that unions can speak to members and potential members
  6. Introduce four new Bank Holidays – we’ll bring our country together with new holidays to mark our four national patron saints’ days, so that workers in Britain get the same proper breaks as in other countries.
  7. Raise the minimum wage to the level of the living wage (expected to be at least £10 per hour by 2020) – so that no one in work gets poverty pay
  8. End the public sector pay cap – because public sector wages have fallen and our public sector workers deserve a pay rise
  9. Amend the takeover code to ensure every takeover proposal has a clear plan in place to protect workers and pensioners – because workers shouldn’t suffer when a company is sold
  10. Roll out maximum pay ratios – of 20:1 in the public sector and companies bidding for public contracts – because it cannot be right that wages at the top keep rising while everyone else’s stagnates
  11. Ban unpaid internships – because it’s not fair for some to get a leg up when others can’t afford to
  12. Enforce all workers’ rights to trade union representation at work – so that all workers can be supported when negotiating with their employer
  13. Abolish employment tribunal fees – so that people have access to justice
  14. Double paid paternity leave to four weeks and increase paternity pay – because fathers are parents too and deserve to spend more time with their new babies
  15. Strengthen protections for women against unfair redundancy – because no one should be penalised for having children
  16. Hold a public inquiry into blacklisting – to ensure that blacklisting truly becomes and remains a thing of the past
  17. Give equalities reps statutory rights – so they have time to protect workers from discrimination
  18. Reinstate protection against third party harassment – because everyone deserves to be safe at work
  19. Use public spending power to drive up standards, including only awarding public contracts to companies which recognise trade unions
  20. Introduce a civil enforcement system to ensure compliance with gender pay auditing– so that all workers have fair access to employment and promotion opportunities and are treated fairly at work.

John McDonnell MP, Labour’s Shadow Chancellor, said: “These policies will be the cornerstone of the next Labour government’s programme to bring an end to the rigged economy that many experience in workplaces across Britain.

“The scandal of six million people earning less than the living wage, and four million children growing up in poverty are not inevitable. It only takes a change of government to bring these outrages to an end.

“The measures we are planning will make that possible, update our country for the 21st century and prepare us for the economic challenges ahead.

“They will also underpin the values we want to see in the British economy, and underline the scale of Labour’s plans to transform the workplace from the shop-floor up to the boardroom.

“When voters go to the polls on 8th June they should know that if they vote Labour, they will be voting for a change in the balance of power not only in society but in their places of work.

“It will mean tearing up the Tory status quo that allows most people’s wages to fall behind prices, and allow them to start to share in the wealth they help to create.

“Only a Labour government led by Jeremy Corbyn will stand up for the many in our offices and factories, while the Tories are only prepared to protect big business and a wealthy few.”

Commenting, TUC General Secretary Frances O’Grady said: “This is an impressive set of commitments from the Labour Party, many of which have long been advocated by the TUC.

“Making these ideas a reality would make a real difference for millions of hard-working Brits.

“All eyes are now turned to the Conservative Party to see what they are offering people at work. Theresa May’s manifesto will be a real test of her promise to do more for working people.”

Disabled man set himself on fire over benefit changes, inquest hears

An inquest has heard how a disabled man, struggling to cope with mental health problems, committed suicide by setting himself on fire over fears his disability benefits would be cut.

Peter Sherwood, 67, set himself on fire in front of horrified onlookers in Lowestoft town centre on September 4, 2015.

Shoppers rushed to his aid and tried to put out the flames using their jackets, before using a fire extinguisher, the Sudbury Mercury reports.

Mr Sherwood had received a letter from the Department of Work and Pensions, informing him that his Disability Living Allowance was ending and that he needed to reapply for Personal Independence Payments.

Witnesses reported seeing Mr Sherwood spraying writing on the pavement starting with the letter ‘h’ with an aerosol can, before pouring a liquid over his head and setting himself on fire using a cigarette lighter.

Police say the retired builder repeatedly muttered the word “humanity” as he lay on the ground with severe burns.

Peter suffered with a recurrent depressive disorder and psychosis, and had attempted to take his own life on a number of occasions in the past.

He also had a condition called tardive dyskinesia, which would cause involuntary movements to his mouth and is a side-effect of anti-psychotic medications.

