Universal Credit: A Good Idea Broken

The Benefits system in the UK was a messy shambles after The Labour Parties 13 years in power. Working Tax Credits distorted the wage market; and if you had the misfortune to need to rely on the social safety net through sickness or lack of money then you would need to negotiate a level of bureaucracy that would tax even the most experienced administrator of government bullshit. I had the misfortune to rely on the social safety net back in the 00's and I remember getting the Job Seekers Allowance but having to wait 16 weeks for housing benefit and separately for council tax support. Phoning these centers was a long wait only to be told there is nothing you can do to facilitate the progress of the claim. Wait and see.

Is a landlord supposed to understand that? The Council never did as their demands became ever more strident and threatening. 

 

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So when the Conservatives proposed rolling six means tested benefits into one, I thought what a fantastic idea. Simplify it, people only have to make a single claim, and the inefficient local government only have to process one claim. Sounds easy right? Might even be cheaper. It would introduce in Iain Duncan Smiths words, "Fairness and Simplicity". People would not be penalised for getting a small amount of work, nor be punished for getting into the workplace by losing money (make work pay). A system that does not appear to exist purely for the purpose of making a persons life hell should they be unfortunate enough to need to use the social safety net.

Of course, it wasn't going to be that easy, of course.

They continued and expanded the system of penalisation, making incentives for job center staff to sanction someone's benefits, even if it was for attending a job interview instead of an appointment or having a heart attack.

The man (IDS) is an enigma, I've always liked his responses and general ideas but when you actually see it in practice he does seem to epitomise the idea of "The Nasty Party". Which is why bundled in with all of the reforms was slave labour exploitation of unemployed working in Poundland for so-called work experience.  
 

While I do not like James O'Brien for his dishonest handling of the Brexit idea this interview is brilliant. The dishonest defense that it is the government responsible for people finding work offends any vestiges of my old libertarian self. The government doesn't create jobs and should not take credit for the creation of jobs or getting people jobs. They are responsible for a disastrous welfare system, that punishes people arbitrarily and probably impedes them finding work rather than helping them find work.

His response to a woman who was not being paid for stacking shelves, he said she was getting paid, taxpayers were paying it. Workfare is government sanctioned slave labour.

However his vision of Universal Credit is not quite what we have now, it was taken and put through a ringer by the treasury, it came out the other side as a very different beast.

 

Universal Credit, the big issues

1. Fairness and Simplicity

Sanctions still exist, incentives to sanction claimants still exist. It isn't simple since you wait endlessly to get paid and are not paid from the day you claim. Added complexity leads to sanctions which lead to hardship claims which need to be managed. It leads to foodbank usage, leads to evictions which put more strain on local government housing departments who cannot let someone go homeless particularly not if children are involved. 

And it is not as simple as just managing your claim. There are now work-related groups, with set tasks and profiles. Work Focused Interview Group requires regular meetings with a work coach. Work Preparation Group requires regular work coach meetings and training activities like writing a CV or getting workfare "work experience" the aforementioned slavery. All Work Related Activity Group, well god knows what this one is about, and I can't figure out how it is different. 

The joys of a simple system?

We’re so understaffed that case managers going on holiday can have a significant impact on claimants. These claimants are completely neglected, sometimes for many weeks, as colleagues are told to only send out payments for the people they manage themselves. In other words, if the person who’s looking after your universal credit payment takes some annual leave, you could be left penniless by accident.

This isn't just more complex for the claimant, but the case manager too. Most case managers feel overwhelmed with their paperwork and interaction per claimant increased through online interactions. This backlog results in non payments due to holiday or increased case load, it isn't automatic that a claimant is paid.

 

 

2. Proposed Cost Savings

Costs per claim under the old system were 699, it is said that the new system will end up costing even more. Which is not a surprise given the complexity of the new system. 

The notion that it would cost 124 per claim by 2024 is not just ludicrous it is sounding like a fantastical lie.

3. Encouraging People To Work More 

Part of fairness and simplicity was not penalising people on part-time work for working extra hours, to abandon the old arbitrary 16-hour limit before all benefit is scrapped. Instead, a part-time worker is made to essentially become a UC claimant, they will enter into the aforementioned work-related groups. Their claims come attached with incentives for them to increase their hours. If they do not fulfill the criteria set by the caseworkers (who are incentivized to sanction them remember) then they will be sanctioned.

4. The rollout Process

It has already finished, did you not know? It was finished back in 2017. Except it wasn't because as a traditional Tory voter my biggest criticism of them has been that since 2010 they have been utterly incompetent in almost everything they have attempted. No one can give a date when the implementation of this reform will be completed. 

5. Self Employed Claimants

The Gig-economy has led to a surge in self employed numbers, often earning less than minimum wage but it is better to work a little than not at all, right? Not under this system where claimants lose between 2000 and 4000 a year.

Frank Field said, “Given what we now know about the hundreds of thousands of workers in the gig economy who earn less than the national living wage, it begs the question as to how many grafters and entrepreneurs are going to be further impoverished, or pushed deeper into debt, as a result of this new hole being opened up in the safety net.”

Citizens Advice maintains that it risks “creating or exacerbating financial insecurity for the rising sector of the workforce in non-traditional work”

Is there any way to fix this?

Quite easy to start fixing it, creating a system I like might be harder.

  • Pay within 2 weeks of claiming, as they used to do. 
  • Stop all sanctions except for not turning up to sign on as they do not do anything they propose to achieve turn job centers into places designed to help people not punish them arbitrarily. Give them a positive purpose not a negative one.
  • Abolish all work groups and make training voluntary, reduce caseloads and bureaucracy and costs as was initially proposed.
  • Raise work allowances so people can earn more money before they lose pay and stop forcing them to sign on if they work part-time
  • Stop treating jobless people as the enemy

This is a reasonable start though far from fixing all of the problems.  But some obvious first steps to fixing the issues.