Benefit sanctions Contents

Summary

Universal Credit aims to deliver much more than technical and administrative change to the way benefits are processed and paid. The Department for Work and Pensions (DWP/the Department) has ambitious aspirations for it to transform the way claimants interact with the welfare state, encouraging and supporting them towards greater independence and personal responsibility. Achieving this will require cultural change amongst claimants, DWP staff, and delivery partners alike.

Universal Support should drive this change. It is an offer of support with using a computer to make a claim, and support with personal budgeting. DWP envisaged that Universal Support would include both short-term help for claimants to adjust to the immediate challenges of Universal Credit, as well as longer-term help for vulnerable claimants who would otherwise struggle to adapt. Universal Support does not just have the potential to make the lives of claimants much easier. Done well, it could also play a vital part in ensuring that Universal Credit delivers its wider objectives, including improved employment rates and savings to the public purse. The importance of getting Universal Support right will increase as the Department begins managed migration of 3.95 million legacy benefit claimants—including many of the most vulnerable people—to Universal Credit from 2019.

But in its current form Universal Support is far from “universal”—and all too often offers very little in the way of support. The gap between the Department’s vision for Universal Support in 2013, and the meagre offer it now funds, is vast. Claimants are entitled to a single, two-hour session of personal budgeting and digital skill support within the first three months of their claim. Given the scale of challenges that many claimants face, this is woefully inadequate. The Department should immediately lift the three-month restriction and commit to providing ongoing support to people who need help with maintaining their claim. It should also engage quickly and positively with its new delivery partner, Citizens Advice, to agree arrangements for funding multiple Universal Support sessions where there is evidence of claimant need.

The five week wait built into Universal Credit risks causing debt problems, or making people’s existing debt problems worse. Advance Payments, intended to tide claimants over during the five-week wait for their first Universal Credit payment, are themselves a debt. Many claimants will also have existing Government and third-party debts. Yet the Department does not yet offer debt advice as part of Universal Support. Persistent debt can prevent claimants from finding and staying in work, meaning debt is a barrier to Universal Credit changing the relationship between benefits and work. Advice on managing debt effectively should be a core element of Universal Support, offered to all claimants.

Empowering claimants to manage debts is only one side of the challenge, however. The Department’s approach to collecting debt can leave claimants swimming against a tide of unmanageable repayments. Organisations that support claimants told us that all too often, repayments pile debt upon debt, trapping people in a downward spiral of debt and hardship. This can then extend the time that it takes for debts to be repaid.

In the interests of transparency and understanding how its policies affect claimants, the Government should gather and publish data on Universal Credit debt deductions. It should use this to review its maximum deduction caps and ensure they are set at levels that would be sustainable for most claimants, taking advice from debt experts on the right levels. The Department should introduce a new, flexible, discretionary approach to debt management, drawing on best practice in the retail sector. Crucially, the Department must not proceed with transferring existing claimants onto Universal Credit on a large scale until this approach is in place and functioning effectively. Before proceeding with managed migration it must also assess the contribution that the five week wait makes to claimant debt and provide this assessment to the Committee.

Getting the content of Universal Support right is vital. So too is improving the way that claimants access the service. Both take up and referrals are much lower than expected. Providers received just a third of expected referrals in 2017/18, and only a third of those actually took up support. Jobcentre Plus Work Coaches are responsible for referrals. They should be supported to see Universal Support as a core part of Universal Credit. The Department should introduce a ‘Support conversation’ between Work Coaches and claimants at the outset of each claim, and require Work Coaches to revisit this periodically in case a need emerges later. The Department should also implement nationally a “no wrong door” policy, allowing claimants to be referred directly to providers from whatever support organisation they present to, without having to go via Jobcentre Plus.

The Department’s announcement that the contract for Universal Support will pass to Citizens Advice and Citizens Advice Scotland in 2018/19 and 2019/20 will help take pressure off already-stretched local authorities. The Department must ensure that this change is not merely cosmetic. Improving the support offer itself—and not simply changing the delivery partner—is crucial to ensuring people receive the help they need.

The Department also claims the new contract will ensure that people across the country are able to access Universal Support consistently. The contract finishes in April 2020, and the Department plans to review the support offer towards the end of March 2020. But leaving decisions on the size and shape of the service too late risks creating a gap in support for claimants—at the very time that managed migration is accelerating and the need for support increased. Committing to funding Universal Support throughout the managed migration period would give both providers and claimants some much-needed stability and consistency.

The existing Universal Credit caseload is heavily weighted towards relatively straightforward cases. The start of managed migration will see an influx of more claimants with more complex needs moving onto Universal Credit. They may have been claiming legacy benefits for many years and have little in the way of a financial backstop. Many will require extensive help to prepare for and adjust to the new system. The Department must verify that Universal Support is delivering what people need, when they need it, before it proceeds with managed migration. In agreement with Citizens Advice and other support organisations, it should set clear key performance indicators for Universal Support and publish regular updates on whether these are being met. They should go beyond take-up, focusing on the effects on claimant outcomes such as debt or digital skills. The Department should not proceed with transferring claimants from legacy benefits to Universal Credit unless these targets are being met.

DWP designed Universal Credit. So it has a duty to ensure that it works for claimants and the local services which support them. Universal Support should be—and could still be—the means of ensuring this is achieved and realising the wider benefits of Universal Credit. As the challenges of managed migration loom, the Department faces a critical decision. Failure to overhaul Universal Support substantially now will place not only the wellbeing of claimants, but the success of the entire Universal Credit project, at risk.





Published: 28 October 2018