Mr Sherwood was taken by air ambulance to a specialist burns unit at Broomfield Hospital, Chelmsford, but sadly succumb to his injuries four days later.

Peter’s Niece Sarah Wilby told an inquest into her uncle’s death that the change to his benefits would have “contributed” to his poor mental state and angered him.

Sarah told the inquest: “I knew he was feeling a bit low the last time I saw him, which was two weeks before he died. He held me close on the sofa and told me he loved me.

“He was a loving person and had a great sense of humour.

“He was angry at many things in life, but could put a good front on.

“I loved him very much and miss him dreadfully.”

She added: “I personally think quite an underlying cause of his anger was the change in benefits.

“Knowing Peter as we did that would have had a huge impact on him.”

Speaking after the inquest, Sarah added: “He believed that the Government was trying to take money off him.

“He seemed very worried about it because he thought he would lose money. He was always worried about money.

“He may have misread it and not focused on the bit about him being able to reapply.”

Sarah said she was left feeling “shocked” by the way her uncle had taken his own life.

She said: “He seemed to want to make some kind of a statement, but I don’t know what.”

Lucinda Stapleton, a care coordinator, told the inquest that Mr Sherwood’s mental problems had affected his self-confidence, and that he thought people were laughing and staring at him when out in public.

“Peter would try to speak to people in the town, but Peter told me people would be scared of him and pull children away as if he was something to be feared”, she told the inquest.

Mr Sherwood was visited by a mental health team on 4 September, who he told about his intention to take his own life.

An appointment was made for him to see a psychiatrist the following week, but Peter killed himself just hours later.

Coroner Peter Dean recorded a verdict of suicide.

If you or someone you know is affected by the issues raised in the article, you can contact the Samaritans on 116 123 (UK & ROI) or visit their website.

‘Damian Green must apologise for misleading WASPI women’, say SNP

The Scottish National Party has said it is “time for the Tories to come clean” on their broken promises to pensioners, after Work and Pensions Secretary Damian Green misled voters by falsely claiming that the Scottish Parliament has the power to end the gross pension inequality faced by WASPI women which is completely false.

The SNP say Damian Green wrongly claimed on Question Time on Thursday night that the Scottish Parliament could use new social security powers to introduce a new benefit for WASPI women in Scotland, despite the legislation on powers for the Scottish parliament explicitly preventing the provision of pension benefits.

Neither can the Scottish Parliament top-up the pension for WASPI women because the UK government has made the WASPI women ineligible for any pension payments.

SNP say the Tories continue to let down Scotland’s pensioners with Theresa May and Work and Pensions Secretary Damian Green failing to commit to maintain the triple lock, which ensures the state pension rises in line with average earnings, inflation or 2.5% – whichever is the highest.

Ian Blackford MP, the SNP’s spokesperson on Pensions, said: “It is time for the Tories to come clean on their broken promises to pensioners and Damian Green must apologise for misleading WASPI women as he desperately tries to distract attention away from his party’s atrocious record on pensions.

“Millions of women born in the 1950s have shamefully been denied their state pension but instead of ensuring that WASPI women receive their fair pension, Damian Green is simply misleading them.

“His claims are simply wrong. Instead of trying to hide from their own policies, it’s time the Tories took responsibility and paid the pensions these women deserve.

“The Tories can afford to put this injustice right for all the WASPI women across the UK by using the surplus in the National Insurance Fund instead of asking Scots to pay twice for the benefits they are entitled to.

“With the plight of millions of WASPI women who have been denied their rightful state pension, pensioner poverty on the rise despite millions in unclaimed pension credit and housing benefit and now a potential U-turn on the triple lock – the Tory record on pensions is absolutely appalling.

“At this election Scotland’s pensioners have the chance to strengthen their hand with a group of SNP MPs who will stand up for pensioners rights and tell the Tories that they will not be taken for granted.”

UK should axe state pension for rich people, says OECD

Powered by Guardian.co.ukThis article titled “UK should axe state pension for rich people, says OECD” was written by Angela Monaghan, for theguardian.com on Thursday 27th April 2017 09.11 UTC

Britain should stop giving the state pension to the rich and instead spend the money on benefits for the poor, according to the Organisation for Economic Co-operation and Development.

The Paris-based thinktank said that ending payments to the wealthiest 5% to 10% would allow the government to give more to people in greater need of support.

