One of the recurring themes of the government’s approach to welfare reform is that of the desirability of people ‘taking responsibility’ for their own lives, especially those in receipt of government funds (except pensioners - they’re off the hook). A major selling-point of its flagship, Universal Credit is that it ‘smooths’ the transition to work by replicating more closely the payment behaviours of salaried employment (monthly payments, claimants pay landlords directly unless they opt-out and so on).
However, responsibility cuts both ways: just as an employee needs to make sure they turn up on time and does the work expected of them, the employer needs to make sure that the workplace is safe, and that staff are paid the right amount for the work they do. Contracts have two parties, not just one.
Unfortunately, both in its contract with individual claimants and with the wider public (both claimants and not), the DWP (and the government) is significantly failing to honour its obligations, in ways that have major, negative implications for those at the sharp end of welfare reform: those paid so little that their wages and/or rent have to be topped up by welfare payments. The latest iteration of this is arguably the greatest so far.
Commendably, the government set up the Major Projects Authority (MPA) in 2010, to act as a ‘super-auditor’ of large government initiatives whilst they were still being developed (remit here: https://engage.cabinetoffice.gov.uk/major-projects-authority/chapter-2-the-major-projects-authority-remit/). Its assessments are delivered as a traffic light system (RAG): red indicates a project is functionally unachievable unless major remedial action takes place, green is full steam-ahead. Projects can and do move across the spectrum as they develop.
The previous assessment of Universal Credit was ‘amber-red’: the most recent, however has seen it removed from the RAG spectrum altogether and given the designation of ‘reset’, a fact revealed via a terse footnote (p.12, here: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/315601/MPA_Annual_Report_2013-14_final.pdf_ ) Which would be less worrying if we knew the criteria used to apply the ‘reset’ - the Institute for Government is puzzled, and the Cabinet Office isn’t telling. As things stand, given that the ‘whole life’ costs of Universal Credit have also been reset, we no longer know its projected budget - and a major benefit was meant to be Universal Credit’s capacity to reduce costs. To return to the analogy of the employer/employee relationship it’s akin to an employee shrugging when asked when an overdue project will be ready: or an employer replying ‘Not my problem’ at an unpaid wage.
The shrug is the government’s response to the delivery issues with Universal Credit. The indifference to non-payment has emerged via landlords involved in the Universal Credit roll out, in the most literal sense possible: a housing association has had to employ two full-time staff to chase arrears caused by problems with the payment software. Outsourcing for efficiency is one way to describe it. Those directly affected have used more demotic language, I imagine.
However, it gets worse. At present, tax credits are under HMRC’s control, but under Universal Credit, tax credits will be rolled into the single payment. Tax credits have always been problematic, as they rely on people telling HMRC about changes in their income (which disproportionately affects those on variable hours, for obvious reasons), but even allowing for this HMRC haven’t always been a model of good service delivery. One consequence of this has been over-payments to claimants.
Enter, outrageously, debt collectors. Quite why HMRC thinks it necessary to employ them when it could simply claw back any over-payment from future tax credit awards is beyond me. One theory is that it is part of a drive to minimise the tax credit bill, at a time of the more-or-less stagnant real wages tax credits effectively subsidise. But whatever the reasons, sending in debt collectors over an over-payment for which the debtor in many cases will not even be responsible, presents a very worrying precedent.
We know that IDS is desperate to introduce Universal Credit, come what may; it’s arguably the reason for his continuing presence in Cabinet. We know that the Universal Credit roll out is revealing problems with the software, and we know it’s having knock-on effects with rental payments to landlords, and that people’s tenancies have been jeopardised as a result. We know that self-reporting of changes to wages can cause problems with tax credits and now we know that HMRC will send in debt collectors, even if the claimants are not at fault.
Which generates the following scenario: Universal Credit software fails, generating an overpayment, and/or an incorrect rental payment. At the very least, this will lead to an increase is stress, and an increased risk of poverty for families already on low incomes. It is not unthinkable that this chain of events, given what we’ve seen already, will result in the loss of their home and/or possessions, even if it’s only in the most ‘extreme’ cases. As a sidebar, what this will do to any household participating in the Troubled Families programme, in which DWP is also involved is anyone’s guess. My guess is will certainly not help, and will probably hinder.
I have said repeatedly that I support the idea of Universal Credit in theory; the existing multiple taper rates make calculating one’s entitlement/ contribution a labyrinthine task. But a reform of this nature has got to be better, simpler, more responsive and accurate if it is going to succeed in its stated objectives and right now it fails on all counts: never mind the anecdotes, feel the MPA report.
It is simply unacceptable that the government is even considering effectively punishing the most financially vulnerable for mistakes not their own - and yet, pulling the strands together, it seems all-too plausible that it will. If the government wants people to take responsibility for their own lives, it should start by looking in the mirror held up by the MPA, the Work and Pensions and Public Accounts Committees and the problems identified by those taking part in any Universal Credit trials - and act on what it sees there.