Government must set - and meet - next phase Universal Credit tests

Nov 23 2018

Government must set - and meet - next phase Universal Credit tests

The Work and Pensions Committee says the Government must delay the vote on the next phase of Universal Credit until both its own Social Security Advisory Committee (SSAC) and Parliament have had a chance to assess the Government's plans.

The Committee concluded that despite changes announced in last month's budget, "major areas of concern" about the Government's plans remain.

The Department for Work and Pensions (DWP/the Department) is due to start transferring claimants to Universal Credit from the existing benefits it will replace in mid-2019. The people going through this process, which DWP refers to as “managed migration”, will include some of the most vulnerable people in society. It is impossible to overstate the importance of getting it right: for claimants and for the success of Universal Credit itself. Getting the process wrong could plunge claimants into poverty and even leave them destitute.

In November 2018 the Department laid before Parliament revised draft Regulations on managed migration. This followed the publication of the original draft Regulations, and a subsequent consultation by the Department’s Social Security Advisory Committee (SSAC), over summer 2018. The draft Regulations that are currently before the House are a significant improvement on the Government’s original proposals. We warmly welcome the fact that the Government has listened to concerns and acted on some of them.

Major areas of concern about the Regulations remain. And on the Government’s indicative timetable there will be no opportunity for expert scrutiny of those regulations before they become law. The Government should not ask the House to vote on the Regulations until the Social Security Advisory Committee has had a chance to scrutinise and report on the revised Regulations.

It is the Government’s policy to transfer claimants to Universal Credit. It is only right that the Government, and not vulnerable claimants, bears the risk of that decision. The current migration process requires claimants to make a new claim for Universal Credit, rather than being transferred automatically from the existing system. This places risk squarely on the claimant. At worst, some claimants might fail to apply and drop out of the benefit system—potentially their only source of income—altogether.

The Department has resisted suggestions that it transfer claimants directly or pre-populate their Universal Credit forms, citing concerns about the quality of its data. We are not persuaded that this creates an insurmountable barrier, nor that it has exhausted all possible avenues before deciding to require new claims. It should proceed immediately with an analysis of claimant groups that will migrate to Universal Credit with a view to identifying circumstances in which it does not need to require people to make a new claim. This analysis should be published.

Additional payments of two weeks of Housing Benefit, known as a “run-on”, are already available to migrating claimants. The Department’s 2018 Budget announcement that it will extend run-on payments to income-related JSA and ESA is hugely welcome. But it does not cover all benefits (tax credit claimants will not receive any run-ons), and it supports claimants for only two weeks of their minimum five week wait for Universal Credit. Moreover, the new run-ons will not come into force until July 2020, when managed migration is scheduled to accelerate. The run-ons are a vital part of the Department’s strategy for mitigating the risks of Universal Credit and the effect of the five week wait. But it will go into full-scale migration with only a largely theoretical understanding of how helpful they are in practice. The Department should start the run-ons from the beginning of testing of managed migration. It should also extend them further to cover all legacy benefits that Universal Credit replaces.

Claimants of existing benefits moving to Universal Credit via what is called managed migration are eligible for transitional protection. The Department has made a commitment that no one will receive less in UC at the outset than they would have in the previous system—assuming their circumstances remain the same. The SSAC has made modest, sensible proposals for changes to the conditions that would trigger a loss of transitional protection. These would protect groups including domestic violence survivors, and severely disabled people whose partners have died or moved to residential care. We cannot believe that the Department means to penalise these groups. The Government claims to have accepted SSAC’s recommendations on changes to transitional protection. In fact it has simply agreed to seek further evidence. It has announced no policy changes, and the Regulations it will ask the House to approve would set in law the circumstances in which transitional protection will cease. It must urgently revisit this decision.

We, the National Audit Office and the Social Security Advisory Committee have all called on the Department to set tests for readiness that must be met before managed migration begins. It continues to insist that it will not do so until it has completed its migration pilot in 2020. This is simply not good enough: it must commit to setting the tests it will meet before the pilot begins. The tests, and an analysis of whether they have been met, should be published before managed migration moves to scale in 2020.

The Government has listened to the grave concerns expressed by individuals, charities and the Social Security Advisory Committee about its plans for moving people claiming existing benefits onto Universal Credit. But we are not yet persuaded that the improvements it has made to its Regulations go far enough to safeguard vulnerable claimants and to ensure a smooth transition to Universal Credit. We are calling for the Government to delay the decision on these Regulations to allow for further scrutiny.