Under the current system, anyone who has paid national insurance for 30 years is eligible for the state pension, regardless of wealth.

In comments reported by the Financial Times, Mark Pearson, deputy director of employment, labour and social affairs with the OECD, said that like other countries, the UK faced the rising costs of an ageing population, with more pensioners and fewer people of working age.

“Faced with these pressures, are you going to ask people of working age to pay more, or people to work longer before they can claim their pension?

“Or another way to ensure an adequate pension is to think about whether the pension should only be paid to those who really need it, to ease the tyranny of the maths. Giving less [pension] to the people at the top would free up resources to increase general benefits.”

Pearson said Britain’s pension system was among the least generous of the OECD’s 35 member countries. The basic state pension is worth £6,360 a year, and the full new state pension introduced in 2016 is worth £8,297 a year.

“The UK pension is pretty low,” he said.

The state pension has become a key focus in the early stages of the general election campaign, with a refusal from Theresa May on Wednesday to rule out that a re-elected Conservative government would scrap the so-called “triple lock”.

Under the existing system, the basic state pension increases each year by the same as average earnings, the inflation rate or 2.5% – whichever is the highest.

Tom McPhail, head of policy at Hargreaves Lansdown, rejected the OECD’s idea of removing the state pension from the richest members of society.

“It sounds like a pretty bad idea. If you want to take money away from the rich, the tax system is usually a better place to go,” he said.

“It has the potential to be quite socially divisive and one of the essential and valuable elements of the state pension is the reasonably clear and simple entitlement structure – if you pay your national insurance, you will qualify for it.”

McPhail added it would be politically unwise to start undermining the principles of the universal state pension, and could potentially exacerbate intergenerational tensions.

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Welfare cuts exacerbating Britain’s housing crisis

Political parties must focus on policies to build more homes, make housing more affordable and get to grips with rising homelessness, according to the Chartered Institute of Housing (CIH).

Ahead of the General Election on 8 June, the organisation is calling on all parties to commit to developing a long-term plan to solve the UK’s housing crisis.

It comes as a Public Accounts Committee report published today (Friday 28 April) warned that problems of homelessness and affordability are likely to persist for years unless more ambitious action is taken.

Chief executive Terrie Alafat CBE said: “Tackling our housing crisis has to be a top priority for all political parties. We need cross-party consensus to drive forward the measures that will make a difference.”

CIH said long-term plans should focus on:

• Building more homes – for example by removing the barriers to local authorities building homes
• Making homes more affordable – for example by directing more of the housing budget towards genuinely affordable homes to rent
• Reducing homelessness – for example by making sure councils have the resources they need to deliver the new Homelessness Reduction Act
• Making sure the welfare system is not obstructing moves to make housing more affordable – for example by exempting social and supported housing from the Local Housing Allowance

Terrie Alafat said: “We know we need to build around 250,000 homes a year in England alone to keep pace with our growing population, but we have failed to build anywhere near that number for decades. This is a long-term challenge that needs a long-term plan from whoever is in power come June 9.”

She added: “It’s not just about building more homes, it’s about building more affordable homes for people on lower incomes. 32,110 affordable homes were delivered in 2015/16 – that’s the lowest level since 1991/92 at a time when need is increasing.

“We need more homes across the spectrum – for home ownership, for private and social rent, and for shared ownership – but we believe more investment is urgently needed in genuinely affordable homes to rent.

“The next government needs to look at rebalancing the housing budget – affordable housing currently accounts for 16 per cent of direct total investment and we think this needs to increase.”

Terrie Alafat said the new Homelessness Reduction Act was a good first step towards tackling rising levels of homelessness, but added that legislation on its own would not be enough.

She said: “We know that homelessness is rising in all its forms for a range of reasons, partly because of the pressures on the housing market but also some of the welfare changes that have come into force over the past few years.

“History tells us that we can reduce or even eliminate homelessness but it does require a co-ordinated approach – that means government investment, funding for affordable housing and a concerted effort across the housing and homelessness sectors.”

CIH is also calling on the next government to review the welfare reforms that have been introduced since 2012 and measures due to be rolled out over the next few years.

Terrie Alafat said: “The cumulative impact of the various measures that have been brought in is causing real hardship for people across the UK.

