Summary
The Department for Work and Pensions (DWP) and its public bodies have been at the heart of the Government’s response to the coronavirus pandemic. Our report addresses a wide range of matters across the Department’s responsibilities, looking both at urgent changes needed now and at the plans it will need to make for the future.
We pay particular tribute in this report to DWP’s hardworking frontline staff, who have successfully withstood enormous and unprecedented pressure. We thank them all for their dedication and hard work. We also commend Ministers for many of the policy decisions that were taken at the start of the crisis, which have helped mitigate some of the worst impacts.
Universal Credit
The rise in new claims for Universal Credit since lockdown began has been unprecedented. DWP’s frontline staff have rightly received praise for turning around such a large volume of claims, and there has been a noticeable improvement in the proportion of people who are paid on time. But around 7% of claimants—more than 200,000 people—are still being paid late. The Department should now set out how it intends to maintain or improve on these standards without the same numbers of staff in frontline posts.
The wait for the first payment, which was how Universal Credit was originally designed, means that many people decide to take out an Advance, which must be paid back over 12 months in monthly instalments. Charities who work with claimants have highlighted the financial burden of Advance repayments on people who are already struggling due to the outbreak and called on the Government to suspend them temporarily—as it has done for other forms of debt. DWP, however, has said that, for operational reasons, this cannot be done. It is surprising that an agile system like Universal Credit does not have the built-in flexibility to allow Ministers to suspend Advance repayments in a time of crisis. The Department should now review its internal systems and consider what improvements are needed to build in this much-needed flexibility. We also received evidence, including from Citizens Advice, that some vulnerable claimants, for example, blind or visually impaired people, found the online digital application difficult; for some it was a barrier to accessing social security support.
Making a new Universal Credit claim has worked well for huge numbers of people. But it has been detrimental for some: people who have applied for Universal Credit, not realising that doing so would stop their existing benefits claim, and have found themselves worse off as a result. Some have even been left with no support from the benefits system at all. The Secretary of State has promised to look into this. The Department must urgently take steps to return these claimants to their pre-existing benefits, or the equivalent financial position.
Legacy benefits
In response to the coronavirus pandemic the Chancellor raised the standard allowance for Universal Credit and Working Tax Credits. But there were no corresponding increases to other benefits which existed before UC (known as ‘legacy benefits’), which include benefits for disabled people. We have heard evidence that this has left the people claiming those benefits struggling to meet the additional costs created by coronavirus.
DWP has explained that making changes to UC and Working Tax Credits could be done quickly, and that making changes to legacy benefits takes several months of preparation. It was right that the Department, in the initial phase of the crisis, focused on increasing the rates of Universal Credit and Working Tax Credit. But we see no reason why people should face hardship because—through no fault of their own—they find themselves claiming benefits that rely on outdated and complex administrative systems. We call on the Department to increase legacy benefits by the equivalent amount. It should also restore their entitlement to transitional protection for any future move to Universal Credit by managed migration.
People with no recourse to public funds (NRPF)
Many foreign nationals in the UK, including families whose children are British citizens, have no recourse to public funds (NRPF) as a condition of their visa, which means that they cannot access the Universal Credit safety net. We heard evidence that people with NRPF who have lost income due to this crisis are facing further hardship and, in some cases, homelessness and destitution. During a pandemic, it cannot be right that people who work hard and contribute to the economy, many of whom have children who were born in the UK, are being left without a safety net. Ministers have given repeated assurances that they are reviewing the support available for those with NRPF, but people need support now. We therefore call on the Government to suspend the NRPF condition immediately on public health grounds and to collect data to quantify those with NRPF, including the homeless.
The Prime Minister has helpfully clarified that people with NRPF can benefit from the Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS). We encourage the Government to publicise this fact, so that people with NRPF are aware that they can access support through these schemes.
The benefit cap
The benefit cap limits the total amount of income that a household can receive in benefits. The cap has meant in practice that some people have not been able to benefit fully, or in some cases at all, from the various increases announced by the Chancellor. Those increases are very welcome—but the cap means that they are not reaching everyone who needs them.
The Department has told us that the number of people affected is likely to be very small. But it has not explained in detail how it has worked that out. We call on the Department to carry out and publish a full analysis of the numbers and characteristics of households who will be newly subject to the cap.
Health assessments for benefit claims
Even before the lockdown, the Department moved quickly to suspend face-to-face health assessments for benefits. It said that claims would be assessed on paper or by telephone instead. That change was very welcome, but we have heard concerns about how well it is working in practice.
People still need to supply medical evidence to support their claim for health benefits. This means many are navigating a stretched health service, often without their usual support from external organisations. The Department must communicate clearly to staff and contractors that they should take a proportionate and flexible approach to requirements for medical documents, which demonstrates the appropriate level of trust in claimants. It should work closely with healthcare bodies to ensure there is no added pressure on medical professionals.
The Department should confront the delays within its own system too. Respected organisations have told us that people who started claims or appeals before the outbreak are facing long delays—and facing substantially reduced income as a result. The Department has so far not addressed those reports. It should investigate and address the delays. We also heard evidence that people who had been awarded PIP by a tribunal were not having their awards extended. The Department says that this problem has now been resolved, but we would encourage it to engage with support organisations to make sure that, in practice, people are not facing difficulties in having their PIP awards extended.
