Work and Pensions Committee - Universal Credit implementation: meeting the needs of vulnerable claimantsWritten evidence submitted by the Public and Commercial Services Union

1. The Public and Commercial Services Union (PCS) is the largest trade union in the civil service with around 270,000 members.

2. PCS is also the biggest union in both departments involved in the delivery of universal credit; the Department for Work and Pensions (DWP) and Her Majesty’s Revenue and Customs (HMRC) with around 80,000 members in DWP and around 55,000 in HMRC. PCS can therefore give evidence from the perspective of those who administer the benefits.

3. PCS has been involved in consultations around universal credit and had a number of concerns about both the underlying principle of universal credit as well as the way it is being implemented.

4. PCS is opposed to conditionality on benefits and believes this will add further punitive conditionality.

5. PCS welcomes this timely inquiry and would be happy to provide a witness to give oral evidence to the select committee.

PCS Concerns

Online claiming and further atomisation

6. The government has a stated aim that 80% of universal credit claims be made online. This is similar to government aims for 85% of employers to access Criminal Record Bureau checks online, however the anticipated number was not met and 80% of claims remained written, causing huge delays in the application process. This problem is likely to be significantly exacerbated by the profile of many welfare recipients. PCS believes online claiming will make it more difficult for the most vulnerable people to claim benefits. Despite government claims that a sufficient number of people have access to the internet, the reality is that those on low incomes (often those who claim benefits) are less likely to have access. The 2009 Digital Britain report found that “over 15 million adults in the UK still do not use the internet”—these will be disproportionately from the groups who will be claiming universal credit. A substantial number of those who do have internet access many will have it through a mobile phone, and therefore do not have access that allows them to upload documents. Therefore we believe that the numbers are over ambitious to say the least.

7. PCS believes that an increased reliance on online claiming would have a disproportionate affect on disabled people and those with mental health conditions. Many have literacy problems and for them a complex online form would be a barrier to claiming benefits. As often people with these problems are more likely to need to claim benefits, especially following the inclusion of Employment Support Allowance (ESA) in universal credit from October 2013, it seems clear the 80% target is unrealistic. This problem would also affect those for whom English is a second language. Citizens Advice has reported that £16 billion in benefits and tax credits remain unclaimed each year. This proposed system has the potential to increase that figure—against the express purpose of universal credit to simplify—and with devastating effects on claimants’ incomes.

8. Customers prefer to make their claims face to face rather than online, this caused problems when trying to bring in online claiming for Jobseeker’s Allowance (JSA) with management resorting to promising online claims would be processed faster than those on the phone or online. In our view this broke the DWP customer charter that states that every claim should be dealt with equally.

9. When online claiming was brought in for the Tax Credit system there was a rise in fraudulent claims. While those administering the claim can check entitlement in person or on the phone, an online and automated system doesn’t allow such discretion until after the over payment has been made.

10. Management believes that the currently untested IT system will allow 75% of claims automatically and are basing staffing estimates on these optimistic assumptions. PCS contends this is unrealistic particularly when the profile of many claimants is taken into account. Unrealistic staffing estimates will inevitably cause increased fraud and error, and delays in payments for claimants—leading to increased stress. Misjudging required staffing levels would also incur the extra expense involved in laying off staff initially and then having to recruit new staff later—as has happened in other departments and agencies recently.

11. Recently the JSA online claiming system was outsourced to Capita. Despite government assurances that no work will be outsourced in the administration of Universal Credit, PCS believes this may be a precursor to further outsourcing. PCS has concerns about this as the rules governing civil service misuse of government computer system are robust whilst it is unclear whether private companies take the same precautions against staff looking at people’s personal data without good reason.

Telephone and face-to-face support

12. The best way to help people into work is with a personalised system that responds to people’s individual needs. PCS believes the more alienating the system is the less effective it will be in supporting those who need to claim benefits. The system, as it is currently being set up, involves those in DWP call centres answering an initial call but then often having to ask another colleague to call the customer back to actually resolve their query. This process is unnecessarily cumbersome, makes for very poor customer service and should be ended.