Our research for example has shown that 116,000 families (and 300,000 children) will be affected by the reduced benefit cap which came into force in November, leaving them with a weekly shortfall of more than £100 in help with their housing costs in many areas.

“We are getting to the stage where even the most affordable housing is out of reach for people who need it if they need any kind of help with their housing costs. And it’s going to get worse from April 2019 when the Local Housing Allowance cap is extended to social housing.

“Whoever wins the election needs to take a step back and make sure that welfare policies are not obstructing housing policies designed to make sure people can access a decent home at a price they can afford.”

This is an official press release from the Chartered Institute of Housing. Headline chosen by Welfare Weekly.

‘Citizen’s Income’ would require ‘unthinkable tax rises’, say MPs

A cross-party group of MPs have rejected the idea of a ‘Citizen’s Income, or ‘Basic Income’, as a replacement for the existing welfare system, claiming that such a system would require “unthinkable tax rises” and would not help to alleviate poverty.

Citizen’s Income is an unconditional payment made to every person regardless of age, gender, wealth, or employment status, and cannot be altered or removed if a persons financial circumstances change or improve.

It would be topped up with additional amounts in certain circumstances. For example, to address the extra costs associated with disability and housing support.

Supporters of the Citizen’s Income claim it would help to remove the stigma attached to claiming social security benefits, because it would be payable to every person with the right to reside in the UK.

Louise Haagh, Reader in Politics at the University of York, told MPs on the Work and Pensions Committee that she saw Citizen’s Income as one part of a solution for “implementing a more humane form of basic security at the bottom of the welfare state”.

Annie Miller, Chair of the Citizen’s Income Trust, said: “One of the problems with the current system is the structure. It is not based on the individual, it is not universal, it is targeted on poor people.

“It is much easier to stigmatise them, humiliate them and reject them leading to low take-up. So targeting does not protect poor people. Universal systems protect both rich and poor.”

Becca Kirkpatrick, Chair of the West Midlands Branch of UNISON, said Citizen’s Income would ease many of the fears and anxieties felt by people trying to navigate an increasingly conditional welfare system, where claimants face the possibility of financial sanctions if they fail to comply with strict conditions.

The Adam Smith Institute supports a form of Citizen’s Income that it refers to as “free market welfare”. This would replace the UK’s existing welfare system which, it argues, is “costly to administer, complicated to navigate, and designed for a postwar-style labour market that no longer exists”.

MPs also heard from witnesses who believe an unconditional system, such as that provided by a Citizen’s Income, would mitigate developments in the modern labour market. For example: the rise in zero hours contracts, an increasingly automated workplace environment (think robots), and the so-called “gig economy”.

However, opponents claim the costs of an unconditional Citizen’s Income would lead to significant tax rises, disincentivise work, and would still require some means-testing to ensure the needs of older and disabled people are met.

David Piachaud, Professor of Social Policy at the LSE, explained that such complexities are common with Citizen’s Income and may actually undermine the case for simplicity cited by advocates.

Declan Gaffney, a political consultant, explained: “As a practical proposition, what tends to happen is that [Citizen’s Income] is sold under the brand of universality and flat rate payments and then one finds that as you move from that abstract idea of a single flat rate income going to everybody to some kind of practical implementation, the elements on which it is sold – lack of conditionality, the flat rate base and so on – begin to fall away and it starts to gradually become more and more like an adaptation of existing social security systems.”

Peter Alcock, Emeritus Professor of Social Policy at the University of Birmingham, told MPs: “I think it is a political distraction. There are all sorts of problems with the benefit system and there are all sorts of issues there.

“We need to look at what the role of the state is to support employment, to improve the provision of care, to give better incentives to people to take certain kinds of jobs. They can be dealt with, and should be dealt with, within the existing structures that we operate.”

He added: “Either you have a very high level of basic income, in which case you are going to have to have massively increased levels of taxation because there is nowhere else for their money to come from, or you do it on the revenue neutral basis that people have been talking about.

“But if you do it on a revenue neutral basis you do not solve any of the problems because you need to retain all of the means testing and all of the other elements of the benefit system that currently may or may not be causing problems.

“The problem is you don’t solve them like this. It is either too expensive or it isn’t worth having.”

