Instruments drawn to the special attention of the House
Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 (SI 2019/1152)
Parliamentary procedure: negative
These Regulations were laid on the cusp of the summer recess to bring into immediate effect the controversial Managed Migration pilot to move long-term claimants of existing state benefits into Universal Credit. In our 58th Report of this session, we published an information paragraph in which we criticised the timing of laying, which effectively prevented Parliament from debating the Regulations until they had been in operation for at least six weeks. We acknowledge the need for the Department for Work and Pensions (DWP) to respond to the High Court judgment, but it was delivered on 3 May 2019 almost three months before the replacement Regulations were laid. The debate following the Minister’s Statement on 23 July 2019 demonstrated a concern in the House that DWP’s handling of this legislation had been “disrespectful to Parliament”.
This report incorporates additional material provided by DWP which provides further information about the design of the pilot to test out the viability of its migration plans. The information gathered during the pilot will be used in the formulation of the subsequent “roll out” regulations, which will come before this Committee in due course. We look forward to scrutinising the “roll out” regulations, and examining the extent to which they provide convincing solutions in response to the concerns about the migration process that this and our previous reports have identified.
These Regulations are drawn to the special attention of the House on the ground that that they give rise to issues of public policy likely to be of interest to the House.
Background
2.The Department for Work and Pensions’ (DWP) long-term policy under the Welfare Reform Act 2012 has been to amalgamate a variety of existing state benefits (“legacy benefits”) into one system of Universal Credit. By the end of 2018, DWP had established the system nationally for new claimants, but further legislation was required for the “managed migration” to Universal Credit for long-term claimants of those legacy benefits. The draft Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations 2019 (“the draft Managed Migration Regulations”) were laid on 14 January 2019 as a replacement for a previous version laid on 5 November 2018 that was heavily criticised by, amongst others, the SLSC’s Sub-Committee B in its 8th Report, because of doubt that DWP had the capacity to make so many changes at once.1
3.Two sets of regulations were laid in January 2019: SI 2019/10 (“the SDP Gateway Regulations”) subject to the negative resolution,2 which came into immediate effect, containing the more urgent provisions to prevent further claimants with Severe Disability Premiums (SDP) migrating to Universal Credit; and a draft affirmative instrument—the draft Managed Migration Regulations—which proposed a limited pilot exercise to test the migration system. Both instruments were addressed in Sub-Committee B’s 14th Report.3 The draft affirmative regulations remained undebated until they were withdrawn and replaced by the current Regulations (SI 2019/1152) on 22 July 2019. Similar regulations, SR 2019/152, laid at the same time, enable the same regime in Northern Ireland but do not include the pilot provisions.4 The Government made a Statement to the two Houses on 23 July 2019 about the new Regulations.5
High Court Judgment
4.The draft Managed Migration Regulations proposed to pay flat-rate sums of “transitional protection” to certain SDP claimants. A High Court judgment found that treating differently those SDP claimants who had already moved to Universal Credit from those prevented from doing so by the SDP Gateway (introduced by the SDP Gateway Regulations) resulted in a payment difference of about £100 per person per month.6 As a result the High Court concluded that provisions in both sets of regulations laid in January 2019 were discriminatory.
5.These new Regulations revoke the SDP Gateway Regulations from January 20217 and increase the level of transitional payments that will be made available to eligible SDP claimants who have already moved to Universal Credit. Those claimants will be eligible for an ongoing monthly flat-rate payment according to their circumstances, and for an additional lump sum payment to cover the period since they moved to Universal Credit (provided there has not been a material change in their circumstances). We note, however, that the Minister stated that DWP is continuing to appeal two of the three cases included in the judgment.8
6.The new Regulations also give some other groups of claimants entitlement to backdated payments under the transitional scheme: those who are found to have been eligible following review, those whose Personal Independence Payment applications have taken a long time to be processed, those who have not received SDP due to error, and those who have either won an appeal or have inadvertently breached the SDP Gateway to claim Universal Credit. (This addresses the third of the individual cases considered by the High Court, which related to a person who had been misdirected to make a new claim and lost money in consequence.)
