Anvar Sarygulov is the Head of Research at Bright Blue.
In the 2010s, the Conservatives introduced Universal Credit, a landmark change to our social security system. This ambitious reform took an axe to the sprawling system of six working-aged benefits, unifying them into a single and digital system.
Though its rollout has been beset by problems, the strength of Universal Credit’s infrastructure was at full force during the pandemic, when the system managed to process more than two million applications in the space of two months without much issue.
But the reforming zeal of the early 2010s is now gone from the Conservative Government, and it is left with little ambition for what comes once Universal Credit is fully implemented.
In the last few years, social security policy has been largely reactive, simply injecting more cash to help newly unemployed during the pandemic, and to help those on low incomes weather the rising cost of living. These reactive interventions betray structural weaknesses within our social security, and require more than just tinkering to fix.
With the economic headwinds continuing, and throwing more people into our safety net, it is vital to consider how we can change working-aged benefits to make them work better.
Bright Blue has spent two years, advised by a cross-party, cross-sectoral commission, doing exactly this, identifying policies which will have support from across the political spectrum and the public to make our social security stronger.
We propose three policies to fix three structural weaknesses: inadequacy, inaccessibility and unfairness.
First, inadequacy. The Government has been forced to splash the cash on top-ups and new payments over the last three years because the baseline level of support is inadequate in helping people avoid destitution. Even with additional support, some are struggling to pay their bills.
It is time to reform how we decide benefit levels, and give power to the arms-length Social Security Advisory Committee to identify and advise the Government on a ‘minimum living’ income, similar to how the Low Pay Commission advises what the minimum wage should be.
This benchmark should be used to recommend levels of benefits that will ensure people have enough money to simply meet the costs of living: their food, their rent and their heating. It will mitigate the need for the state to rapidly develop new ways of giving money to people who are unable to afford the essentials needed for survival.
Second, inaccessibility. Much of the UK’s social security system remains underutilised. For example, more than 150,000 families with young children are missing out on the Healthy Start food vouchers, despite the fact that the Government is already aware of their eligibility.
We need to fully utilise the digital capabilities of Universal Credit and create a centralised Social Security Digital Platform, which should act as a single referral, application, and processing platform for all centrally- and locally-administered benefits available to those on low incomes.
Making additional benefits and grants, usually administered at a local level, easier to access will reduce hardship and ensure people have access to the support they need and deserve.
Third, unfairness. The social security system provides particularly ungenerous support for those who are newly unemployed.
Unlike most developed nations, where people who have previously made contributions receive a higher value of unemployment benefit for the first few months to help them quickly get back on their feet, our system offers the same level of support to all, making any job loss much more precarious than elsewhere.
To make the system fairer, the Government should create a new, higher-level and time-limited Contribution Element in Universal Credit, which is given to those who have become unemployed and who have previously paid a new additional, and voluntary, National Insurance supplement, which will fund the new element.
Government should rediscover its appetite for meaningful reform and build on the success of Universal Credit. Changing how benefit levels are set, making it easier to access them, and introducing contributory elements to the system will change the system to be more adequate, accessible and fair without breaking the bank.