The Work and Pensions Committee concluded: “As there is no prospect of introducing a fully-fledged CI, a more affordable system would need to be layered on top of the existing benefit system to ensure that additional needs such as disability or housing support were accounted for.

“This would not reduce complexity, and it is difficult to see how it would substantially alleviate poverty or provide income security. Indeed, it would create a system that is scarcely distinguishable from Universal Credit.

“There are many problems with the existing benefit system, but CI is an unhelpful distraction from finding workable solutions to them. We urge the incoming government not to expend any energy on CI.”

Commenting, Frank Field MP, Chair of the Work and Pensions Committee, said: “A universal Citizen’s Income would either require unthinkable tax rises or fail to deliver its objectives of simplification and a guaranteed standard of living.

“There are problems in the welfare system, but CI is not the solution to them. Rather it is a distraction from finding workable solutions.”

SNP vow to kick the private sector out of Scotland’s benefit assessment system

The new Scottish Social Security system will reject the callous policy agenda of the hard-right Tory party by ensuring that the people using the service are put before the interests of private companies hoping to make a quick profit, the Scottish Government announced today.

Social Security Minister Jeane Freeman confirmed that there would be no contracting with the private sector in the Scottish Government’s model for assessments for Scotland’s benefits – and the move has been welcomed by SNP MSP Sandra White.

It signals a clear break from the Tory government approach which has seen private companies profit from the failed assessments process the Tories have imposed on people – one that the Scottish Government will fundamentally change, introducing respect and dignity to the system.

Commenting SNP MSP Sandra White, who convenes Holyrood’s Social Security Committee, said: “Today’s announcement by the Scottish Government is to be very much welcomed and proves once again the SNP’s commitment to building a new social security system with dignity and respect at its heart – a clear divergence from the cruel system imposed by the Tories at Westminster.

“While the Tories impose cruel and ineffective sanctions, cut the benefit payments on those who need it most, stop housing benefit for those under the age of 21, continue with the hated bedroom tax, and bring about the most vile and disgusting policy imaginable in the two child cap and rape clause, the SNP has a strong record of standing against these disgraceful policies.

“And, where we will get limited powers over social security, the SNP will introduce a system Scotland can be proud of and works for the people not against them.

“The SNP Scottish Government has spent over £350 million in mitigating callous Tory welfare cuts, opposed the Tories’ reckless closure of job centres across the country, laid out concrete and substantial alternatives to the cruel and ineffective sanctions regime, and made absolutely clear our opposition to the vile Tory rape clause.

“Profit has no place in assessments for benefits and today’s announcement ensures that the people of Scotland will not be used as cash cows for private sector firms.”

This is an official press release from the Scottish Nation Party (SNP). Headline chosen by Welfare Weekly.

Charities welcome ‘crucial step forward in fighting homelessness’

Leading charities have hailed a ‘crucial step forward in fighting homelessness’, as new laws designed to reduce homelessness in England are granted royal assent.

Conservative MP Bob Blackman’s Homelessness Reduction Bill has become an Act of Parliament, giving councils a legal duty to support homelessness people and requiring them to introduce measures to prevent people becoming homeless in the first place.

Responding to the announcement, Jon Sparkers, Chief Executive of homeless charity Crisis said: “The Homelessness Reduction Act is a crucial step forward in fighting homelessness.

“For 40 years we’ve had a system that fails too many homeless people by turning them away from help when they need it most. We’d like to thank the peers and MPs from across the political spectrum who came together to back this bill, as well as Government ministers for their leadership.

“But this Act is by no means a cure-all and, at a time when the number of people sleeping on our streets continues to rise at an alarming rate, we are calling on all political parties to commit to ending rough sleeping in their upcoming manifestos.

“The success of the Homelessness Reduction Act shows what can be achieved when the political will exists to tackle the root causes of homelessness. Whoever wins the general election must make ending rough sleeping a top priority once they are elected.”

Claire, a St Mungo’s client with experience of rough sleeping, said: “It’s great that the law is being changed to help people who are facing homelessness. It should be a top priority. I slept rough for over thirty years after running away from home and I know the dangers that people face and how you can get stuck on the streets.

“My mental health suffered a lot and I believe more needs to be done to help people like me who end up sleeping rough. For a long time I felt very alone and since having some proper therapy I am in my own flat thanks to St Mungo’s.”