Timetabling
7.We acknowledge the need for DWP to respond to the High Court judgment. However, the judgment was delivered on 3 May 2019, almost three months before the replacement Regulations were laid. In the information paragraph published in our last report, we expressed surprise and disappointment that these Regulations were laid on the cusp of the summer recess and brought into immediate effect. The debate following the Minister’s Statement on 23 July 2019 demonstrated a concern in the House that DWP’s handling of this legislation had been “disrespectful to Parliament”.9
Change in level of Parliamentary scrutiny
8.The draft Managed Migration Regulations were subject to the affirmative procedure. In contrast, these replacement Regulations are subject only to the negative procedure. Paragraphs 3.4 to 3.5 of the Explanatory Memorandum (EM) explain how this change in procedure was made possible by removing the one provision (on rights of appeal) from the draft Managed Migration Regulations which required the affirmative procedure. In our last report, we said that this appeared to us to be a tactical ploy by the Department to avoid the Regulations having to be debated in Parliament before they could come into effect. We remain of this view: although the SDP provisions had to be changed following the High Court judgment, both Houses have raised broader questions about DWP’s plans for managed migration which they had been assured would be discussed in a debate on the regulations.10
The content of these Regulations
9.In addition to the changes described above, the main provisions of these Regulations replicate the previous version and aim to:
- introduce the process that claimants of certain existing legacy benefits (Income-based Jobseeker’s Allowance, income-related Employment and Support Allowance, Income Support, Housing Benefit and Tax Credits) will follow when they are issued with a notice to migrate to Universal Credit by DWP;
- create a limited pilot so that once 10,000 awards of Universal Credit have been made to persons to whom a managed migration notice has been issued, no further migration may be undertaken by the Department until further regulations are made;
- allow for a transitional element to be considered, calculated, paid and administered to provide protection for existing benefit claimants who, upon managed migration, would have a lower entitlement to Universal Credit than their total existing benefit awards;
- introduce, from July 2019, Discretionary Hardship Payments that can be made to those who have gone through the managed migration process and appear to be in hardship as a result of the termination of their existing benefits or if any other issues related to managed migration have resulted in hardship; and
- introduce, from July 2020, a two-week run-on of Income Support, Income-based Jobseeker’s Allowance and Income-related Employment and Support Allowance for those whose awards of those benefits have terminated as a result of their claim for Universal Credit.
10.Our previous reports expressed a number of concerns about how the legislation will operate in practice. These Regulations do not, in our view, resolve them:
- The “hard stop”: The “hard stop” provision means that any claimant who has not reapplied for their benefits within three months of receiving notice to do so may have their benefits stopped (regulations 44 and 46). During the debate on 23 July 2019, the Minister said that the Department did not intend to stop the benefits of anyone participating in the pilot,11 and the supplementary DWP material published on our website12 reiterates the point. The “hard stop” provision nonetheless remains in the new Regulations.
- The potential for a gap in payments during the transitional period: DWP’s plans for the handling of the changeover period did not, in our view, offer sufficient certainty that claimants would not be obliged to take out repayable hardship loans to survive until their first Universal Credit payment, which normally occurs five weeks after claiming. As well as concerns as to whether the two-week run-on provision would be sufficient for the gap period, there is additional evidence from the National Audit Office (NAO) that DWP are failing to meet processing deadlines.13
- Moving from fortnightly to monthly payments for some claimants: The submissions we received in connection with our previous reports drew our attention to the 745,000 claimants on Employment and Support Allowance (ESA) who would also be required to move from fortnightly to monthly payments as part of their migration to Universal Credit, and who might struggle to adjust. Although DWP told us that Alternative Payment arrangements are available on Universal Credit for people who are struggling to adjust to monthly payments, we took the view that DWP should be proactive and offer relief before an individual got into difficulty. The House may wish to ask the Minister how many of this type of claim will be included in the pilot.
- Too many changes at once: We question whether DWP may be attempting to make too many changes at once by combining a changeover from fortnightly to monthly payments for some, with a complete reassessment of all claimants’ needs and a data cleansing operation, plus reliance on certain IT programmes that have yet to be delivered. The NAO report has already raised concerns about DWP’s ability to run the programme as it currently stands.
