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Why Universal Credit needs to be scrapped

16 Apr 2018

Universal Credit is the policy of chaos. From reports that it has caused the rise in the use of food banks, with the Trussell Trust reporting a 30% increase in services in areas where Universal Credit is at its most advanced stages, to the widely-acknowledged five-week wait time for initial payments, the stats aren’t good. At one time, the Universal Credit helpline set up to assist those confused about the new policy charged callers anywhere from 30p-55p a minute a fee that the government has now scrapped. The endless list of problems in the initial rollout of Universal Credit has churned headline upon headline, but many fear there are much harsher effects to come.

On 18 April, Disabled People Against Cuts (DPAC) are protesting the policy in their National Day of Action to scrap Universal Credit. DPAC’s concern is that the policy has been made without thought being given to the specific groups that will be most affected by the changes. On the National Day of Action, DPAC plans to highlight this by enacting a real life crime scene in Parliament Square. This action seeks to hold a mirror up to the true damage that they believe is happening due to the rollout of the scheme.

“DPAC find it difficult to accept any possibility of meaningful reform of the policy”

Universal Credit is the Department for Work and Pension’s flagship welfare reform policy, created back in 2011 as a way of simplifying the existing system, and to “encourage people back into work”. This rhetoric promotes a harmful narrative that a significant amount of benefit claimants are able to work, but just not willing to – which is grossly untrue. In reality, over 85% of long-term claimants are not supposed to be looking for work because they are being assessed under Employment and Support Allowance (ESA), or are single parents. For DPAC, this rhetoric obscures the fact that many of the people they represent are simply unable to work. DPAC find it difficult to accept any possibility of meaningful reform of the policy, and are maintaining their position calling to scrap it altogether.

Under the watch of Iain Duncan Smith (the Secretary of State for Work and Pensions until 2016), six former benefits, including jobseekers allowance, ESA, child tax credit and income support, were combined into one single “simple” payment. The operative word here is simple, because the whole notion of the policy hinges on the idea that it would give clarity to the most vulnerable, whilst also helping and “encouraging people into work”. Universal Credit didn’t seem to face too many opponents in its conception either – it passed through the Commons with relatively little friction – but it is the implementation that has left many with a bitter aftertaste. Its rollout is proving anything but simple.

“No specific research has delved into the complex ways that disabled people will be affected by the new system”

A report earlier this year by the Office for Budget Responsibility (OBR) – an independent arbiter on these sorts of things – stated that Universal Credit would save the government around £1bn (a mere 2% of the total social security budget) compared to the old regime, by 2020. The OBR reported that it was too early to say whether Universal Credit would actually encourage more people into work, saying there was “insufficient evidence to judge”. Whilst the Institute for Government concluded that Universal Credit could “encourage people into work”, it also showed that the policy clearly wasn’t designed to adapt to the needs of specific groups. No specific research has delved into the complex ways that disabled people will be affected.

The Resolution Foundation think tank has a much harsher analysis: it states that Universal Credit will be £3 billion a year less generous than the tax credit system it replaces and as a result, it will leave working families an average of £625 a year worse off. Scope, a disability justice charity, estimates the direct financial loss of disabled people to be at around £395 a month, citing the removal of disability premiums as the major cause.

Much of the recent data around the effectiveness of the policy comes from the pilot schemes. The government has said that the majority of people claiming Universal Credit are “satisfied or very satisfied” and that the new system “is encouraging more people into work” than those on the previous benefits system. These assurances don’t address DPAC’s concerns because, as with most pilot schemes, the government tends to trial “non-complex” cases first. By this, they tend to mean men under 30 with no dependents. In addition, the government were using an analysis based on a mere 8% of all benefit claimants.

“The shift to digital management is the most significant change, as 30% of disabled claimants do not have internet access”

The specific problems disabled people have raised with Universal Credit go beyond some of the teething problems in the initial stages of the implementation. Speaking to DPAC, it is clear that their main concerns are about the way Universal Credit is managed and claimed. The shift to digital management is the most significant change, as 30% of disabled claimants do not have internet access, which makes submitting the first claim form a prohibitively difficult process. This is coupled with a change from the old system that requires claimants to update their circumstances every month online, which DPAC say poses a real logistical barrier to the process. The change has come too fast. For visually impaired people there are also specific issues surrounding the way the form is constructed. The crucial screen-readers many visually-impaired people rely on to translate web pages into an accessible format have been rendered incompatible with the current claim forms in a number of cases, in what DPAC again state further restricts disabled people from making a claim.

It’s not a surprise that minoritised groups are suspicious of this most recent big change to welfare provision. Minorities have long felt the brunt of policy changes and only last year, the Equality and Human Rights Commission (EHRC) released a document which reported that seven years of austerity had hit women and disabled people the hardest. The equalities watchdog estimated that by 2022, black households will face a 5% loss of income (more than double the loss for white households), families with a disabled adult will see a £2,500 reduction of income per year (£1,000 more than for non-disabled families) and lone parents would struggle with a 15% loss of income. DPAC are not alone in thinking policies like Universal Credit are solely about cutting public spending research by the Women’s Budget Group and The Runnymede Trust shows that the needs and experiences of those who live at the intersections of different oppressions are often overlooked.

DPAC are clear that, for them, Universal Credit is incapable of meaningful reform and that the only way forward is to scrap the policy altogether. A spokesperson from DPAC explained that the new policy has ignored their concerns and they believe it has been made without clear consideration of how accessible the changes are for disabled people. The new policy signals to them that the government has once again failed to envisage the diverse needs in the people who might be affected by their policy changes. This is why, for DPAC, their day of National Day of Action is so important it is a chance for the government to prove they can listen to the lived experiences of disabled people.