Universal Credit is intended to simplify the benefits system and make work pay, but in reality looks likely to be an expensive and bureaucratic shambles. Far from revolutionising the benefits system, Universal Credit will achieve little more than changing a few names and moving around responsibilities. So Housing Benefit is to be renamed ‘Housing Element of Universal Credit’ and will be processed centrally, whilst Council Tax Benefit will be placed in the hands of Local Authorities giving council busy-bodies unprecedented powers to make savage cuts.
This is all to be done the most expensive way possible, as the DWP abandons everything which has gone before and starts from scratch. Yet perversely the new legislation is littered with real cuts to the incomes of those with least, perhaps suggesting the true direction of the policy.
Tax Credits, currently paid to those with children, or who are self employed, will now be processed on a monthly basis. This will create an administration nightmare for both self employed people and small businesses alike. And all benefits will be delivered digitally by default, a move which is set to see Jobcentres closing their door around the UK.
Under this regime a cash in hand economy will thrive as casual workers, and those that employ them, will both have a huge incentives to keep everything off the books.
With no more Jobcentres, the DWP’s key weapon in preventing fraud will be lost. Jobcentres have been known to force people to attend daily to sign on should they have fallen under suspicion of fraud (or even of not trying hard enough). Signing on by smartphone or internet will see the end of Jobcentre’s over-used powers in this area.
What is unknown is what factor human contact plays in whether people accurately report financial circumstances to the DWP. It is far easier to lie to a machine after all. For those who aren’t online at home, it may soon prove too much of a temptation to not declare a couple of days work, something which now is easily accommodated under Working or Child Tax Credits. Accurately reporting small earnings will now mean not only losing some benefit, but also having to trek to an internet cafe and navigate what is set to be the most complex database monitoring citizens ever introduced.
Some employers will no doubt feel the same way and offer cash in hand work to bypass their monthly commitment to report all earnings back to the DWP.
Iain Duncan Smith has claimed Universal Credit will reduce fraud. For those with a criminal mind, a quick glance over the proposed new rules will reveal them to be full of lucrative holes. A benefit fraudster’s charter perhaps. And I’m not going to spoil anyone’s fun by pointing them out. But this only highlights just how much Iain Duncan Smith has overlooked what has gone before with his arrogant zeal to return to year zero.
The benefits system as it currently stands is indeed complex. So complex that Iain Duncan Smith doesn’t understand it (although benefit claimants themselves usually manage to suss it out). One of the reasons for the complexity is because, over the years, it has been butchered to either strip away benefits, or to prevent fraud. As new loopholes have emerged, new sticking plasters have been put in their place. It has been crude, but fraud and error levels have remained surprisingly low at just 2% of expenditure.
Iain Duncan Smith is about to rip up over fifty years of anti-fraud development within the welfare system which is to be replaced with his own crackpot schemes that he came up with after skim reading the Daily Mail. Meanwhile the monstrous snooping IT database which underpins the plans appears to be developing cracks before even getting started.
Chaos will reign and it will be the poorest who suffer as benefits go unpaid, IT systems don’t work and staff are unprepared. Fraud will soar as Universal Credit is bombarded with challenges already beaten under the old system and those yet to be discovered under the new.
That no-one has put the brakes on IDS reveals Cameron’s terror at the prospect of civil war within his own party. Universal Credit couldn’t be better timed for the upcoming shambles to dominate the headlines in the run up to the next election. That a fucking moron like Iain Duncan Smith can be allowed to play havoc with millions of lives may yet prove to be the final undoing of this toff Government.