11.DWP has responded to a number of these concerns in the additional material published on our website. For example, it states that:
“We are consistently paying around 80% of claimants in full and on time at the end of their first assessment period. Latest published statistics show performance at 84% of claims paid in full on time and 90% were paid in part on time at the end of their first assessment period.14 Over 90% of claimants consistently receive their full payment on time for all assessment periods. … The most recent figures on the length of payment delays for new claims to Universal Credit are detailed in the table below.”
Claims due a payment in February 2019 |
Within 5 weeks of payment due date |
6-10 weeks after payment due date |
More than 10 weeks after payment due date |
|
Received Payment in Full |
96.2% (139,000 claims) |
2.0% (3,000 claims) |
1.7% (2,500 claims) |
|
Received a Partial Payment |
99.0% (142,000 claims) |
0.6% (900 claims) |
less than 0.1% (500 claims) |
Source: DWP
12.DWP added:
“In many cases where payment is not paid in full at the end of the first assessment period, this is owing to unresolved issues such as: claimants not accepting their Claimant Commitment or passing identity checks, or having outstanding verification issues, such as providing evidence of housing costs and self-employed earnings. (Such verification is required by law for the claimant to provide such information before any payment can be made.) … The payment would be calculated and paid once any outstanding issues are resolved … however, the onus is on the claimant to provide all necessary information before they can receive any benefit. The introduction of the universal backdating provision mitigates this concern. The Department continues to engage extensively with stakeholders to ensure that claimants are supported in the best possible way. The Department has also stated that it does not intend to stop claimants’ benefits during the pilot. Instead, it intends to learn how to support people onto Universal Credit without stopping legacy benefits.”
“The Discretionary Hardship Payment, as with the income-related run on IS, ESA (income related) and JSA (income based) and the Transitional Housing payment, will be non-recoverable ... The power for the Payment is broad and the Department intends to use it to pay the equivalent of the two-week legacy run on to those who move as part of the pilot phase and who are in hardship on account of the absence of the run on. Because the power is discretionary, the Department will also be able to make payments if any other issues related to managed migration have resulted in hardship.”
13.Whilst this information may provide a degree of assurance, we remain concerned that thousands of claimants may find themselves in financial difficulty during the changeover period. It is essential that any system of “managed migration” should include provision which will ensure that claimants are not forced into debt because they have been given insufficient funds to match their calculated needs for the duration of the transfer period, or because assessment deadlines cannot be met.
The management of the pilot
14.In Sub-Committee B’s 8th Report, the Sub-Committee recommended a separate pilot on the ground that the House had been given insufficient detail to make an informed decision about DWP’s migration proposals, in the hope that a pilot would provide better information on DWP’s ability to deliver the proposed system to an acceptable standard.
15.On 23 July 2019, the Minister said that the pilot would be based around Harrogate because it provided an appropriate mix of claims. DWP explained further:
“Harrogate has been live with Universal Credit since 2016, and, therefore, has a caseload that will be typical of other sites as we start to scale up. It also has a caseload with a mixture of urban and rural claimants, which will further aid our learning, and it is supported by a local Service Centre under the same management as the Jobcentre.
We have started the ‘Move to UC’ pilot in Harrogate. We are beginning with the ‘Who knows me’ model, which builds on the hypothesis that the organisation that has a relationship with the claimant are best placed to support them through the move to Universal Credit. This model has started with a DWP-led approach that builds on the relationship the claimant has with their Work Coach within the Jobcentre. Once we are confident that this approach works, we will pilot a Partner-led approach where an external organisation, such as a Local Authority instigates a conversation with the claimant to move them to Universal Credit.
The evaluation will examine the pilot processes and the claimant behaviours to ensure that we have a thorough understanding of both the successful aspects of the pilot and the ways in which we can improve our service. We will include learning through observations of the interactions between DWP staff and the claimants they support, interviews with claimants to understand their perspectives and experiences and monitoring of the claimant journey in its entirety, fully accounting for both short term and longer term outcomes.”
16.We welcome the pilot scheme. We are, however, concerned that 10,000 claims are a small sample compared to the approximately two million households which will need to be migrated nationally. The pilot will provide useful data to inform DWP’s approach to migration and claimants’ areas of difficulty. However, the extent to which it can be extrapolated to form an assessment of DWP’s capacity to deliver the migration programme nationally must be open to question.
