The Department for Work and Pensions (DWP) has revealed a horrific fact about Universal Credit. The department said that it has never checked if part of the benefit leads to poverty. But there’s more to this story than meets the eye, as the DWP’s failures actually stretch back nearly a decade.
More DWP chaos?
As CommonSpace reported, campaign group Poverty Alliance made a Freedom of Information (FOI) request to the DWP which asked a few questions. Some of these were about the five-week wait Universal Credit claimants have. This is the usual time it takes the DWP to give people their first payment. The Poverty Alliance asked for the DWP to give it:
The DWP’s answer was short. But it was also to the point:
Having searched all our records, I can confirm that we do not hold the requested information in respect of the five week wait.
Read on...Support us and go ad-free
So it seems the DWP has not looked at how claimants’ five-week waits for cash might affect them.
Poverty Alliance chief Peter Kelly told CommonSpace:
It is astonishing that almost a year after then Work and Pensions Secretary Amber Rudd admitted that delays in accessing Universal Credit could have been responsible for rising foodbank use that the UK Government is still not assessing the impact of the wait on the staggering levels of poverty in this country.
An MP steps in
Since the FOI, an SNP MP has asked similar questions of the DWP and received similar answers. Neil Gray asked the DWP “what assessment” it had done of the impact of the five-week wait on claimants. He asked about its impact in these areas:
He also asked the DWP if it had looked at reducing the five-week wait.
DWP parliamentary under-secretary Will Quince gave stock answers. He said “no one has to wait five weeks” for money. This is because claimants can ask the DWP for an advance. Quince said the DWP’s excuse for the five-week wait was that it:
has learnt from where we did not get things right in the past in the legacy benefit system. Too often, the desire to pay quickly meant claimants not receiving their correct entitlement as we did not have an appropriate timeframe to review household circumstances.
In other words, before, the DWP was either over- or under-paying people. So now, it just gives people loans, getting them into debt. The DWP will give people an advance on their first payment which can be up to the full amount. It will then deduct this money from future payments. Repayments for the advance are spread out over 12 months. So people actually end up worse off in the long run. But this part of Universal Credit has also hit the headlines.
In debt to the DWP?
As the Mirror reported, the DWP got £50m in one month from claimants paying back advances. It also got another £44m from payment mistakes, arrears and fines. SNP MP Chris Stephens told the Mirror:
This is an incredible sum. The figures lay bare that the five-week policy simply isn’t working, it just drives people further into poverty.
The DWP is removing £50 million from people each month to pay for its own ridiculous policy of making them wait weeks and weeks and weeks for Universal Credit.
Unless the DWP moves to a policy where benefits are paid promptly the queues for food banks… across the country, will continue growing.
The DWP gave the Mirror the same stock answer as Quince: “nobody needs to wait five weeks”.
But the issue of the five-week wait runs deeper than just the FOI. It also runs deeper than Gray’s questions. And it shows that the DWP never cared to think of the impact the wait could have, even before it rolled out Universal Credit.
Back to 2010… and 2011…
Government departments must do “impact assessments” (IAs) before they roll out new policies. These check how new policies or laws will impact on anyone affected by them. The Canary analysed what seems to be the DWP’s first and second IAs. It published these in December 2010 and October 2011. The forms did not mention first payments.
Then, we analysed the DWP’s third IA, which was published in November 2011. The form made no mention of how a delay in the first payment would affect people. The only point it made about money problems was:
There will be some areas, such as… frequency of payment, where more support may be needed and the Department will continue to look at the best way of delivering that…
The move to single monthly household payment is a significant change to the way most benefits are currently paid and will require some adjustment for many claimants, including those with a disability. Personal budgeting support will be available…
But it also made clear that claimants’ money problems were not its concern:
The Government wishes to place responsibility for household budgeting with the household …
After four IAs, Universal Credit became policy in 2013. The regulations for it passed into law. And the DWP did this without even checking how payment delays would hit claimants.
The DWP says…
The Canary asked the DWP for comment. We wanted to know why it never looked at the wait for first payments in any IAs. A spokesperson said:
We spend over £95 billion a year on working age benefits and Universal Credit supports more than 2.8 million people across the UK. It gives people financial help if they’re unemployed, low-paid or unable to work.
People can get paid urgently if they need it and we changed the system so people can receive even more money in the first two weeks than under the old system.
But this answer still does not deal with the five-week wait. Meanwhile, the impact of Universal Credit on already-poor families is stark.
Making poverty worse?
The Child Poverty Action Group (CPAG) thinks changes to benefits will plunge another 100,000 children into poverty by 2023/24.
Meanwhile, the Joseph Rowntree Foundation (JRF) estimates that, under Universal Credit:
5.1 million people in working families are expected to see a reduction in income
Also, it says that:
1.7 million people living in poverty in working families… face a substantial reduction in income, on average £2,500 a year.
Contempt for claimants
The DWP’s lack of care over the impact of first-payment delays spans a decade. Time and time again, it’s had chances to check the effects on claimants. But perhaps the most damning part is that the DWP knew claimants were having problems. Its own survey of claimants back in 2017 showed this.
The survey found that only 25% of claimants said they were “keeping up with bills… without any difficulties”. In total, 72% either struggled from “time to time”, struggled constantly, fell behind, or were having “real financial difficulties”. Across most measures, the benefit hit sick and disabled people the hardest. Yet still the DWP did nothing.
In failing to address the impact of Universal Credit, the DWP has just cemented the notions about its failings. But more than that, it’s shown utter contempt for claimants.
Fund our Investigations Unit
You can help us investigate corruption, expose injustice and uncover the truth.
As one of the only independent investigations units in the country, we work for you – but we need your help to keep going. We need to raise £10,000 to continue our groundbreaking investigations. Can you chip in?