Kafka on LSD couldnt have imagined the UC nightmare

Back in June 2010 when the HB and Welfare reforms were announced I have consistently argued that they won’t work and will cost more to the public purse.  As well as commenting on individual aspects of the under-occupation tax, the new shared accommodation rate and others I have been particularly scornful of Universal Credit (UC) and its stated purpose in political speak to ensure that ‘work always pays.’   It won’t do this and can’t do this even in theory I have said and I still hold that view.

In my most recent post on why Universal Credit can’t work on 30th January 2012 I included some new information on the operation of Universal Credit or how it will work in practice, which like most Coalition policy is only looked at after the pithy spin (work will always pay more, etc) has been decided.  In response to the latest announcement in the new impact assessment in relation to the overall benefit cap (OBC) – the £550 per week benefit cap for couples, £350pw cap for singles – which is a critical part of UC, I said:

“Section 3 on page 5 of the impact assessment says:

Initially the intention is that that cap will be delivered by Local Authorities through Housing Benefit payments. Ultimately it will be administered as part of the new Universal Credit system. Before the introduction of Universal Credit, this cap will apply to the combined income from the main out of work benefits, Housing Benefit, and other benefits such as Child Benefit, Child Tax Credit and Carer’s Allowance.”

The role of the Housing Benefit officers in this interim phase in each and every local authority will be crucial.  That aspect needs some very careful scrutiny and discussion and as yet in the plethora of media articles on the Welfare Reform Bill I have yet to see it discussed.

I said in January that the HB officer will need to know not only what benefits are currently in receipt for each claimant, but also what benefits each claimant could receive.  That places a huge burden and knowledge base on the individual HB officer as they are trained in HB regulations not the regulations and eligibility criteria for Child Benefit (currently universal but soon to change); Child Tax Credit (administered by HMRC); Carer’s Allowance (DWP) to name but a few.  HB officers hardly know the general needs HB regulations as they currently stand and much less on HB regulations as they apply to supported and exempt accommodation let alone a whole wave of new regulation and criteria on welfare benefits on top of a huge raft of new housing benefit regulations.

I am not decrying the ability of HB officers in saying that, although too few know too little about HB in supported housing but then again so does the DWP who don’t have a clue.  My point is that even the most knowledgeable most highly trained HB officer hasn’t a hope in hell’s chance of getting this right.  The HB changes alone are a huge added burden to them and when you add on the need for them to know about all other welfare benefits on top of this then Stephen Hawking couldn’t do it.

So many housing benefit and welfare benefit decisions and the majority of Universal Credit benefit decisions are going to be wrong- with massive consequences for all types of claimant.  When you factor in that 75% of new HB claimants since the election are in work according to official DWP figures it’s not just the feckless/workshy claimants that will be affected but all claimants of all benefits.  Let’s also not forget that this interim period of the operation of UC will feed into the new all-singing all-dancing IT system which we are told is to be administered centrally and not at a local level!!  Kafka couldn’t have imagined the scale that this nightmare will see.

I haven’t mentioned working tax credit (WTC) yet either and this is just as significant as those in receipt of it are exempt from the overall benefit cap of £500/£350 per week if currently they work 16 hours per week or more. That is to change to 24 hours per week to qualify for WTC.  Yet as I stated in a previous post over £8bn per year of WTC goes unclaimed, as does well over £6bn of Housing Benefit go unclaimed.

I return to the point above as this interim system of UC sees a system in which a HB officer must consider what benefits are being received and what should be received but aren’t before making a decision on Universal Credit.  The same HB officer must have to advise the claimant to claim HB, WTC and every other benefit he or she is eligible to claim!  Just those two benefits alone will see the overall benefit bill rise by £15bn – alone an 8% increase in the overall benefit bill.

