Council calls on government to halt Universal Credit rollout to fix “desperate impact” for vulnerable claimants

Published: Tuesday, 31st July 2018

Oxford City Council has written to the Department for Work and Pensions (DWP) calling for a halt to the rollout of Universal Credit due to its impact on vulnerable people.

On 23 July, full Council unanimously passed a motion highlighting the “desperate impact” of Universal Credit on vulnerable claimants, and asking the government to stop the rollout of the new benefit while it carries out an immediate review of claimants’ support needs.

In their letter to DWP Secretary of State Esther McVey, councillors Susan Brown and Marie Tidball also call on the government to reduce administrative burdens and ensure that councils are adequately funded to provide support for Universal Credit claimants.

The rollout of Universal Credit’s digital service to couples and families making new benefit claims began in Oxford last October. On 18 May, the council and Oxford & District Action on Child Poverty held a stakeholder meeting with advice centres, housing and specialist support providers to discuss the early impact of Universal Credit in the city.

Universal Credit is intended to replicate a single monthly salary payment and simplify the existing benefit system.   

Fran Bennett, member of Oxford & District Action on Child Poverty, said: “Simplifying the benefit system and providing better in-work incentives are hard to disagree with in principle, but Universal Credit doesn’t recognise the reality of how many people on low incomes work and manage their money. Universal Credit’s single monthly payment is supposed to be like work, but this is irrelevant for anyone who is used to getting their wages or benefits every week or at other intervals – this can create havoc with household finances.

“In practice, Universal Credit’s ‘once a month’ approach to assessing entitlement means inflexibility rather than simplicity – for example, if you need to claim for less than a month, you get nothing. A series of cuts to allowances and premiums also means that overall Universal Credit will now be less generous than the previous benefits and tax credits system.”

Based on their experience of supporting Universal Credit claimants, advice and support providers identified a number of specific difficulties that have led to payment delays and hardship. 

Changes to rules giving the DWP consent to disclose information mean that it takes advice centres four times longer to help people with Universal Credit issues compared to other benefits.

Other issues reported included inadequate home visiting arrangements for disabled people who were unable to attend appointments or use digital services – leading to delays in processing their claims, hardship and social isolation. Housing and support providers said that there was not enough support for people with mental health needs, for those who did not have English as a first language, or who lacked the digital or literacy skills to make and maintain an online claim.  

Support services also reported that some young people in education had difficulty in claiming Universal Credit – even when they were eligible – and that this particularly affected people in care and those with specialist educational needs and disabilities (SEND). People unable to be discharged from hospital because of an inability to claim Universal Credit and prisoners who had no digital access were also disadvantaged by the new benefit.

Councillor Marie Tidball, Board Member for Supporting Local Communities, said: “Last month, the National Audit Office delivered a damning verdict on Universal Credit which reflects our experience in Oxford. Universal Credit is causing dire problems for groups of vulnerable people as they move onto it.

“Council voted unanimously for the government to halt Universal Credit rollout for while it reviews claimants’ support needs – the DWP urgently needs to listen to the experience of Universal Credit claimants and support providers, to collect proper data on the frequently desperate impact Universal Credit is having, and to fix these problems.

“There is simply not enough support for claimants with mental health needs, for people whose first language isn’t English, or who lack digital or literacy skills. And the way Universal Credit is designed creates particular issues for young people in care or with SEND, people who can’t leave hospital because they can’t claim, and those who can’t access digital services.

“Advice services are already being stretched as dealing with issues for Universal Credit claimants takes four times longer than for people on other benefits. This is completely unacceptable.” 

Universal Credit has also meant increased workloads for the council.

The Springboard service provides support for Universal Credit claimants to make and maintain their online claim, and also to manage their single monthly payment. Since October, Springboard has received 419 referrals (including self-referrals) – 149 for digital support, 249 for financial support, and 21 for digital and financial support. In order to alleviate hardship for claimants waiting for their first payment, the Springboard service has made 26 payments totalling £1,165 from the council’s emergency fund and issued 49 food bank vouchers.

Monthly DWP award notifications must be processed by the council’s Benefits service, even where there is no direct impact on the service because the council is not paying any benefit to Universal Credit claimants.

From the end of March to the end of May, there was a 38 per cent increase in council tenants on Universal Credit (from 312 to 431). At the same time, there was a 47 per cent increase in Universal Credit tenants in arrears (from 225 to 330), and a 50 per cent increase in the amount of arrears owed by these tenants (from £95,340 to £142,914).

While part of the increase in arrears is caused by the fact that Universal Credit housing costs are paid less frequently than housing benefit, rising rent arrears means more work for the Incomes team in contacting tenants and making arrangements for their rent to be paid as they move onto Universal Credit.

Councillor Susan Brown, Leader of Oxford City Council, said: “Our Benefits service has seen a substantial increase in workload since the rollout of Universal Credit full service began in October. Unfortunately, this frequently includes award notifications that are blank or duplicates, that should have gone to other local authorities, or that have no direct impact because we are not paying any benefit to the claimant ourselves.

“Processing these kinds of notice is pointless and very costly for Oxford City Council and our council tax payers. We already have six full time members of staff dealing with these notices, but the funding provided by the DWP for this work does not even cover the costs of one member of staff. The DWP could easily fix this problem by funding our software suppliers to automate the administration of Universal Credit notices – as they did with similar notifications for housing benefit.

“Our Springboard service does an excellent job supporting claimants to deal with digital and financial issues around their Universal Credit claims, but DWP funding falls woefully short of the cost of providing effective support.”