10.When the system runs smoothly, claimants now face a mandatory wait of five weeks for their initial payment once they have claimed Universal Credit. This wait can be much longer if claimants struggle to make the initial claim, or if they are not paid on time. In March 2018 the Department failed to pay 21% of new claimants their full Universal Credit entitlement on time following their initial claim, and 13% received no payment on time. The Department does not expect payment timeliness to increase significantly above 80% in 2018. During 2017 there were around 113,000 late payments affecting around one quarter of new claims, and the National Audit Office estimates that there will be between 270,000 and 338,000 late payments during 2018.
11.Around 60% of claimants receive an advance from the Department to tide them over while they await their first payment. Advances are loans which are usually repaid to the Department through deductions from future payments, and therefore immediately add to a claimant’s debt. Under Universal Credit debt can be deducted at high rates of up to 40% of a claimant’s standard allowance. When we asked the Department what it had done to understand whether people could cope on what remains of their payment once deductions are made, it told us that average repayment on an advance is currently about £35 a month. Astoundingly, the Department argued that for people on low income: “that is an amount of money, but it is not eye-wateringly large”. When pressed further for evidence that claimants can cope, the Department offered that some claimants choose to repay their advance more quickly than the full 12-month period available but did not outline any research it had undertaken in this area.
12.We heard from Newcastle City Council that claimants going onto Universal Credit face increased rent arrears. Leicester City Council added that it had seen two eviction notices within the three weeks of Universal Credit full service being rolled out. This is supported by recent surveys covering the social housing sector, which found that almost three-quarters of Universal Credit tenants are in arrears compared to just over one-quarter of other tenants. One survey reported that it can take claimants 18–24 months to clear this debt.
13.The Trussell Trust has seen a 52% increase in foodbank use in areas where Universal Credit had been rolled out for 12 months or more. In contrast, the increase was 13% where Universal Credit had not yet been rolled out, or had been available for three months or less.
14.The Department repeatedly refused to accept that Universal Credit causes hardship for some claimants, and stood by its argument that “it should not have, because of the availability of advances”. When we put the results of its own survey to the Department, which showed that 40% of claimants were experiencing financial difficulties eight or nine months into their claim, it claimed that the results were comparable to the experience of claimants under the legacy system and did not indicate that Universal Credit was the cause. The Department failed to explain how it measures hardship as a result of Universal Credit. It only cited the “text-mining” technique that it is developing to measure vulnerability (not hardship), which is not yet in place. It told us ‘what matters is not whether [it has] got data on hardship, but whether [it is] providing the right service to clients who come through the door”.
15.The Department relies on Jobcentre work coaches to tailor Universal Credit to meet a claimant’s individual needs. We heard from Mind, however, that work coaches do not always use their discretion to apply adjustments that would enable a person to progress through the system smoothly. Work coaches can adjust work search and conditionality requirements (for example, the number of hours work search expected) for claimants who are not well enough to work and are awaiting a work capability assessment, but they do not automatically do this. Mind reported that claimants with mental health conditions often struggle to cope with the requirements which are set, for some this can result in a significant deterioration in their condition and they can end up with sanctions (which means their Universal Credit payment will be temporarily reduced).
16.The Department’s own research has highlighted that its staff reported: lacking time and ability to identify claimants who needed additional support; lacking the confidence to apply processes flexibly and make appropriate adjustments; and feeling ‘overwhelmed’ by the number of claimants they are dealing with. Charities voiced concerns that the number of claimants that work coaches are expected to deal with is set to quadruple from 85 in March 2018 to 373 in 2025, despite vulnerable people not getting the support they need under the current caseload. The number of claimants per case manager is also set to increase six fold from 154 in March 2018 to 919 by 2025.
17.The Department has no means to monitor the experience and treatment of vulnerable claimants, such as those with mental health conditions, as it does not collect data on these groups within its systems. Currently, staff record information on a claimant’s needs using a text box in the claimant’s journal, which can be ‘pinned’ to the top of their record so it is more visible for others dealing with the claimant. The Department explained it was developing a text-mining approach to extract data on different groups using the information recorded by work coaches, which it plans to use as management information. The Department explained it had decided not to build the ability to flag vulnerabilities more quantitatively in its systems, as ‘markers’ in the legacy systems are often not updated, or are not removed when they should be. It noted that, using the text-mining approach, it has found it easier to get information on some vulnerabilities (such as domestic violence victims) than others because of the wording used to record different needs. The Department told us it expects the first run of this technique to be completed by the end of summer.
18.The Department recognised that some claimants would need help to adjust to Universal Credit and so put in place ‘Universal Support’. Universal Support provides personal assisted digital support and budgeting support to help claimants make an online claim and manage a monthly payment. Despite the existence of this support, the Department’s own survey showed that 25% of people reported not being able to make a claim online, and 40% reported financial difficulties.
19.Current Universal Support provision is inadequate and inconsistent across the country. Charities reported that Universal Support is not always offered to claimants who need it. For example, research by the Trussell Trust found that only 8% of claimants referred to its foodbanks had been offered any support from the jobcentre or council when they moved onto Universal Credit, whereas 63% were offered no help at all. The Department told us that Universal Support take-up has been only a third of what it expected. Citizens Advice suggested that this was because only certain organisations (jobcentres, local authorities, and Universal Support providers) could refer claimants to Universal Support.
20.The Department’s funding of Universal Support is also an issue. For example, Leicester City Council found that its local welfare advice provider was unable to provide personal budgeting advice to claimants for the level of funding offered by the Department. However the Department did not review the amount of funding available, and as a result there is no personal budgeting support available in that area.
21.We also heard concern that the assistance available from Universal Support was ‘very brief’. The Department remarked that this was “quite strange”, as councils report not having enough time within the two-hour sessions, whereas data they provide showed that on average they were actually taking 74 minutes for pre-budgeting support. However, claimants often need help further down the line when receiving monthly payments, rather than the pre-budgeting support funded by the Department.
22.Charities have raised concerns that Universal Support does not go far enough. For example, personal budgeting support does not include debt advice, which charities regard as being one of the most pressing needs for claimants. The Department explained that Universal Support did not offer debt advice as it was already available from the Money Advice Service. However, it acknowledged that it was reviewing the Universal Support offer, but is awaiting a report by the Work and Pensions Committee before setting out how it will adapt Universal Support.
17 , Figure 9. Before February 2018, many new claimants incurred an additional seven-day wait.
18 , para 2.20
19 , paras 2.13, 2.15, 2.19–20
20 , paras 2.21, 2.25
21 Q 94
22 Q 95
23 Qq 2, 7
25 ARCH and National Federation of ALMOs,
26 Q 9
27 Qq 72, 74, 88, 89
28 , pg16
29 Qq 73, 75
30 Qq 75, 86
31 Q 81
32 Q 75; , Figure 8
33 Qq 17, 44
34 Q 44; Mind, (), pages 1–2
35 , para 2.5
36 Qq 32, 44;
37 , paras 2.6–7
38 Q 78
39 Q 84
40 Qq 81–82
41 , paras 2.11 and 2.13, Figure 8
42 Citizens Advice (), page15
43 Q 9; The Trussell Trust (), paragraph 17
44 Q 226
45 Citizens Advice (), page 16
46 Q 28
47 Q 56
48 Q 235
49 , Figure 14
50 Citizens Advice (), page 16; Trussell Trust (), paragraph 18
51 Qq 9, 32, 47; , Figure 8
52 Qq 226, 227, 234
Published: 26 October 2018