Sliding Towards Disaster, How Universal Credit Is Already A Failure

Two reports have been released by the DWP this week which show that Universal Credit is fast becoming the toxic mix of poverty, insecure work and demoralising Jobcentre harassment that many feared when plans for an overhaul of the benefit’s system were first proposed.

At first glance one of the evaluations, which examines how many people have found a job after a period on Universal Credit (UC), appears to show a rosy future. Claimants on UC were 8% more likely to have had some work nine months after making their claim than those on Jobseeker’s Allowance (JSA), the benefit which it is due to replace. However this does not tell the entire story.   Whilst UC claimants were more likely to have had a period of temporary work during the evaluation period, they were only 3% more likely to actually be in work at the nine month point. Also, and significantly, whatever work it was that they were doing, it didn’t earn them much. UC claimants earned around £80 more in the nine month period than those who made a JSA claim at the same time – less than two days wages on the minimum wage, despite on average working for 12 days more. Whilst the researchers warn, not unfairly, that the data on days worked and earnings is not as robust as that on job entry rates, if this result was replicated on a national scale then Universal Credit would be a disaster.

There is no real saving to the tax payer in people earning an extra eighty quid over nine months – especially if they are only marginally less likely to be unemployed at the end of it than those on the current system. Astonishingly the government’s long term spending plans are based on Iain Duncan Smith’s magical belief that changing the name of the dole and slightly upping the amount of Jobcentre harassment will cure structural unemployment for hundreds of thousands of people. As such lots of money will be saved, particularly in Housing Benefit payments. These results show that is not likely to be the case.

And it gets worse. The people studied in the evaluations were all single claimants with no housing costs, meaning they were probably living with family or friends. Most of them would be newly unemployed and therefore the most likely to move into work. In theory at least, it is far easier to take on (and declare) a couple of days work under UC than it is on the current system where working for short periods is likely to plunge your claim into chaos. The researchers themselves admit “some of the increase in the likelihood of becoming employed is due to UC leading to an increase in short-term work.”  What this means in practice is teachers and nurses stacking shelves in Poundland just to get the Jobcentre off their backs whilst the long term unemployed stay out of work.

This report by the way was the good news for Iain Duncan Smith. The second evaluation, which included looking at the impact of Universal Credit on those with housing costs, provides a chilling glimpse into the future of the UK’s social security system.

This study compared questionnaire responses from Universal Credit claimants with those claiming Jobseeker’s Allowance. Participants were questioned twice, at five and a half weeks after first making their claim and then, for those that agreed to be contacted again, three months later. The results of the first wave of responses have previously been published and this report confirms the trends of the first.  Once again most people thought much of the ‘work related activity’ they were required to carry out as part of a UC claim was a waste of time, probably not achievable and did not take into account their personal circumstances. Despite this almost all were aware they could be sanctioned if they did not jump through the endless petty requirements to provide evidence they had been looking for work for 35 hours a week. Some even suggested this was detrimental to their job search: “What’s more important writing notes [for the Jobcentre] or preparing for an interview?.”

Whilst this evaluation was mainly concerned with the experiences of those claiming UC it also recorded how many people had successfully gained work, although it points out this is a ‘descriptive overview of working status’ rather than a measure of the impact of Universal Credit. But then they would say that wouldn’t they. Especially when the evaluation found that not only were employment rates almost exactly the same for UC and JSA claimants (at 41% and 40%), but that those on the current system were significantly more likely to be working full time than those on Universal Credit. 55% people in employment after claiming JSA were working over 35 hours a week by the time of the second questionnaire compared to 48% of UC claimants. So when those in rented housing are taken into account then Universal Credit is worse at helping people find full time work than the current system.

It still gets worse. Whilst the chances of finding a decent job on Universal Credit are dismal then the experiences of many who have claimed range from tragic to laughable.

The implementation of 35 hours a week enforced job search as part of the Claimant Commitment which underpins Universal Credit is revealed to be a farce by the evaluation. Claimants did report spending more time on job search than those on JSA, but they actually applied for slightly less jobs on average. It appears that if you fill in job applications really, really slowly then that will help maintain your benefit conditionality. For the technologically skilled this requirement is bizarre – one survey respondent pointed out that by setting up job alerts and using online applications they could apply for 50 jobs in a couple of hours so the requirement to spend 35 hours job searching was fruitless. Others claimed a lack of local jobs in the area made this demand impossible “there’s only so many people you can go and see in a week, and then the next week you’re struggling… you are going to run out of places to go and people to ring”.  Some pointed out they did not have the money to constantly visit employers to hand in CVs or use internet cafes as they were required to do to avoid a benefit sanction.

All that this unachievable and draconian conditionality is likely to do is shatter people’s confidence and sadly even this was borne out by the research. After around five months claiming benefits, 28% of Universal Credit claimants did not believe they were likely to get a job within the next three months compared to 19% of of those receiving Jobseeker’s Allowance.

It is not just people’s confidence that is demolished by Universal Credit, but also their finances. The five week waiting period for the benefit led to almost half of UC claimants with housing costs falling into rent arrears by the time the first survey was carried out. Some had even been taken to court by their landlords and were likely to be staring eviction in the face. As survey respondents pointed out, the loss of a job is a big enough financial hit to take without having to wait over a month for housing benefits to be processed. Even three months later some had still not caught up with rent – UC claimants were five percentage points more likely to be in rent arrears than those on JSA by the time of the second survey. The so-called budgeting support available for claimants appears to have been met with a scathing response with one person pointing out they were quite capable of working out themselves what their monthly income and outgoings were. Whilst UC claimants were slightly more likely to ask for help with budgeting than those on JSA, the general attitude seems to have been they didn’t need better budgeting skills, they needed more money – or just some money for those waiting for their claim to be processed.

Even claiming the new ‘digital by default’ benefit seems to have been shambolic. 63% of those with housing costs who tried to claim UC online experienced at least one difficulty with over a fifth of those saying the website crashed.

To read the gushing press release that accompanied these reports you would think that Universal Credit was already a huge success. But the truth is very different. About the only real positive findings for the DWP was that almost everyone claiming Universal Credit was well aware they needed to waste hours of their time providing reams of evidence of job search to Jobcentres or they would be sanctioned. This isn’t helping anyone find long term sustainable work though.  For those with no housing costs and a high chance of finding work – young graduates living with parents for example – then perhaps it pushes them into low paid temporary work a little bit faster than the current system, although even the impact of this is largely diminished in the long term. For everyone else it is a disaster. Rent arrears, debt, and unemployed people’s confidence destroyed by constant Jobcentre harassment is the real consequence of government’s flagship welfare reform. And it will carry on getting worse when sick and disabled people or lone parents are pushed into an already failing bureaucratic nightmare.

Iain Duncan Smith has called the results of these evaluations ‘remarkable’. Billions more pounds is now set to be spent propping up this delusion as Universal Credit is extended to the 99% of out of work claimants who have yet to be transferred onto the new system. It has taken over five years to produce this mess. About the only remarkable thing about this shambles is that Iain Duncan Smith still has a job. Which is more than you can say for over half of those claiming Universal Credit.

The first evaluation is available at: https://www.gov.uk/government/publications/universal-credit-estimating-the-early-labour-market-impacts-updated-analysis

The second can be found at: https://www.gov.uk/government/publications/universal-credit-research-with-single-claimants-including-those-with-housing-costs

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