Universal credit: six-week wait key obstacle to its success, MPs say

The Guardian - 26 Oct 2017

The six-week wait for benefit payments under universal credit is a major obstacle to its success, an influential parliamentary committee has said, putting further pressure on the government to make changes to the flagship welfare reform.

Theresa May has faced weeks of criticism over the rollout of universal credit from Labour as well as Conservative backbenchers and calls for a review from the former prime minister John Major.

Key to the criticism is the mandatory six-week wait for payment which is imposed on claimants, which the government says is aimed at mirroring the wait for a paycheque if the claimant were in work.

About 8% of current benefits claimants are on UC, which will increase to 10% by the end of January. The rollout is due to be completed by 2022.

On Thursday, the cross-party work and pensions select committee said there was evidence the six-week wait was causing “acute financial difficulty”.

In its conclusion, the report said: “The baked-in six-week wait for the first payment in universal credit is a major obstacle to the success of the policy.

“In areas where the full service has rolled out, evidence compellingly links it to an increase in acute financial difficulty. Most low-income families simply do not have the savings to see them through such an extended period.”

The work and pensions secretary, David Gauke, has said jobcentres would flag to applicants the availability of emergency advance payment loans, which the committee said were “not a solution to a fundamental flaw in the current design”.

The report said the six-week wait for payment could not be said to be similar to working. “Universal credit seeks to mirror the world of work, but no one in work waits six weeks for a monthly paycheque,” it said.

The Conservative MP Heidi Allen, a member of the committee who has been one of the most vocally critical of the scheme, said there was support for universal credit as a concept, because it simplified the benefits system, but said the six-week wait did not honour the reform’s true intention.

“To truly represent the world of work, the payment cycle must mirror how the majority of people are paid, ie monthly,” she said. “Universal credit will only be the success it deserves to be if it works with claimants to find work, and not against them.”

The committee’s chair, the Labour MP Frank Field, said the waiting period was cruel and no minister had been able to give adequate justification.

“Such a long wait bears no relation to anyone’s working life and the terrible hardship it has been proven to cause actually makes it more difficult for people to find work,” he said. “It is not too late for the government to avert a Christmas disaster. They must act now.”

At prime minister’s questions on Wednesday, May defended the gradual rollout of the policy which she said allowed ministers to test and learn from how the system was working. However, the committee said while universal credit had “great merits as an idea” the gradual rollout should not be seen as a just a “technical exercise”.

“Flaws in the design, operation or implementation of UC, however temporary, can have very serious consequences for individuals and families,” the report said.

A DWP spokesperson said: “Universal credit lies at the heart of our commitment to help people improve their lives and raise their incomes. It provides additional, tailored support to help people move into work and stop claiming benefits altogether.

“The vast majority of claimants are paid in full and on time but no one who needs support has to wait six weeks. When people apply for universal credit they are advised about the maximum advance they can receive, and that they can repay over six months. Once we know someone needs an advance, they can get it within five days or on the same day if they are in urgent need.”

Jessica Elgot, The Guardian