The Work and Pensions Committee says the Government "must not proceed" with moving existing benefit claimants onto Universal Credit until "a new, flexible, discretionary approach to debt management, drawing on best practice in the retail sector" is in place - and working. The Department is currently planning to start moving claimants over from mid-2019.
The five-week wait built into Universal Credit risks causing or compounding debt problems, and the Advance Payments introduced to tide claimants over are themselves a further debt. Persistent debt can prevent claimants from finding and staying in work, and the extra costs and pressures of debt can quickly spiral out of control. DWP's aggressive approach to collecting debts owed by claimants to Government and third parties can compound matters further, leaving claimants "swimming against a tide of unmanageable repayments" which "pile debt upon debt, trapping people in a downward spiral of debt and hardship". DWP "must not proceed with managed migration until it has assessed the contribution that the five week wait makes to claimant debt" and reformed its own debt collection practices.
"Woefully inadequate" support
Universal Support was supposed to offer claimants support making their initial Universal Credit claim, and then ongoing support adjusting to the challenges of the new benefit. But the Committee says the “gap between the Department’s original vision for Universal Support and the meagre offer it now funds is vast”. DWP will currently only fund a single two-hour session of Personal Budgeting and Digital Support, at the start of a Universal Credit claim. Its own research shows that for many claimants this is woefully inadequate.
The efficiency savings claimed for Universal Credit - which the NAO has already put in doubt - depend on claimants using its various digital systems successfully throughout their claim. Some will find this easy but others will require substantial, ongoing support. Others will need ongoing help with budgeting under the new system. The Committee says the Department must urgently lift restrictions on the timing of support and be prepared to work with Universal Support providers to fund more extensive help for claimants who need it.
Critical decision for Government
The Committee says Government "must verify that Universal Support is delivering what people need, when they need it, before it proceeds with managed migration". It should set clear key performance indicators in conjunction with its new Universal Support delivery partner Citizens' Advice and other support organisations, and publish regular updates on whether they're being met. The targets should go beyond take-up of Universal Support and focus instead on claimant outcomes like debt management and digital skills.
The Committee says Government now faces a critical decision: overhaul Universal Support or put the whole Universal Credit project, as well as claimants' well-being, at risk. DWP should not proceed with transferring claimants from legacy benefits to Universal Credit unless and until the new targets are being met.
Rt Hon Frank Field MP, Chair of the Committee, said:
"Universal Support is not 'universal', and it hasn’t been offering much in the way of support. The plan now is to offer budgeting advice, but not debt advice, to people who don’t have a budget left after their debt payments.
DWP must not push one more claimant onto Universal Credit until it can show that it will not push them over the edge. To ensure a truly universal system of support is delivered, the DWP should only move claimants onto Universal Credit when Citizens Advice and other delivery partners have the capacity to offer tailored support to every person making a claim for the benefit."