DWP ‘adrift from the real world’ over Universal Credit

As if to reinforce the damning accusation from a key Commons committee, DWP minister Alok Sharma denies that rise in food bank use is solely down to UC roll-out.

Alok Sharma

A culture of denial and defensiveness permeates a DWP “disturbingly adrift from the real world”, fostering an indifference to the hardship caused by Universal Credit, a Commons committee has found.

Despite the evidence outlined today (Oct 26), Employment minister Alok Sharma only reinforced the accusation to say UC cannot be solely blamed for the rise in food bank use in areas where the benefit is being rolled out.

Sharma – criticised for complacency when quizzed over UC by the Commons Work and Pensions Committee last week – is named on a list of Tory MPs who could lose their seats over UC.

In a report, the Commons public accounts committee (PAC) warned the government had ignored the concerns of those affected by UC with the “fortress mentality” of the DWP preventing recognition of extreme hardship.

Challenged on this Sharma went into denial, citing the now customary Tory reference to how happy DWP staff are at the ‘reform’.

On the defensive, Sharma repeatedly refused to be drawn on links between UC and rising food bank use, saying there were “very many reasons” why people used food banks.

PAC took evidence from charities and councils of sharp increases in rent arrears and food bank usage among new recipients of universal credit, not least because of the five-week wait for the first payment.

The DWP’s own survey found 40% of people were experiencing financial difficulties eight or nine months into their claim, and McVey, the work and pensions secretary, recently admitted the roll-out would leave “some claimants worse off”.

PAC said the DWP had repeatedly been unresponsive to on-the-ground evidence about the practical problems with UC and what it called the “unacceptable hardship” faced by many claimants.

“The department’s systemic culture of denial and defensiveness in the face of any adverse evidence presented by others is a significant risk to the programme,” the MPs said, citing the DWP’s response to an earlier critical report by the National Audit Office.

McVey was forced to apologise to parliament earlier this year, when the NAO’s head, Sir Amyas Morse, complained that she had misrepresented the report as positive, when it had called for a “pause” in the roll-out of UC.

Several of the organisations that gave evidence told the committee they had a positive relationship with local jobcentres, but found it impossible to influence the DWP nationally.

PAC chair Meg Hillier said the report offered “further damning evidence of a culture of indifference at DWP” with the department “disturbingly adrift” from the real-world problems of those it was there to support.

The Chancellor has been urged to pump £2bn into shoring up UC as soon as next week’s Budget by reversing cuts to work allowances that determine how much claimants can earn before their benefits are clawed back, for example.

The committee said the help available to people moving over to UC – so-called Universal Support funded by the DWP – but commissioned by councils is not fit for purpose because it does not include basics such as debt advice.

By June this year, 980,000 people were on UC, with another 7.5 million due to move over to the new system.

So far, only new claimants, or those whose circumstances have changed, have been moved on to UC.

The government recently delayed so-called “managed migration”, which will allow existing claimants to be moved across, from January 2019 to later in the year, apparently because it feared being defeated by backbench rebels in parliament if it tabled the necessary regulations.

PAC also criticised the DWP’s claim that switching to UC will save taxpayers up to £8bn, by coaxing more people back into the workforce. It said the numbers cited were “purely hypothetical” because the department cannot say how it will measure whether the target has been hit – or how many of those moving into work would have done so under the old system anyway.

Sharma is amongst dozens of Tory MPs with constituencies where the number of UC claimants is bigger than their majorities – putting seats at risk.

Campaign organisation 38 Degrees also has Iain Duncan Smith – so-called ‘architect’ of UC – on the list, with leading Tories like former Home Secretary Amber Rudd and ministers including Secretary of State for Wales Alun Cairns and Environment Minister George Eustice.

All the Tories named have constituencies where the number of UC claimants is bigger than their majorities.

Charlotte Woodworth, Campaigns Director at 38 Degrees, said: “Our analysis found that in 22 Conservative-held constituencies, the number of people who could see their income reduced is five times greater than the majority of the current MP.

“Our calculations found that if just a fifth of those affected are Conservative voters who switch their vote the could be in deep trouble.”

Commenting on the report Sally Thomas, SFHA Chief Executive, said: “I may not go so far as the claim by Meg Hillier MP, Chair of the Public Accounts Committee, when she says of  the DWP that it has an “apparent determination to turn a deaf ear to the concerns of….frontline organisations”, as the SFHA has seen positive and welcome moves from the Department such as the development of a landlord portal system and scrapping of the seven day wait before a claim can be made; the enthusiasm and commitment of staff in local Job Centres to support claimants into work is also to be commended.

“But the JobCentres have no influence over the operation of Universal Credit payments. The reliance of the DWP’s direct payments to landlords on a four weekly system that was not designed for monthly Universal Credit payments puts an incredible and unnecessary burden on housing associations’ rent management which also denies claimants the comfort of being secure in the knowledge that their rent has been paid.

“The SFHA along with housing federations in England, Wales and Northern Ireland have set out five key changes that need to be made to enable Universal Credit to work both for claimants and stakeholders. We would urge the DWP to heed these asks and implement the changes to prevent further significant harm.”

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