Universal Credit in Crisis | Redbrick | University of Birmingham

Universal Credit in Crisis

News Reporter, Miki Leigh, investigates how the government are facing pressure over Universal Credit which could leave students and graduates waiting for a minimum of six weeks for their first income support payments

Recent graduates, part-time students, student parents, postgraduate students and other students who require income support when looking for work may have to wait for a minimum of 6 weeks for their first payment if the UK government’s plans for the nationwide rollout of their welfare reform policy Universal Credit goes ahead.

Faced with public and parliamentary pressure over the minimum six-week wait, which has frequently been higher in areas where Universal Credit has been piloted, the government has agreed to make an ‘advanced payment’ available during the wait for the first Universal Credit payment. However, this advance payment is a loan which must be repaid from future Universal Credit payments.

1,182,000 three day emergency food supplies were given to people in crisis in the past year – 436,000 to children

The Labour Party recently won a ‘symbolic victory’ in an opposition day motion in the House of Commons calling for a pause to the Universal Credit rollout until identified problems have been resolved. The Conservative whips instructed their MPs to abstain on the motion which eventually won 290 votes to 0. The vote was dismissed by the government who plan to continue with the full rollout of Universal Credit nationwide. The government also recently U-turned on a previous decision to charge claimants 55p per minute to call the Universal Credit helpline.

The architect of Universal Credit, Iain Duncan Smith, and other Conservative backbenchers have argued for the government to change course, suggesting a reduction in the wait time from six weeks to four weeks as one possible solution. The Chancellor, Philip Hammond, has suggested the wait could be reduced to five weeks.

The government says that the reforms will save the taxpayer billions, will simplify the welfare system by merging forms of entitlement into a single monthly payment, and will ‘make work pay’ by incentivising work, which has been described by Conservative MPs as ‘the best route out of poverty’.

However, there are several problems with the government’s justification for Universal Credit. Firstly, while the government’s welfare reforms have saved billions which contribute towards eliminating the UK’s structural deficit, the IFS has shown that the overall distributional impact of the government’s planned tax and benefit changes, including Universal Credit, disproportionately targets those with the lowest incomes. Universal Credit has also faced criticism from numerous charities such as Citizen’s Advice, Shelter, The Trussell Trust, the Joseph Rowntree foundation and the Child Poverty Action Group.

Areas of full Universal Credit rollout...have seen a 16.85% average increase in referrals for emergency food

Also, support for the government’s welfare reforms is premised on systematic public misperceptions of, for example, the proportion of the welfare bill allocated to out-of- work benefits, and also welfare fraud, which the public on average overestimated to be 34 times its true level, according to 2013 survey research by Ipsos MORI.

Furthermore, the government’s policy of austerity is facing increasing public scepticism as British Social Attitudes research shows that public support for austerity policies is at its lowest since the 2008 global financial crisis. This mirrors growing criticism of austerity policies from experts and international institutions such as the IMF and OECD. This was partially reflected in the swing to the anti-austerity Labour party in the 2017 general election, which saw the Conservatives lose their absolute parliamentary majority.

Lastly, contrary to the government’s assumption that work is the best route out of poverty, it has been found that 60% of people in poverty live in a household with someone in work. The government’s plans for Universal Credit were first announced in 2010 by Ian Duncan Smith MP but the policy has been beset with numerous delays to its planned nationwide roll-out.

Universal Credit comes on top of measures taken by the Coalition and Conservative governments which have put pressure on those on the lowest incomes. These include; freezing the benefits uprating rate which severed the link between social security payments and inflation, capping housing benefit, implementing what has been called a ‘two child policy’ which limits child benefits to the first two children, removing income from social housing tenants with spare rooms (known as the ‘bedroom tax’) and implementing benefits sanctions ever more liberally (in 2017 sanctions increased 50% in six months). In Leeds for instance, a quarter of Universal Credit claimants were found to have been sanctioned. Benefits sanctions can leave claimants with no income support for up to three years if they have failed conditionality requirements on several occasions. Research has furthermore linked benefits sanctions with increased food bank use.

It seems to be penalising the poor. And it perhaps it suggests that misogyny is more deeply ingrained in society than most people believe

Emergency food bank use has increased over 2500% since 2010. Between 2016-2017, the Trussell Trust found that ‘1,182,000 three day emergency food supplies [were] given to people in crisis in [the] past year – 436,000 to children’. The Trussell Trust are only one of several food bank distributors so the actual emergency food aid figures are higher. Two people now die of starvation or thirst per day in the UK. Research has linked Universal Credit pilots with increased food bank use: the Trussell Trust has found that food banks in ‘areas of full Universal Credit rollout...have seen a 16.85% average increase in referrals for emergency food, more than double the national average of 6.64%’.

Access to justice has also been cut which will have consequences for future Universal Credit claimants who appeal Department for Work and Pensions (DWP) decisions. Legal aid cuts precipitated a 99.5% collapse in numbers receiving state support for appealing decisions to remove their income support. The majority of these are sick and disabled Personal Independent Payment (PIP) and Employment Support Allowance (ESA) claimants.

Students with disabilities could also face severe hardship as, in addition to the government cuts to the ESA Work Related Activity Group, ever more stringent conditionality requirements for PIP and ESA recipients have led to greater numbers losing support and being told to look for work. More disabled students previously entitled to ESA and PIP could therefore find themselves forced onto Universal Credit.

An FOI request found that 4,000 people had died after the DWP declared them ‘fit for work’ after a work capability assessment, however without average death rate figures of ESA claimants for comparability, which the DWP does not collect, the figures remain contested. Furthermore, the United Nations have recently condemned the Conservative approach to disabled human rights, claiming their policies have led to a ‘human catastrophe’.

Universal Credit in its current form could exacerbate the current student mental health crisis. Students are currently facing record suicide rates and dropout levels, and a survey of first year students indicated that reports of mental health difficulties have risen fivefold. A charity has claimed that work capability assessments permanently damage the mental health of those subjected to them.

For those who have been found to be fit for work, a six-week wait for the first Universal Credit payment for disabled students and students with mental health difficulties (already facing tens of thousands of pounds of debt upon graduating) will pose severe challenges. Disability Rights UK expect that half a million disabled people could be worse off under Universal Credit.

I am very concerned about it especially considering how hard it can be to get a job after graduation

Students and graduates enrolled onto Universal Credit in its current form may also face additional housing difficulties: DWP research has found Universal Credit is a key factor in increasing claimants in rent arrears.

Some female students could also face considerable hardship from Universal Credit in its current form. Research has shown that women have shouldered 86% of the burden of austerity cuts. In addition to this, the Women’s Budget Group have argued that Universal Credit will reinforce the male breadwinner stereotype and this could therefore reduce women’s financial independence.

One female student told Redbrick, 'it seems to be penalising the poor. And it perhaps it suggests that misogyny is more deeply ingrained in society than most people believe'.

Another student said, 'I am very concerned about it especially considering how hard it can be to get a job after graduation. It all seems pretty terrible'.

Student parents are facing an unprecedented challenge as child poverty is now predicted to rise for the first time since great progress was made halving the level between 1997-2010. The IFS has warned that 400,000 more children will live in poverty in 2021 due to benefit changes including Universal Credit. Lone parents will lose more of their income from Universal Credit than other groups.

Given the research showing the significant negative consequences of Universal Credit where it has been piloted, the motion in the House of Commons and calls from MPs from multiple parties, the public, activists, charities and experts for the government to revise the policy, the government will clearly face considerable pressure and opposition to its plans to implement the policy in its current form over the coming weeks and months.


Article by Miki Leigh


18th December 2017 at 9:00 am

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