Work and Pensions Committee - Universal Credit implementation: meeting the needs of vulnerable claimantsWritten evidence submitted by Avanta

Avanta Welcomes the opportunity to comment on the proposals outlined through the Work and Pensions Select Committee inquiry into progress towards implementation of Universal Credit. Implementing measures that increase work incentives combined with simplifying the benefits system are to be applauded. Helping people to fulfil their potential should be a fundamental policy objective for the Government. We believe that helping people with are able to get back in to sustainable employment can have a positive impact on their health.

This represents an opportunity to elevate people out of the poverty trap and make it more financially rewarding to enter employment. Greater flexibility around earnings disregards should make it easier for people to get back in to work although greater detail is required about the level of disregards and the impact this will have on specific groups such as lone parents and people with a disability.

Outlined below are our thoughts on the specific questions outlined in the terms of reference.

The Committee is particularly interested in receiving evidence on the following specific areas:

The proposed arrangements for claims and payments and the provision of support and advice for claimants, including the presumption of a predominantly online, self-service claims process; monthly payment to one person in the household; and arrangements for providing telephone and face to face support and independent advice for claimants who need it

Changes in benefit entitlement and eligibility will have a profound effect on the most vulnerable members of society. Effectively managing the migration of different benefit systems in to the new Universal Credit will be essential. The complex nature of benefit entitlement means that the hardest to help and most vulnerable customers will require the necessary support and assistance needs to be put in place so that they are able to fully articulate their disability and their own personal circumstances enabling them to receive the full benefit entitlement based upon their own conditions.

Research and evidence from the Work Capability Assessment (WCA) has highlighted the need for a comprehensive first time right assessment to be taken from the outset of each case. A full assessment based upon measuring capability as opposed to disability can help people understand how they can fulfil their potential. Evidence from the Harrington Review needs to be incorporated in to the initial assessment process so that people are not misdiagnosed and are then put in to a position where a review of their case needs to be undertaken. Avanta believe that participating in work based activity can be extremely beneficial in addressing problems such as mental health. The world of work can help to instil self worth and confidence in addition to elevating people out of the poverty trap.

Local Authorities and the voluntary sector can play a pivotal role in helping people make the transition on to the new benefit and providing them with the most up to date advice and guidance with regards to the application process. We would welcome a more in depth understanding of Government proposals for this so that customers can be sign posted to the most appropriate agency.

The proposed arrangements for the “claimant commitment”, sanctions and hardship payments

Avanta believe that promoting the world of work and helping people back in to the labour market is an important component in developing a “social contract” between the state and the customer. This helps to define the roles and responsibilities of the state and customer and define the underlying principals of their benefit entitlement. We believe that conditionality should be based upon the individual’s capabilities to actively participate in paid work and contribute to wider society. Through the delivery of mandated programmes for over 30 years including mainstream programmes such as New Deal, Pathways to Work and the Work Programme we believe sanctions should only be pursued or applied as a last resort. Our experience has shown that adopting a customer centred approach underpinned by their capability and needs is the best way to develop specifically tailored support and interventions that empower customers to address their barriers to employment.

Ensuring people comply with their roles and responsibilities outlined through the Universal Credit will be crucial if it is to succeed. However, using sanctions before gaining a thorough understanding and diagnosis of their own personal barriers and circumstances can stop people meaningfully engaging and participating in activities that enable them to progress back in to the labour market. Through our experience of delivering mandatory Programmes through DWP ranging from New Deal to the Work Programme penalising people through sanctions can be detrimental in the long term and not address underlying problems that could be associated with conditions such as mental health. In addition, sanctioning and hardship payments can also be counterproductive in gaining the long term trust of people and could have repercussions on the welfare of family members including children. However, as a last resort, sanctioning can be used as a tool to gain the persons compliance and in some cases undercover potential fraudulent claims.

Changes in the income entitlement of disabled people under Universal Credit, including those who may receive less income under Universal Credit than at present

As previously stated it is essential that customers are provided with a thorough diagnosis that defines what their condition is ensuring that they are then awarded the correct benefit entitlement. Through the current benefit system their is a number of different premium levels based upon their medical condition. More information needs to be made available about the impact of this on people in receipt of these premiums. Customers not awarded the equivalent premium through the Universal Credit need to have in place a package of support and help that can enables them to make the transition to the new benefit.

Avanta believe that changes within the income entitlement of disabled people under the Universal Credit should be managed very carefully. Changes in income entitlement and eligibility will have a profound impact on the customer’s personal economic and social impact circumstances. Successfully managing this transition through supported interventions will be crucial.

The level of the earnings disregards

Avanta welcomes earning disregards that incentivise people to enter the labour market. The current benefit system inhibits the ability of some customer groups such as lone parents to successfully enter employment. Introducing a lower “taper” level which encourages people to enter employment would help the most vulnerable people in society. However, the principals underpinning the Universal Credit need to reward people that want to enter the world of work. The initial report conducted by the Centre for Social Justice (Dynamic Benefits, 2010) recommended that a taper rate of 55% as opposed to 65% should be deployed and we would suggest that the proposed “taper level” of 55% should be reviewed in order to ensure that it has been set at an optimum rate that maximises the chances of people entering long term employment and minimises potential for fallout in the long term.

Successive Government provision that is designed to help mandated customers back in to employment has been hampered due to a lack of flexibility within the benefits system that inhibits their ability to enter the labour market. We welcome the introduction of a cumulative disregard based upon the amount of hours someone works. Housing disregards also need to be carefully considered. Our experience shows rental costs are one of the primary barriers to entering sustainable employment. Local disregards should reflect regional variations in rents which are significantly different in Newcastle and London for example. Disregards should also be considered for more marginalised or disenfranchised groups such as Lone Parent, low income families or people with a disability. This will provide them with a greater chance of competing within local labour markets. Childcare costs also need to be factored so that Lone Parents are able to access flexible childcare that reflects the working practices of different sector.

Eligibility for and operation of passported benefits

More research needs to be conducted in order to understand the full implications of loosing passport benefits and the set thresholds that will trigger this. We welcome that some passport benefits will be phased out to limit the impact on the household but a number of groups could still potentially loose out. For example, people with a disability could lose their eligibility to free prescriptions but still be entitled to free school meals. Addressing these potential anomalies will be fundamental in developing the most appropriate customised support for each individual. At a local level, there are a number of passport benefits that help the most disenfranchised in society such as a discounted gym membership. Withdrawing this from someone experiencing mental health problems could be detrimental to their long term rehabilitation.

Impact monitoring

What the DWP’s priorities should be for monitoring the impact of the transition to Universal Credit.

DWP should monitor the impact of the Universal Credit through a number of mechanisms. The key indicator will be the number of customers that successfully enter the labour market and the cost savings that DWP directly recoverable as a result. This would build on principals developed by Lord Freud through the “DEL/AME” which is based upon the principals of “Invest to Save”

In addition, the views and voices of customers and the Employment Related Services Community needs to be incorporated so that agreed changes can be implemented at an early stage.

17 August 2012

Prepared 21st November 2012