17.We assume that specialist training and resources will be provided to the staff in the pilot area. In a single small area, there is also likely to be a “word of mouth” effect among the population which will aid in claimants’ familiarisation with the new requirements. The name of the project, the “Who knows me” model, also indicates a degree of intimacy that may not be capable of being replicated in every area. We question whether a pilot based on a single area can provide a sufficiently robust evidence base from which to design a national “roll-out”. DWP has acknowledged this and states:
“The Move to UC pilot is currently focussed on a small and gradual approach to learning from the claimants that we are interacting with in Harrogate Jobcentre. As we move forward, we will consider if sufficient learning will be gathered from Harrogate Jobcentre; or if we need to consider a further jobcentre or location to further develop DWP face to face approach within the Who Knows Me model. We plan to test the other two aspects of the Who Knows Me model (Partner Led and HMRC led approaches) within the Harrogate area during 2020.”
Subsequent regulations
18.In the additional information, DWP states that the pilot will end in 2020 and full migration will be achieved by the end of 2023. The Department has not published a more specific plan because, it explains, the pilot is iterative and the direction of the pilot will depend on the evaluation of each phase. DWP will, however, publish an evaluation strategy by the end of 2019 and will publish the evaluation of the pilot before returning to Parliament with further legislation to continue migration activity.
19. To be able to continue managed migration after the pilot, the Department will need to revoke regulation 2. DWP does not currently have a target date for laying subsequent regulations but (as stated above) has committed to publishing an evaluation of the pilot before seeking to continuing managed migration. We welcome the Secretary of State’s statement that she wants to be personally assured that the process is working before taking managed migration further.
20.On 23 July 2019, the Minister confirmed that these Regulations will commence the pilot for no more than 10,000 claimants and that DWP must return to Parliament for approval to continue managed migration activity after the pilot has been evaluated. She also stated that the report would be available in full before further regulations were laid to roll out the entire managed migration programme.
Conclusion
21.We welcome the decision of DWP to undertake a separate pilot to test the viability of its plans. The information gathered during the pilot will be used in the formulation of the subsequent “roll out” regulations, which will come before this Committee in due course. We look forward to scrutinising the “roll out” regulations, and examining the extent to they provide convincing solutions to the concerns about the migration process that this and our previous reports have identified.
1 8th Report of Sub-Committee B, Session 2017–19 (HL Paper 244).
2 Universal Credit (Transitional Provisions) (SDP Gateway) Amendment Regulations 2019 (SI 2019/10) also with equivalent Northern Irish provisions in SR 2019/2.
3 14th Report of Sub-Committee B, Session 2017-19 (HL Paper 273).
4 Universal Credit (Managed Migration Pilot and Miscellaneous Amendments) Regulations (Northern Ireland) 2019 (SR 2019/152).
5 HL Deb, 23 July 2019, col 680–691 [Lords Chamber].
6 High Court, The Queen on the Application of TP AR & SXC v the Secretary of State for Work and Pensions, [2019] EWHC 1116 (QB), especially para 29.
7 DWP explained that these SDP transitional payments have to be calculated and paid manually; this includes the ongoing payments that will be made every month. This is highly labour intensive, and in consequence, the SDP Gateway cannot be removed until January 2021 because the Department needs to build a system to identify and automate the payments before it can cope with the ‘flow’ of claimants onto Universal Credit appropriately.
9 HL Deb, 23 July 2019, col 680–691 [Lords Chamber].
10 HC Deb, 8 January 2019, col 175 [Commons Chamber]: “We will also ensure that the start date for the July 2019 test phase involving 10,000 people is voted on … Let me clarify once more that we will hold a debate on affirmative regulations in relation to the managed migration regulations”.
12 Secondary Legislation Scrutiny Committee publications page: https://www.parliament.uk/business/committees/committees-a-z/lords-select/secondary-legislation-scrutiny-committee/publications/.
13 National Audit Office, Rolling out Universal Credit (15 June 2018): https://www.nao.org.uk/wp-content/uploads/2018/06/Rolling-out-Universal-Credit-Summary.pdf [accessed 4 September 2019].
14 Department for Work and Pensions, Universal Credit statistics: 29 April 2013 to 11 July 2019 (13 August 2019): https://www.gov.uk/government/statistics/universal-credit-29-april-2013-to-11-july-2019 [accessed 4 September 2019].