Ignore and refute: Government’s response to the Work and Pensions Select Committee’s Universal Credit report

At the beginning of the year, the Government responded to the Work and Pensions Select Committee’s report ‘Universal Credit: The wait for a first payment.’ This report contained extensive evidence from a range of stakeholders on the hardship Universal Credit’s (UC) design flaws, including the minimum five week wait for a first payment, is causing – as well as considered recommendations put forward by the Committee that could help alleviate these. The Government’s response was pitiful – it ignored and refuted the evidence, instead outlining how it will continue to push forward with policies that have very little regard for the people who depend on them for support.

27th January 2021

Becca Stacey, Policy and Campaigns Officer 

It is inexplicable that benefit payments are slower today than they were thirty or forty years ago, and Z2K was therefore pleased to see the Committee recommend the introduction of a starter payment for all people claiming UC for the first time, equivalent to three weeks of the standard allowance, and for those moving from legacy benefits to UC a three week run-on of their legacy payments – including tax credits – to ensure a seamless transition (and a starter payment if that is not possible).

While, as we outlined in our response to this inquiry, our preference would be that people receive their first UC instalment within one week of the initial claim, not in the form of a loan, but as their first payment, these starter and run-on payments would help alleviate the financial and non-financial difficulties people face during the wait for a first UC payment. They would also protect people from getting into debt by taking out an Advance Payment – we successfully challenged the Department for Work and Pension’s (DWP) claim in their 2019 UC Metro ad campaign that it’s a myth you have to wait 5 weeks for a first payment, with the Advertising Standards Authority upholding our complaint that these adverts were “misleading” and ordering DWP not to publish them again.

The Government’s response to this report, however, didn’t acknowledge the extensive research featured in the report on the link between the five week wait and rising reliance on foodbanks, spiralling rent arrears and increased psychological distress. It instead stated that there is ‘no need’ for a starter payment, and refused to conduct or commission any research on these links. As Chair of the Work and Pensions Select Committee Stephen Timms said, “it’s astounding that the Government won’t even look closely at those findings, let alone do anything about them.”

Among other recommendations, the Government also rejected many of the Committee’s calls including; to extend the £20 weekly increase to UC beyond April 2021; to change the way that historic tax credit debt is clawed back from people when they move to UC; and to introduce the extension to the repayment period and lowering of the deduction cap sooner than planned, with a further reduction of the deduction cap to 10% and a stop on deductions taken in excess of the cap.

It’s very concerning when the Government point blank refuses to engage with evidence from those providing front-line support to the people bearing the brunt end of its policies, and rejects and even ignores a Select Committee’s recommendations on how best to alleviate the issues this evidence flags.

In our evidence to this inquiry we provided accounts from our clients who have suffered as a result of; the long wait for their first UC payment; Advance Payment repayments; incorrect DWP decision making and maladministration generating further delays to them accessing support; and the impact of the Benefit Cap and deductions. We are deeply disappointed with the Department’s refusal to engage meaningfully with these and the accounts many others put forward in their submissions, and the growing body of evidence on the serious problems caused by design and operational features of UC.  In fact, both ministers and senior officials appear to be in complete denial.

These inadequacies are only going to become more pressing as those on legacy benefits continue to be pushed onto UC, and the easing of the furlough scheme results in further increases in the number of people claiming UC. As we see all too often with our clients, those moving from legacy benefits to UC risk financial loss and harm as a result of the inadequate UC system, and it is for this reason that we strongly disagree with Therese Coffey’s statement at the last DWP Questions that people on legacy benefits should make the switch to UC. Until the reforms outlined in our recent ‘Blunt, Bureaucratic and Broken’ report are implemented, which were echoed in our submission to this Select Committee inquiry, we don’t believe UC is capable of adequately supporting many of the people currently on legacy benefits – especially those in the ESA Support Group who constitute some of the members of our society in the most vulnerable situations.