Additional funding for Universal Credit unveiled in last week’s Budget will be used to provide a package of measures to reduce the risk of financial hardship to claimants, the Department for Work and Pensions has announced, after its independent advisors said its proposals for the roll-out were "unacceptable".
Work and pensions secretary Esther McVey unveiled plans to overhaul the managed migration process yesterday, after the Social Security Advisory Committee said “too much risk was being loaded on to individuals” under DWP’s plans. It recommended 12 changes to the draft legislation in a report made public yesterday, of which 11 have been accepted by the government and which underpinned the changes McVey announced.
Outlining the changes, McVey said DWP would “take a measured approach to delivering managed migration, taking our time to get it right and working with claimants to co-design it”. She said the £1bn boost chancellor Philip Hammond announced in the Budget would be used to fund changes including additional testing of the process and provide an additional two weeks of benefit payments to out of work claimants to bridge the gap before their first Universal Credit payment.
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The committee, which provides impartial advice on social security legislation to the department, had said claimants transferring from the old system would see a gap between payments and would therefore face a "choice between financial hardship as they wait for their first payment, or getting into debt to the department by requesting an advance payment". "We do not believe that this is acceptable," its report said.
McVey also confirmed Hammond’s announcement in the Budget that the department would increase work allowances, at a cost of £1.7bn per year once the system is rolled out completely.
“We are pleased that the government has largely accepted our advice,” SSAC chair Sir Ian Diamond said in a statement. However, he added: “We remain concerned about the degree to which the department will in practice demonstrate the openness and flexibility to which they have committed.”
The committee was also “disappointed” that DWP had stopped short of accepting the SSAC’s recommendation to automatically migrate all existing benefit claimants onto the new system. The government said people must make a claim for Universal Credit to continue receiving benefits, but that they would be given three months to do this, rather than one as initially planned.
In a consultation the SSAC carried out for its report, charities and other respondents warned that requiring people to make a claim for Universal Credit in order to be transferred onto the new system leaves open a risk that some might miss the deadline and therefore lose transitional protection.
The committee received a record number of responses to its consultation – 455 – which it said was unsurprising “given the significance of the step DWP is about to take”.
“We were particularly struck by the degree of anxiety that was conveyed to us in the submissions from individuals,” the report said.
The Resolution Foundation also gave a cautious welcome to the changes. “[Universal Credit’s] progress has been significantly eased by the welcome measures announced in the Budget, including higher work allowances and the rolling-on of key benefits to prevent significant waits between payments,” said David Finch, a senior fellow at the think-tank. “The secretary of state’s relaxation of hard deadlines within which families must complete a claim is also encouraging.”
However, he warned that managed migration remained the “biggest challenge yet facing the government’s flagship welfare reform”.
He said the government “must increase the share of claims that are paid in full and on time”, referring to severe payment delays that have so far plagued the system and attracted heavy criticism from, among others, the National Audit Office, the Public Accounts Committee and the Work and Pensions Select Committee.