Anvar Sarygulov is a Researcher at Bright Blue and co-author of ‘Helping hand? Improving Universal Credit’.
Universal Credit has become a frequent guest of the nation’s front pages and headlines. A reform that once had cross-party consensus, it has been beset by delays, amendments and court challenges. There is no shortage of horror stories and bad experiences that paint a grim picture of the new welfare system.
Bright Blue’s new report, Helping hand? Improving Universal Credit, suggests a more complex reality. Based on forty in-depth interviews with a broadly representative sample of current claimants, our research finds that most claimants are in fact adapting to and coping with key and unique design elements of Universal Credit.
They are happy with the simpler system, where they receive a single benefit payment instead of many and where they only have to interact with one government department. They particularly rate the advice and support they receive from work coaches.
But things still do go wrong, and they go wrong far too often. Our research underscores that a significant minority of claimants are not served well by key design elements of this new system, especially older people, the long-term unemployed, the self-employed, and people with physical and mental health problems.
By the end of 2023, approximately seven million households will be receiving Universal Credit. At the current rate of dissatisfaction, hundreds and thousands of households will be struggling on Universal Credit. The Government must do better.
First, there is widespread struggle with the initial waiting period of at least five weeks for the first Universal Credit award payment. Very few low-income households are able to cope for such a long time on their own. Friends and family, food banks, and payday loan firms like Gday Loans are frequent sources of assistance. Most of our interviewees had taken out ‘advance payments’ to cover this period, which are offered by the Department for Work and Pensions (DWP) and repaid through future UC awards. Too often, debt problems and rent arrears develop in this initial waiting period that cause persistent financial difficulties.
We recommend that the Government offer all claimants an upfront ‘helping hand’ payment when they first start on Universal Credit, which would be equivalent to one week of their monthly UC award payment.
Unlike the existing system of advance payments, this would not be repayable. This could alleviate the financial impact of the delay for the initial award payment, improve take-up of Universal Credit, generate goodwill when a claimant first accesses Universal Credit, and improve impressions of Universal Credit during the current, critical roll-out period.
Second, evidence from our interviews suggests that award payments, especially the first payment, are not being paid on time due to administrative errors. Worryingly, roughly a third of our interviewees did not actually receive their initial UC award payment on time. Considering the already precarious financial situation of many claimants, even minor delays by DWP can easily create severe difficulties.
When an individual starts claiming Universal Credit, they have to agree to a ‘claimant commitment’, which states their obligations. If claimants fail to fulfil their obligations, they face consequences in the form of sanctions.
Hence, we recommend that the ‘claimant commitment’ should also include the obligations of DWP, especially on payment timeliness, and a clear path to financial compensation for claimants when DWP fails to meet them. By being explicit about DWP’s responsibilities and consequences, the system will be underpinned by a principal of reciprocity.
Finally, it is vital that the generally positive feedback claimants are giving about work coaches is sustained. As of March 2018, work coaches had an average caseload of 85 claimants. By 2024-25, the National Audit Office has forecast this will increase dramatically to 373. Such a dramatic expansion in caseload risks jeopardising the generally positive relationships which have characterised claimants’ experiences of Universal Credit to date and, ultimately, the success of Universal Credit in improving employment rates. We therefore recommend capping the number of Universal Credit claimants a work coach can be assigned.
Nonetheless, many people with physical and mental health problems report receiving substandard support from their work coaches. As of July 2018, there were 458 full-time-equivalent disability advisers across 637 Jobcentre Plus’s. The Government should ensure that there is a disability and mental health specialist employment adviser in every Jobcentre Plus. These specialists can provide training and guidance to work coaches to ensure that they approach individuals with physical and mental health problems correctly.
To the Government’s credit, it has been listening. In the last few years, it has reduced the initial waiting period from at least six weeks to five, reduced the overall Universal Credit taper rate, increased existing work allowances, and introduced run-on payments of existing benefits for all people transitioning to Universal Credit.
However, too many claimants are struggling with key design elements of Universal Credit. This new welfare system still can and should be improved.