Moving Universal Credit from Theory to Practice

The theory of Universal Credit is an idea whose time has come. For the past 50 years a relatively simple benefits system has been subverted by complicated schemes, credits, and rebates given by 3 or 4 different bodies and often 2/3 different parts of different bodies. If someone comes into my advice centre needing help with benefits I cannot now assist. I refer them to a specialist provider such as the Council or CAB.

The basic idea that one calculation will provide a level of either benefit or taxation is admirable. We pursued it in the old Liberal Party for years and called it a negative income tax. The idea that people should be able to manage their money and control their expenditure is again a sound one. Many people in receipt of benefits do not understand them, have no control over them and crucially, have no idea about what would happen if their circumstances change. They know that change is difficult; that getting a job could imperil their rent or mortgage payment and so some choose the safe option and do not look for work.

At the same time it is right to make people less dependent on benefits by increasing their income. I welcome the fact that old age pensions will be increased to approximately £144 a week. This will take many people out of means tested benefits. I am delighted that the amount of tax that will be paid by people on the minimum wage will be massively reduced. Why pay people money, tax it and then give it them back with a loss of control and the creation of a bureaucratic state.

So you might have deduced from this that I am generally in favour of the principles that are being followed by the Government but I am very unhappy about the implementation.

The principle is that people should manage their own affairs. Very good but could you do that? I certainly couldn’t. I rely on the bank to do it for me by signing direct debits and standing orders. The bank is happy to do this because it can make money out of me and people like me in a variety of ways. If you had to rely on me paying the mortgage and the electricity bill every month then I would either have been evicted long ago or would be living in a very cold and dark house. My estimate is that up to £2,500,000 people who need a bank account to deliver under the new system have not got one and the way that the Government is going to help them will not work.

The Government is, apparently, thinking of subsidising a cheap and basic account for a year to ‘wean’ people into banks. Almost all the people I have spoken to regarding this suggest this is a wrong use of the money. They would prefer people to pay fort heir own account, providing the price is reasonable, and use the £145 million for advise and support. Perhaps that is what the Government thinks as well. The tender to provide such a service was due out last October, November and then this Month. Well there are still two days left!

The next problem that the Government has got is that it is unlikely that they can get their IT ready in time. This is not a gratuitous pop at the Government. No central government has been able to procure IT contracts on budget and on time. Look at the Health Service; look at the CSA; look at defence procurement on IT – all over budget and out of time. We simply cannot afford to make mistakes on this IT because too many people will be dependent on it for pay-outs which will enable them to purchase or not purchase essential items of food, warmth and shelter. The opportunity for chaos is manifest.

The Government have failed to localise service decision-making and service delivery. I was talking earlier today to the C-Exec of a large housing association. His appeal to the Government is to let organisations like theirs choose the migration path from existing system to UC for their tenants. A managed system in which people who know benefits users take responsibility for moving people over and helping them with advice and support at the same time MUST be better than a central programme, based on birthdays or alphabet which will be the decision process if made by a central government commissar.

Lastly, they must moderate their language if they are to get a buy in to the process. Shirkers versus strivers is not only an appalling use of language but also untrue. So many ‘in work’ benefits are paid out because of the deskilling that has taken place. If you only can work 37.5 hours per week on the minimum wage it is almost certain that you will need help with housing benefit. Even if you juggle with two jobs then it is still highly likely that you will need help with housing and other benefits. Particularly half witted is the so-called bedroom tax. People are being punished for not moving to a smaller house – especially when their children have grown up. The fact is that many people would love to move to a smaller hose or flat BUT there aren’t any. In the 50s, 60s and 70s whole towns of up to 5,000 properties were built with 3 bedrooms and no other unit sizes. So people cannot move unless they want to cut themselves off from the communities they have lived in where their friends live and where their memories exist of the lives that they have led.

Which Government has ever set out to deliberately break up communities except for so-called slum demolition? This Government has not set out to do this but its widespread ignorance of people on benefits has led them to make a wide series of wholly inaccurate opinions on whose those people really are.

So 10 out of 10 for direction; 7 out of 10 for effort; 3 out 10 for clarity of objective; but (and this does only apply to part of the Coalition) 1 out of 10 for getting your facts right! At least they are trying. Labour ducked out of major changes to a deeply flawed system for 13 wasted years.

About richardkemp

Leader of the Liberal Democrats in Liverpool. Deputy Chair and Lib Dem Spokesperson on the LGA Community Wellbeing Board. Married to the lovely Cllr Erica Kemp CBE with three children and four grandchildren.
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1 Response to Moving Universal Credit from Theory to Practice

  1. chris says:

    good one Richard

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