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Time to meet the challenge of Universal Credit

November 5th 2018

With the UK Government committed to rolling out Universal Credit, Victoria Winckler says it is time for the Welsh Government and others to step up to the challenges it raises.

Picture: Alamy. Please do not reuse this picture

Universal Credit has been in the headlines recently, and for all the wrong reasons. What was meant to be a game-changing, radical shake-up of benefits is now more often associated with stories about debt, food-banks and despair.

Despite this, there’s been little reprieve. The much anticipated ‘pause’ in the roll-out of the benefit to existing claimants has not been confirmed.  And while the reduction in the waiting time before the first payment and the increase in the earned income allowance are welcome, the fundamental challenges in the design of UC remain.

And if there are problems now, you ain’t seen nothing yet.

So far only 44,000 people receive Universal Credit in Wales. Citizens’ Advice Cymru estimate that by the time the benefit is rolled out completely, that number will increase to around 400,000 households. Imagine the problems that UC is already causing amplified more than ten-fold.

Universal Credit is of course not devolved. But many of the challenges it creates affect devolved policies and services, from housing to the economy to childcare to advice services to name but a few.  Our latest report explores these implications in more detail.

Take housing as an example

The impact of UC on social housing has been well-evidenced, with £1 million of rent arrears attributable to the benefit already. If rent arrears increase as the number of UC recipients increase, then it could well affect the ability of housing associations to finance new homes, which in turn affects the ability of the Welsh Government to meet its affordable homes target.  Arrears can also put tenancies at risk, resulting in evictions and increased homelessness – another devolved responsibility – and could well mean that private landlords are reluctant to let properties to UC claimants.

In other words, UC at best increases the demand for many devolved services and at worst drives a coach and horses through the Welsh Government’s targets and plans.

Finger-pointing does nothing

The Welsh Government has been highly critical of Universal Credit, with some justification in my view. However blaming the UK Government for a policy it dislikes whilst ignoring its effects in Wales is a bit like telling the tide not to come in.

It is time for the Welsh Government to step up its action

If the Welsh Government is to address the consequences of Universal Credit for a very sizable proportion of the Welsh population, including some of its most vulnerable people, it needs to take the lead. It needs to monitor the ongoing effects of UC, and it needs to co-ordinate and plan an effective response. it needs to think about how best to support people through a potentially difficult period, and where appropriate it needs to take account of UC in its strategies and plans.

Crucially, it needs to rethink its position on devolving some aspects of the administration of the benefit. Many of the difficulties associated with the benefit are not about how little money it pays, but about how it is paid. I can see no reason why the Welsh Government would not want powers to minimise the negative effects of UC on households, when it is going to be dealing with the consequences. These are administrative not fiscal powers, and if they’re OK for Scotland and Northern Ireland why are they not OK here?

How many more hungry and homeless people does it take?

Victoria Winckler is Director of the Bevan Foundation. 


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