Benefit sanctions Contents

Conclusions and recommendations


1. The Department for Work and Pensions intends Universal Credit to do much more than simply change the way that benefits are processed and paid. DWP aspires for Universal Credit to transform the relationship between claimants and the welfare state, encouraging greater responsibility and independence. Achieving this will require cultural change amongst claimants and DWP staff alike. Universal Support will be a crucial part of that change. The Department must ensure it is funding the right support, at the right time. (Paragraph 7)

2. We welcome the Department’s commitment to reviewing and improving Universal Support. We recommend it sets out the conclusions of this review in response to our Report. (Paragraph 7)

The Universal Support Offer

3. The gap between the Department’s original vision for Universal Support, and the meagre offer it now funds, is vast. The Department envisaged providing ongoing help Universal Credit’s most vulnerable claimants, ensuring they can make the most of the new benefit. In reality it offers a single session of Personal Budgeting and Digital Support, restricted to the first three months of a claim. The current service is almost solely focused on getting new claims up and running. The new contract with Citizens Advice will not substantially diverge from this approach. This may help the Department progress with the roll out, but it is likely to fall far short on helping Universal Credit achieve its wider objectives. In its current form, Universal Support is far from “universal”, and all too often offers only very limited support both budgeting and digital skills. (Paragraph 12)

4. Universal Credit’s savings depend on claimants using its digital systems successfully: not just at the outset, but throughout their time on the benefit. Some will find this easy. Others will require substantial, possibly ongoing, support. The Department provides an extensive list of tasks that Assisted Digital Support providers should assist claimants with, but it will fund only a single two hour session of support at the start of a claim. Its own research shows that for many claimants this is woefully inadequate. The digital service saves DWP money: it is in the Department’s interests to invest in helping claimants use it. (Paragraph 15)

5.We recommend the Department lift the three-month limit on providing Assisted Digital Support. We also recommend it engages quickly and positively with local authorities and Citizens Advice to agree arrangements for funding additional Digital Support sessions for claimants with higher needs. (Paragraph 15)

6.Failure to verify identity online has consequences for claimants: it is a key factor in late or incomplete Universal Credit payments. It also has consequences for Universal Credit’s efficiency, forcing the Department to rely instead on costly and inefficient services in Jobcentre Plus. The Department’s own research starkly illustrates how challenging claimants find this part of the process. The Department intends for 80% of claimants to use Verify successfully when Universal Credit is fully rolled out. But currently almost half of all claimants either try to use Verify and fail, or do not even try. (Paragraph 18)

7.We recommend the Department amend guidance on the content of Assisted Digital Support to include ensuring claimants are able to use the Verify system. We also recommend it set out in response to this Report its strategy and any supporting resources for increasing Verify usage to 80% by 2024-5.(Paragraph 18)

8.Universal Credit is a major change in the way that benefits are paid. Claimants receive one single payment rather than numerous smaller amounts. From this they are expected to budget for all expenses for the entire month. Yet the support that the Department offers to help claimants adjust to this change is severely lacking. Claimants can receive just one session of Personal Budgeting Support at the start of a claim. Those who need more—or who simply misjudge at the outset their ability to cope—risk being without the support they need and facing spiralling financial difficulties. (Paragraph 23)

9.We recommend the Department lift the three month limit for Personal Budgeting Support and engage with local authorities and Citizens Advice to agree arrangements for funding ongoing support for those claimants who require it. (Paragraph 23)

10.Debt can be a barrier to moving into work and progressing to better paid work. In turn, it can act as a barrier to Universal Credit achieving its employment aims. Some claimants will come onto Universal Credit already in debt, but the availability of Advance Payments means claimants may fall into more debt. This creates an obligation on the Department to ensure that claimants are able to manage their debts effectively—in addition to day-to-day budgeting. We recommend the Department extend Universal Support to include a core offer of debt advice and support in negotiating with creditors. (Paragraph 29)

11.The Department reasonably wants to ensure that it collects debts owed to it. But there is compelling evidence that an aggressive approach to recovery hurts more than it helps. Excessively high deductions can pile debt upon debt, pushing claimants into a spiral of hardship and stress. In turn this acts as a barrier to finding employment and progressing in work—and can mean debts take longer to repay. (Paragraph 40)

12.The Department has combined inherited deduction caps from the legacy system with new, higher caps under Universal Credit, and further deductions for Advance Payments. It offered scant detail on how it determined whether these caps and deductions are appropriate. It also seems to understand little about how they are being used in practice. Organisations working with claimants told us that the Department’s approach all too often leaves claimants struggling. Helping claimants to manage their debts effectively and independently is only part of the challenge. (Paragraph 41)

13.We recommend the Department gather and publish data on deductions for debt from Universal Credit awards. This should include data on deductions as a proportion of the overall award. It should use this, alongside commissioning advice from debt experts, to review its maximum deduction caps and ensure they are set at levels that would be sustainable for most claimants. We also recommend that repayments for Advance Payments are included within the caps. This will help to ensure that the design of Universal Credit does not prevent it from achieving its objectives. (Paragraph 42)

