The Government’s flagship social security reform, Universal Credit, was intended to bring together six key benefits to simplify and build a system that was fairer and better able to tackle poverty, with the underlying principle that work always pays. These principles were accepted by all political parties.
Yet, as the Government step up their roll-out of Universal Credit Full Service, with nearly one million people moved onto the system by the New Year, it is clear that there are fundamental failures, both in the design, administration and implementation of Universal Credit which have been compounded by cuts, undermining the original principles.
The Trussell Trust, the country’s biggest foodbank network, has found that in areas where Universal Credit has already been rolled out foodbank use is 30 per cent higher than elsewhere, that demand for emergency food parcels continues to soar and that there are concerns that they will run out of food in the run-up to Christmas.
The Child Poverty Action Group report that by 2022, the number of children living in poverty is predicted to increase by one million, including 300,000 children under five years old, directly as a result of cuts to Universal Credit.
And the lone-parent charity Gingerbread have found that lone parents are being particularly penalised under Universal Credit with, for example, a single parent with two children working full time as a teacher losing up to £3,700 a year in real terms by 2019.
There are also huge problems with housing arrears. Nearly half of families who are in arrears under Universal Credit state that their arrears started after they made their claim. Tenants are currently being put at risk of eviction and homelessness. The delays mean that some landlords are now refusing tenants who are on Universal Credit, severely limiting their housing options and also causing significant problems for the provision of suitable temporary accommodation for homeless families.
Work is no longer the route out of poverty that it once was. Some 7.4 million people in working households today are living in poverty, with over half of all those below the breadline. Two thirds of children in poverty are in working families. The ‘low pay, no pay’ cycle and the widespread and growing use of zero hour contracts is seeing millions of people stuck in poorly paid, temporary and unstable jobs.
So what needs to change? The design flaws are significant; in particular the six weeks people are expected to wait from making a new claim to receiving support is leaving families with nothing to live on. The debt, rent arrears and evictions we’re seeing are attributed to this wait.
The Government should reduce the six-week wait for payment, so that it better reflects the way people are paid, including allowing people to receive support every two weeks.
Other alternative payment arrangements should include wider use of split payments to households and ensuring everyone has the opportunity to have their rent paid directly to the landlord to stop the spate of pre-emptive eviction notices that we are now seeing across the private rented sector.
And then there are the cuts which George Osborne announced in the 2015 Summer Budget which wiped out the key principle of Universal Credit – always making work pay. According to the Resolution Foundation, the cuts see families up to £2,600 a year worse off. It is these cuts that will see our children pushed into poverty.
Parliament has voted unanimously, by 299 votes to 0 to pause the Universal Credit rollout to allow the problems to be fixed. The Government must listen and respond to these concerns or step aside and let Labour get on with the job.
Debbie Abrahams is the Shadow Work and Pensions Secretary and MP for Oldham East and Saddleworth