Fundamental changes to Universal Credit needed before more claimants are moved over, says Holyrood Committee

06.02.2019

Holyrood’s Social Security Committee has raised deep concerns with Universal Credit in its latest report into in-work poverty.

Published today, the report warns that people due to move from Tax Credits to Universal Credit face significant issues and a dramatic culture change.

Following evidence from the PCS Union and listening to the experience of those navigating the system first hand, the Committee has called on the Department for Work and Pensions (DWP) to demonstrate that sufficient resources are available and robust workforce plans in place before claimants are moved over from Tax Credits to Universal Credit.

The Committee also called for the threat of in-work sanctions to be scrapped, and, if this was not done, then consideration should be given to removing tax credits from Universal Credit all together. The Committee also stated that the dramatic reduction in the number of job centres, at a time when Universal Credit is being rolled-out across Scotland, was a serious error of judgement which impacted on service and compounded the disconnect between many service users and the DWP.

The Committee believes there is a case to be made to review local access to the DWP and other forms of employment support across Scotland to allow for more localised and community-focussed support, in place of an increasingly remote and digital by default support system.

In a wide-ranging report the Committee urged the UK Government to urgently reconsider how Universal Credit impacts on claimants who are self-employed and to reconsider the UK Government's transitional protection regulations which provide no exceptions, including in
cases of domestic abuse.

Social Security Committee Convener Bob Doris MSP said:

“The problems caused by the design of Universal Credit are well-documented. Universal Credit is a significant cause of the rise in demand for foodbanks and we heard for ourselves deeply concerning accounts from people about their experiences with the new system. 

“However, there has been less light cast upon the proposed migration of working families who receive tax credits and how Universal Credit will impact them. The Committee makes it clear we are opposed to attaching punitive conditions to those already in work. We cannot support those on legacy benefits being moved over to Universal Credit in such circumstances. Unless the threat of sanctions and conditionality are removed, there is a case to be made for leaving those on tax credit support out of Universal Credit altogether and continuing to use HMRC.

“The Committee is also deeply concerned that Jobcentre staff, those who actually have to deliver DWP policies, are over-stretched and under-resourced. There appears to be no realistic way that a supportive or person centred approach could be offered to everyone despite the best intentions of many employees. The Committee believes that the closing of local job centres has had a detrimental impact on communities. However, there could be opportunities to offer a more personalised, local employment support in communities by working closely with other agencies on the ground. The DWP must therefore review local access to jobcentres. 

“We acknowledge some much-needed changes were made last year to Universal Credit. However, it remains simply unacceptable that vulnerable claimants still must wait at least 5 weeks before getting benefits they are entitled to. The Committee is also keen for the significant damaging cuts made in the 2015 UK Budget to be reversed and the benefits freeze to be immediately lifted. We will be raising these issues and more with Alok Sharma MP, Minister of State for Employment, when he appears before us next month.”

Background

Full report can be found here.

Committee members Jeremy Balfour MSP and Michelle Ballantyne MSP dissented from some of this Committee’s conclusions.

This inquiry began in June with a remit to consider the potential impact of Universal Credit (UC) on in-work poverty in Scotland.

UC is the UK Government's social security payment for people of working age
either not in work, or in work but with a low income. It replaces six (legacy) benefits for working age people; income support, income-based jobseekers allowance, income-related employment and support allowance, housing benefit, child tax credit and working tax credits.

The Committee heard evidence from a wide range of stakeholders during this inquiry, visiting Jobcentre Plus and Social Security Scotland in Dundee, Dundee Foodbank, Taught by Muhammad and the Shore Youth Café who each provided insight in to their own personal experiences of UC and other issues associated with in-work poverty.

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