14.Government’s approach to debt collection currently lags behind best practice in the retail debt sector. We recommend the Department introduce a flexible, discretionary approach to debt deductions that learns from the best examples in the retail sector. This should include:

The Department should not proceed with managed migration—which will bring many more claimants with pre-existing debt onto UC—until this approach is in place and it can demonstrate that it is functioning effectively. The Department also must not proceed with managed migration until it has assessed the contribution that the five week wait makes to claimant debt and provided this assessment to the Committee. (Paragraph 43)

Delivering Universal Support

15.Both referrals to and take up of Universal Support are much lower than the Department expected. In part, this may reflect the content of the offer: Universal Support is not consistently offering claimants the support they need, at the point they need it. But there are also clear improvements to be made to the mechanisms for accessing Universal Support. At present these position Universal Support as an optional add-on to Universal Credit, rather than a core component of its success. The Department must reinforce the centrality of Universal Support to Universal Credit to both Work Coaches and claimants. (Paragraph 49)

16.We recommend introducing a new ‘Support conversation’ between Work Coaches and claimants at the start of every Universal Credit claim. Work Coaches should then be required to revisit support needs at periodic intervals, in case a new need emerges. (Paragraph 49)

17.Local flexibility and effective partnership working are central to Universal Support’s success. Local authorities and local support agencies such as Citizens Advice are often closer to the people they support and well-placed to identify people who are vulnerable and in need. They should retain a significant degree of autonomy in designing and delivering provision. But the Department needs to balance this autonomy with consistency for claimants. (Paragraph 53)

18.We recommend the Department work with Citizens Advice to agree and define minimum standards for publicising Universal Support and referring claimants to support. This should include implementing a ‘no wrong door’ approach whereby claimants can be referred directly to providers from whichever organisations they present to; rather than having to go via Jobcentre Plus. (Paragraph 53)

19.The Department’s decision to contract Citizens Advice to deliver Universal Support up to 2020 will take pressure off already-stretched local authorities. But 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. (Paragraph 54)

20.The Department claims its new contract with Citizens Advice will ensure Universal Support is delivered more consistently across the country. The contract finishes in April 2020. 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 expected to accelerate. We recommend the Department commit now to funding Universal Support throughout the managed migration period. (Paragraph 55)

21.Co-locating Universal Support providers with Jobcentre Plus Work Coaches has clear benefits for claimants. Co-location is associated with improved referral rates and take up of support that can be vital in easing the transition onto Universal Credit. In turn, this benefits providers and the Department. Providers’ ability to identify and support claimants is improved. Some of the burdens on Work Coaches can be lifted. And the chances of claimants interacting with Universal Credit as the Department needs them to are increased. We recommend that the Department commits to improving co-location of Universal Support providers and Jobcentre Plus. It should co-ordinate this exercise with the roll-out of managed migration. As a first step, it should set out key milestones and targets for co-location in response to this report. (Paragraph 59)

Managed migration

22.The people claiming Universal Credit at the moment are, for the most part, people with relatively straightforward needs. Even this group has had difficulties in adjusting to Universal Credit. The start of managed migration will see an influx of people whose needs are much more complex moving onto Universal Credit. They may have been claiming legacy benefits for many years. They are likely to have little in the way of a financial backstop. Many will require additional help to adapt to the new system. Universal Support should be the Department’s key vehicle for providing that personalised help before, during, and after migration. The Department must accept that a “one size fits all” approach to managed migration—either to the process or the support for it—will not work for many vulnerable claimants. (Paragraph 66)

23.We recommend the Department set out in response to this report how it will go about communicating managed migration plans to all involved, broken down by group: claimants, Jobcentre Plus, local authorities and local support services. This should include setting out plans for additional, targeted, personalised communications with vulnerable groups and the organisations supporting them, beyond the generic communications it already has planned. (Paragraph 67)

24.The Department has correctly identified that the existing iteration of Universal Support is not meeting claimants’ needs. Its improvement plans currently focus on encouraging more people to take up the offer of support and on improving consistency across the country. This is welcome. The Department must be more ambitious, however, and clearer about what outcomes it expects Universal Support provision to produce. As it offers a wider range of support to a more diverse group of claimants, the Department must consistently ensure and revisit whether it is allocating funding effectively, getting the results it wants, and giving claimants the support that they need. (Paragraph 72)

25.Managed migration is the next great challenge the Department will face. Ongoing, open, transparent engagement with organisations supporting claimants on the frontline will be vital to its success. Dialogue with these organisations is helpful and will inform the Department’s understanding of emerging issues. But it must also see the bigger picture. Clear, comprehensive and measurable indicators of progress and readiness for migration will be vital in ensuring the Department makes the right decisions on when and how to move forward. (Paragraph 73)

26.We recommend the Department agree with stakeholders, including Citizens Advice and Citizens Advice Scoland, clear key performance indicators (KPIs) for Universal Support, and share these in draft with this Committee before they are adopted. These should go beyond referrals and take-up and should focus on outcomes for claimants. The Department should commit to publishing regular updates on whether the KPIs are being met, and should make meeting them a condition of proceeding with managed migration. We will return to managed migration in greater detail in our future work. (Paragraph 74)

Published: 28 October 2018