Monthly payments

13. Another concern of PCS is that paying Universal Credit monthly will lead to difficulties for customers having to budget on a very low income. There are already many who struggle to budget over a two week period and with benefits already inadequate many are more likely to struggle over a month period. As housing benefit will also be part of people’s universal credit award, with no option of payment directly to landlords as many claimants and landlords prefer, there is a very real risk of many falling into rent or mortgage arrears and ultimately losing their homes. Coupled with this, the removal of the emergency social fund loan in April 2013, will mean that the emergency support many would use, will have been withdrawn when universal credit begins. This in turn risks many being compelled to resort to loan sharks to make ends meet.

IT Development

14. PCS has a number of concerns about the speed and process by which the IT system that is being put in place to support the proposals has been developed.

15. The universal credit IT appears to have been developed at breakneck speed and as a result is more likely not to be operating properly when it is launched. PCS remains sceptical at the ability of DWP’s IT contractors to deliver large scale IT projects that are fit for purpose or on time. There have been too many large civil service IT projects in the past where, just as with universal credit the aims for the system have been over ambitious (for example Child Support Agency IT, and the 2003 launch of New Tax Credits). The Pay As You Earn (PAYE) project in particular is extremely ambitious and not tried and tested, with ID theft of particular concern.

16. HMRC’s tax credits online service was subject to a criminal attack involving mass identity theft that resulted in very large losses to fraud and PCS believes there has been insufficient time for proper protection to be brought in to guard against this.

17. Contrary to ministerial assurances that no DWP IT work would be allowed to be off-shored the development of Universal Credit IT has been off-shored to India. With unemployment at a high point it is astonishing that the government has allowed skilled IT work to be outsourced, losing tax revenue in the process.

Sanctions

18. Universal Credit will see yet more increases in sanctions, already proven to be an ineffective way of helping to support people into work. PCS members working as Jobcentre advisors have seen their roles changed from helping the unemployed into work to one where managers are pressuring staff into getting unemployed people off the books through use of ever more severe sanctions.

Making tax avoidance easier

19. Currently tax compliance officers often use information about Housing Benefit money paid directly to landlords that they gain from local authorities, to make sure private landlords were tax compliant. As under universal credit the element for rent will be paid direct to the claimants, this source of information will be lost and PCS expects there is a danger that a subsequent loss to the exchequer in tax revenue will result.

Transfer of HMRC staff into DWP

20. DWP plans to transfer several thousand staff from HMRC into DWP to deliver Universal Credit processing work alongside existing DWP staff. PCS seeks assurances that there should be no compulsory redundancies or cut in staff compliment as a result of the transfer of staff for the administration of Universal Credit. The government has not made clear to staff in DWP or HMRC how differences in pay and benefit conditions, which have grown apart over years of delegated pay negotiations, will be harmonised. PCS argues that with the increase in staff responsibilities and the difficulty of delivering a new system, measures to harmonise pay rates for Universal Credit staff upwards must be put in place as soon as possible.

Conclusion

21. PCS does not believe enough time has been taken to develop Universal Credit’s systems and guard against negative impacts to claimants or to those who administer the system.

22. PCS believes that the problem of the digital divide will make it more difficult for those on low incomes to access the benefits to which they are entitled.

23. PCS believes there is a potential for a number of people losing out because of the change in systems. These people risk being pushed further into poverty, while changes in the payment schedule puts many on low incomes at greater risk of debt and exploitation.

24. PCS does not believe a sufficient equality impact assessment has been carried out into the effects these changes will have on disabled or BME claimants.

25. PCS believes the IT system has been developed too quickly in undesirable circumstances and that it should not be rushed out. Serious consideration should be taken before it is rolled out.

26. PCS believes that an automated system has a greater potential for wide scale fraud and that the changes do not do enough to guard against tax avoidance or evasion by private landlords.

16 August 2012