A flawed system with great potential—or a replacement benefits service that isn't fit for purpose?by P Wallace and D Ghelani / November 12, 2019 / Leave a comment
Yes: Paul Wallace
The conventional view is that Universal Credit (UC) is a good idea let down by poor implementation, delays and cuts. That is far too lenient a verdict: it was misconceived from the start.
The project has now been rolled out to around two million families. If it is ever completed, supposedly by the end of 2023 (six years late), around seven million families will then be getting UC, which replaces six working-age means-tested benefits. The intention is that claimants will face a simpler and clearer system that will encourage them wherever possible to work. But the central premise—that a single form of income support can deal with so many people with such diverse and changing lives—is fatally flawed.
Universal Credit aims to simulate the world of work, with monthly payments in arrears, and sets stern conditions to find jobs. The design disregards just how many claimants live hand-to-mouth, the reason why welfare, including housing support, had previously ensured prompt financial help to those in need. It also fails to recognise that there are many people who have compelling reasons to be out of work for longer periods, such as those who are incapacitated in some way or single parents with young children.
The reform yokes together traditional out-of-work benefits with the more recently introduced tax credits that aim to prop up working incomes. Yet the systems are poles apart in how they operate. Integrating them requires a monthly adjustment of payments that introduces financial instability into the lives of those least able to cope with it.
The fact that UC, where introduced, has coincided with the rising use of food banks and rent arrears is no accident. The new benefit is neither simple nor clear for claimants, and—unlike before—they now have all their eggs in this single baffling basket.
For those who get a job or are already working, money still has to be withdrawn as incomes rise. Merging the calculations into one doesn’t in itself make things more generous. If anything, UC weakens work incentives for lone parents and second earners with children.
The old benefits and tax credits system may have been imperfect, but what is replacing it is far worse. Policymakers, like craftsmen, need several…