Universal credit rollout delayed yet again

By Michael Buchanan
BBC News

Media caption, Holly Sargent has had to sell her possessions because of problems receiving universal credit

Ministers have bowed to pressure and are planning to further delay the rollout of the flagship welfare reform, universal credit.

The system - which will merge six benefits into one payment - has been beset with problems.

Leaked documents seen by the BBC reveal plans to spend hundreds of millions of pounds to prevent claimants suffering hardship as they move onto it.

The government said it always intended to introduce the benefit slowly.

Responding to an urgent question in the House of Commons, Employment Minister Alok Sharma declined to comment on the leaked documents, and said the government would publish plans for the next stage of universal credit "in due course".

He added that, by December 2018, universal credit would be available in all job centres for new benefits claimants.

The switchover for existing benefit claimants to universal credit will be "slow and measured" and start in 2019 with "no more than 10,000 people" to ensure the system is working.

MPs - including Labour's shadow work and pensions secretary Margaret Greenwood - called for a halt in the roll-out of the reform.

Work and Pensions Secretary Esther McVey told the Commons on Monday that she had been discussing details of universal credit with the chancellor - and details would be revealed in the Budget later this month.

The system was supposed to be up and running by April 2017, but is now not expected to be fully operational until December 2023.

The Local Government Association welcomed the delay, adding that some of the extra spending should be given to councils so they can provide a safety net to people "struggling to cope".

What has the BBC learned?

It appears that big changes are going to be made in an attempt to reduce the negative impact on people being moved to universal credit.

First off, plans have been drawn up to continue paying income support, employment and support allowance, and jobseeker's allowance for two weeks after a claim for universal credit has been made.

A similar policy for housing benefit was introduced in last year's Budget, following evidence that some claimants were going into rent arrears.

Secondly, there are to be changes to how deductions from a recipient's payment can be made.

Claimants can ask for an advance to help them get by while waiting for their first proper universal credit payment - later the government takes deductions from their regular monthly income as pay back.

Under the revised plans, the maximum amount that can be deducted will be reduced from 40% to 30% of their total award each month.

Thirdly, more help is set to be given to the self-employed, after warnings they could be left in serious financial trouble because of incorrect assumptions by the Department for Work and Pensions about their earnings.

However, the documents highlight that the design of universal credit has already ruled out some concessions.

Allowing claimants to receive child tax credits for a fortnight after they apply for the new benefit - which Ms McVey had asked officials to consider - has been ruled out.

It would have needed two different systems - the DWP's and HMRC's - to work together to deliver the change, potentially creating additional problems.

"Not having a run-on for child tax credit will be presented as unfavourable treatment of lone parents, who many argue are the most in need of protection of the effects of the move to UC," the documents say.

The documents seen by the BBC also make clear that the proposed concessions might not actually be achievable.

An extract says: "We can currently offer no assurance that ultimately these proposals will prove to be deliverable, can survive legal challenges where they can be delivered, and do not invite new political criticism by generating new policy issues."

How does all this affect the timescale?

Media caption, Sir John Major warns the Conservatives over universal credit

The government was intending to begin moving almost four million people onto universal credit from January 2019, initially in small batches. Larger scale movements were due to start next July.

Now though, initial testing has been pushed back to next summer, and large-scale movement won't begin until November 2020 at the earliest.

The leaked papers predict that overall, the latest delay will add an additional nine months to the final deadline for full implementation.

What is universal credit?

The policy was first announced under the coalition government in 2010.

It's supposed to simplify benefits for working-age people, replacing income support, jobseeker's allowance, employment and support allowance, housing benefit, child tax credit, and working tax credit.

What is the problem with it?

Pressure has been mounting on the government for weeks to either delay or halt the next stage of the reform.

Much criticism has centred on the time it takes for people applying for universal credit to receive their first payment - 35 days - with some claimants left struggling to pay their bills in that period.

On Monday, independent MP Frank Field said the rollout of the system in his constituency of Birkenhead had driven some female claimants to sex work.

One Universal Credit recipient, Naomi Krykawiak, told the BBC's Victoria Derbyshire programme she first applied whilst pregnant, and had to wait around six weeks for the benefit to be accepted.

"It did definitely mean using food banks... it's something I had to do around eight times before the benefit was accepted."

Media caption, Esther McVey on universal credit: Some will be worse off

The Church of England said the fallout from the new benefit system was seen at its food banks across the country. More than 30 Anglican bishops have backed a campaign calling for the government to "fix" universal credit.

Anger built further last week when Ms McVey said that "some people will be worse off" under the new system, amid claims 3.2 million households will lose more than £2,000 year.

The Times newspaper suggested she had told a cabinet meeting some families could lose up to £200 a month.

Mrs McVey insisted, though, that the most vulnerable would be protected.

What does the government say?

A Department for Work and Pensions statement said it was taking a "a slow and measured approach to managed migration [of the system]" and wanted "to ensure the system is working well for claimants and to make any necessary adaptations as we go".

"We will publish full plans for the next stage of universal credit rollout, including managed migration, in due course. Anything before that point is speculation and we do not comment on leaks."

Labour said the government needed to provide urgent answers about what was going on and what action would be taken "to tackle the many flaws in the system".

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