The same HB officer, as now, must show in his workings what he has considered as part of the UC decision in writing!  That’s for you lawyers out there who must be rubbing their hands with glee at this and not for IDS and the Coalition who will have multi-millions if not billions added to its costs of defending appeals on its maladministration of deciding UC claims – claims that even Stephen Hawking’s brain power probably couldn’t do accurately!

Of course while this Kafkaesque nightmare is ongoing the loss of jobs and loss of homes through evictions for arrears will add hugely to the government costs.  Tenants, working or not, will be shafted by this.  They will also be shafted because social landlords are increasing their provision for bad debts as Inside Housing reports today just as I argued they would have to do here a few weeks ago when I argued this is a vicious circle:

“And here’s the reality – the vicious circle of Coalition incompetence

Landlord increase rent levels to pay for likely greater arrears. This leads to under-occupying tenants having to find even more per week as the £14pw figure above increases to £16pw. The result is greater arrears by the landlord. The landlord in turn has to increase rents to reflect this bad debt, which in turn sees the under-occupying tenant having to now find £18pw in place of the £16 which was £14pw. Arrears increase which in turn …ad infinitum!

All the while of course as social landlords have to reduce services to tenants due to this added risk and leaving them with no option to just deliver core services and not the added frills as Anne Power argued this week.

And just as I’m drafting this I see CIH has released an article on the dangers and risks of moving UC to a centralized system of administration.  My points above that (a) no-one is looking at this interim system; (b) that this interim system forms a basis for designing the IT system of the new central system need to be viewed in that light and are substantiated.

The impact on every benefit claimant in work or not will be disastrous.  The impact on the cost to the overall benefit bill will be huge.  The interim system put in place by this Coalition after the fact couldn’t work even if Stephen Hawking’s DNA was injected into every HB officer. It’s not even worthy of calling it a dog’s breakfast and Kafka tripping on LSD couldn’t have imagined the nightmare the interim UC period will be.

UPDATE Monday 26th March

Sir Humphrey – in the form of Robert Devereaux, Permanent Secretary at the DWP and Bob Kerslake, the Head of the Civil Service wrote to all Local Authority Chief Executives late last week – has clarified just how bad this nightmare interim period will be.  Four years and the full UC system wont be completed until 2017!!

Heres what they say about Universal Credit: –

We envisage a soft landing from October 2013 with applications for the new benefit arising only from new claims or major changes in a claimant’s circumstances. We know that many of you are already making plans to scale back benefits services from 2013. However as you manage down that capacity, please have regard to the fact that some capacity will be needed to maintain the Housing Benefit caseload prior to full migration to UC; process new claims to Housing Benefit for some working age claimants until April 2014; and to provide the face to face support described above. New HB claims for pensioners will also continue until October 2014 and full migration of all existing claims to UC will not be complete until the end of 2017.

A soft landing?  Sir Humphrey woul like that phrase very much one thinks as it implies the interim period will be smooth and hold not too much disruption.  But hang on “…please have regard to the fact some new capacity will be needed to maintain the Housing Benefit caseload…” – That doesnt sound like a soft landing at all does it?  Especially as it comes after the Civil Service knowing that LAs are planning to cut Housing Benefit staff.

Let me get this right.  HB officers I said above will “….need to know not only what benefits are currently in receipt for each claimant, but also what benefits each claimant could receive.  That places a huge burden and knowledge base on the individual HB officer as they are trained in HB regulations not the regulations and eligibility criteria for Child Benefit (currently universal but soon to change); Child Tax Credit (administered by HMRC); Carer’s Allowance (DWP) to name but a few.”

Yes the same HB officers who are going to be run around chasing their tails with this massive new workload of determing all welfare benefits as well as housing benefit – that we now know is going to be for at least 4 years  – will have to do this from diminishing staff numbers!

This is a new genre as it mixes the Kafkaesque nightmare with the Brian Rix Whitehall farce.  The Civil Service knowing that (housing) benefit staff are to be reduced has just given them twice as much work to do…and twice as much is deliberate understatement!

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