Denise Hatton, Chief Executive of YMCA England & Wales, added: “The Homelessness Reduction Bill has received royal assent today and will go a long way to ensuring people at risk of homelessness get the right support from their local authorities before their situation turns to disaster.

“With the General Election in full swing and political parties in the process of developing their manifesto commitments, now is the time where we should be seeing a full commitment from all parties so that young people who find themselves homeless are able to receive the right support to get their lives back on track.”

Solving serious concerns with Universal Credit an ‘urgent priority’

Work and Pensions Committee Chair Frank Field has written to Damian Green, highlighting serious concerns with the Government’s flagship welfare reform, Universal Credit:

“In February 2017 we issued a call for written evidence on Universal Credit (UC). This followed concerns we heard in oral evidence from local authorities, social landlords and charities about the rollout of full service UC.

“In a short period we received submissions from 33 local authorities and eight representative bodies from that sector; 57 providers of social housing and six representative bodies from that sector; seven private landlords and four representative bodies from that sector; 34 charities and advice organisations which assist UC claimants; and 30 individual claimants. The written evidence is published on our website.

“Many respondents supported in principle the objectives of UC. In particular, it is imperative that the welfare system creates incentives to work: work must pay.

“It was, however, striking that the evidence raised a near unanimous set of concerns about how UC is currently operating in practice. Although our inquiry was cut short by the dissolution of Parliament, given the urgency of those concerns the Committee agreed that I should write to highlight the main issues witnesses raised:

“We heard that some claimants have waited 12 weeks or more for their first payment, double the expected wait and resulting in hardship and distress.

“We were concerned that the Department was unable to provide performance data demonstrating how typical such delays are.

“Witnesses told us that while many claimants can manage receiving UC monthly in arrears, some, usually the most vulnerable, are struggling to adapt to this change. The onus for supporting vulnerable claimants often falls to local bodies. As a result, some costs were shifting from the Department to other public bodies rather than being saved.

“We heard that the seven waiting days at the start of a UC claim were adding to financial difficulty among some claimants and did not contribute to UC achieving its objectives.

Lord Freud, the Minister responsible for UC from 2010-2016, told us that waiting days were not helping the introduction of UC.

“The local authorities, landlords and advice organisations that wrote were unanimous in telling us that UC was adding to problems of rent arrears. This could have serious consequences for claimants and place additional burdens on landlords, local authorities and support organisations.

“Several landlords reported that alternative payment arrangements, in which housing costs are paid directly to the landlord, had helped stabilise arrears in cases of high and escalating debt. We heard, however, that such arrangements are currently only available in very specific circumstances.

“Prompt and effective communications between landlords, support organisations and the Department are essential to UC operating as intended. We were told that the withdrawal of implicit consent for the Department to discuss individual cases and share information with third parties in the UC full service had made it harder to expedite the resolution of problems.

“The Department tacitly acknowledged this when it recently announced: “the implicit consent approach which operates well for all other DWP benefits can be extended to MPs representing the interests of their constituents who are engaging with or directly claiming Universal Credit”.

“This approach has not, however, been extended to local support agencies with pre-existing
relationships with local DWP teams. Further DWP initiatives that might ease the communications problem, such as the Trusted Partner Programme and Landlord Portal, are also not yet fully operational.

“Finally, we heard concern about the interaction of UC and emergency temporary accommodation. Local authorities must ensure that families with children are not placed in emergency temporary accommodation for more than six weeks.

“The housing element of UC payments is calculated based on the claimant’s accommodation at the end of their UC assessment period. If they are moved from costly emergency accommodation to standard premises during the assessment period, considerable debts to local authorities, which in many cases would not be repaid, could accrue.

“We heard that the housing costs of UC claimants residing in supported accommodation were being met instead through Housing Benefit, resolving a similar issue.

“We are aware that while UC full service is currently rolling out at just five Jobcentres each month, the Department plans to significantly ·accelerate the rollout rate to 30 Jobcentres a month from July 2017, then to 55 a month from October 2017 and 65 a month from February 2018. We heard concerns that this planned timetable risked exacerbating any problems in the limited current rollout that are not resolved.

“The practical operation of UC should be an urgent priority both for the Department and our successor Committee in the new Parliament.”

Rt Hon Frank Field MP