Elsewhere, there have been significant improvements in the time taken to process claims. But this seems to be due in part to a worrying decrease in the number of new claims for PIP. The Department should investigate why the number has fallen so dramatically, and establish whether there are barriers to claiming.
Disabled people still face many of the same problems applying for benefits as they did before the coronavirus outbreak. The Department has failed to act on previous recommendations, including from our predecessor Committee, to offer audio-recording of assessments as standard and to communicate with claimants in ways that meet their needs. Ministers and senior officials tell us that they are keen to do both these things: they must now provide a clear timetable for action.
Special Rules for Terminal Illness
The Special Rules for Terminal Illness provide a fast-track for terminally ill people who need to claim benefits. We heard from support organisations that there was a lack of clarity about what evidence was needed to support those claims, which was exacerbated by difficulties in obtaining medical evidence during the pandemic. That confusion risks making an already difficult situation worse for people with a terminal illness and their families. We urge the Department to publish clear guidance for claims made under the Special Rules and to make explicit that a DS1500 form is not currently required.
Self-employment
Self-employed people make up about 15% of the UK’s workforce. Many of them have had to turn to Universal Credit, often for the first time, as a result of the coronavirus outbreak and the lockdown. Advice organisations have found it difficult to get clear guidance about how Universal Credit will interact with other forms of government support. The Department must, as a matter of urgency, provide clearer guidance for self-employed people as they navigate a complex set of rules. The Government will also recognise that many self-employed people have not received any Government financial support from either Universal Credit or the various coronavirus grant or loan schemes. The Treasury Committee has estimated that more than a million people have missed out on government support during the pandemic.
The impact of coronavirus has been felt acutely by people in precarious and low paid work. It has added greater urgency to existing debates about employment status and rights. We urge the Government to bring forward the Employment Bill at the earliest opportunity, to allow Parliament to address those issues.
Analysis and impact assessment
The coronavirus pandemic has affected the whole country. But it has not affected everyone equally. We have seen evidence of a disproportionate impact on a range of different groups. As the Government Department responsible for addressing poverty, supporting disabled people and providing support through the benefits system for disadvantaged groups, DWP must be able to demonstrate that its response to the coronavirus pandemic is contributing to those aims. It should commission an independent impact of the impact of the coronavirus outbreak on levels of poverty and household debt, looking in particular at people with protected characteristics under the Equality Act 2010, at regional differences and at people with different employment statuses.
Recognising the contribution of DWP staff
DWP staff have been at the forefront of the Government’s work to support people through the coronavirus outbreak. Many have been redeployed into new roles to deal with unprecedented numbers of new claims, and a significant proportion now work remotely. Surprisingly, none of the Department’s staff who process Universal Credit claims worked remotely before the coronavirus. The Department should set out how it will continue to give staff the option to work remotely, and, when face-to-face services resume, how it will ensure staff are safe when they work on the Department’s premises.
Ministers are right to speak warmly of the remarkable work of DWP staff to provide financial support to millions of people. Now, they deserve concrete recognition. The Department should set out its plans to recognise and reward DWP staff, and we note the request made by the Public and Commercial Services Union that DWP staff receive a pay increase.
The Health and Safety Executive (HSE)
Many people are very worried about how safe they are at work during the pandemic. The Health and Safety Executive (HSE) has received thousands of concerns from workers. HSE has required just one employer to close as a result of coronavirus. It keeps no records on how many workplaces voluntarily close after an intervention by HSE, making it impossible to measure the impact it has had. It should work to improve the transparency of its reporting, to send a clear message about the impact it has had.
The Prime Minister has made clear that HSE will be expected to undertake spot checks of employers to ensure that they are “Covid secure” as people return to work. But it is not yet clear how these employers will be selected, or how many checks will be performed. HSE should urgently clarify what its role will be as the pandemic unfolds, the Government should then ensure that it receives whatever level of funding is needed to implement this new and future inspection regimes. Following years of cuts, this is likely significantly to exceed the £14m funding increase announced in May.
Pensions
The impact of coronavirus has placed additional pressure on the pension system in recent months. The Pensions Regulator has needed to take a more flexible approach towards businesses pension duties, whilst fundamentally protecting the pension rights of workers. That flexibility is appropriate, but it must remain alert to the risks of abuse by unscrupulous employers. People facing financial hardship may also be looking at their pension savings as an extra form of support. It is important that these savers are protected from decisions not in their best interests and do not see their savings fall into the hands of opportunistic scammers.
Employment support
Coronavirus has transformed the UK labour market from the record employment levels seen in the first quarter of 2020. The effect of the economic lockdown has not been felt evenly; if there are lessons to be drawn from past slowdowns, it is that increased joblessness will be felt hardest by young people, disabled people, older people, women and people in low paid jobs. Central Government cannot provide a response to this on its own. It will need to work closely with business, the third-sector and local government. A labour market response to an economic downturn of this scale—potentially greater than the financial crash of 2008—will take time to develop. The Government must start planning it now. We call on it to set out its plans, including the apprenticeship guarantee recently outlined by the Prime Minister.
Published: 22 June 2020