Universal Credit can’t work, never could and never will. It has to be abandoned.
The policy is incompetence writ large, an ideological farrago from the dangerous mind of Iain Duncan Smith who took the simple hypothesis of let’s make ‘welfare’ a one-stop shop and ran with it and promoted it at every turn despite the facts that:
(a) Universal Credits design totally forgot all forms of supported housing in its development, and
(b) UC forgot the non take-up rates of ‘welfare’ that means Universal Credit will pay out over £30 billion per year more, and
(c) It is far more complex than the legacy welfare benefit system it sought to simplify, and
(d) It is at least 5 years over time and at least £3 billion over budget and despite Iain Duncan Smith saying at every turn that Universal Credit is on time and on budget.
A) Forgetting supported housing in UC design
Yesterday I read that the government has done a U-turn concerning Universal Credit and homeless families as the intention of UC would see councils breaking the dictat of no homeless family with children being in temporary homeless accommodation for more than six weeks, a dictat laid down by the same government and which they fine local councils when they break it.
Patrick Butler in the Guardian is to be highly commended for only writing once the phrase “Universal Credit WAS SUPPOSED TO…” as what we have been force-fed by the Tories and with the nod and a wink from the so-called opposition is that UC is wonderful in theory; yet each and every practical aspect of it proves the direct opposite is the case.
Universal Credit is so critically and fundamentally flawed even in theory that is has to be abandoned and I discuss below a tiny part of the reasons why.
Homeless Families at 78,000 in number account for less than 10% of the entire supported housing sector currently receiving HB that Universal Credit failed to include in its original design and ever since 2010 we have had fudge after fudge in the government seeking to find a way for UC to work with the way the circa 800,000 supported housing households (including sheltered) it failed to include in its original design.
Iain Duncan Smith who after ignominious failure as the leader of the Tory Party set up the CJS Think Tank who came up with Universal Credit and UC was his baby and complete with a much publicised epiphany at Easterhouse in Glasgow to boot.
Yet his UC failed to consider every woman and child in a refuge, every older person in sheltered housing or extra care provision, every single homeless person and every single homeless family, every group home for every vulnerable person with a learning, mental, physical and sensory disability and every other vulnerable person in supported housing whether they had acquired brain injury, abuse, alcohol, autism, anorexia nervosa, abandonment issue, attachment issues … and they are just some of the vulnerabilities beginning with the letter A!
The only reason the homeless families UC cock-up led to a U-turn is because this was the first example of the pilot full roll-out of the policy vis-a-vis any form of supported housing and it failed spectacularly.
The same will happen for the other 90% plus of supported housing when UC attempts to work there in the next example of the ‘roll-out’ – a term the government say is cautious and proper, yet this suck-it-and-see approach that is called ‘roll-out’ is one of we know it can’t work as it was never considered in UC’s design so let’s try it and see if we are found out! Cue many more U-turns and many more cases of UC being found out which is inevitable yet the Tory government has too much political face in the policy to do what they should and abandon it.
Back in the summer of 2011 the Tory-led coalition issued the first incarnation of the LHA maxima cap in a consultation paper that was hastily abandoned and did not even see a government response and the Tories simply buried it due to supported housing provider’s responses to it telling government it could not work. That led to years of behind closed doors meetings between Lord Freud and supported housing providers in which the government was forced to admit they forgot about how the housing costs of supported housing in the design of Universal Credit.
The original LHA Maxima cap consultation was also at pains to point out that the policy was not a cut in Housing Benefit and the policy was a cost neutral and government also admitted they did not have a clue how many would be affected by the proposed changes as the HB system did NOT record whether the claimant was in supported housing or not! That particular gem and smoking gun was contained in a DWP report of January 2010 (DWP report 715) and so the Tories at the DWP (yes that department headed by IDS) knew that Universal Credit’s ‘forgetfulness’ of the entirety of UK supported housing was missing from its design sometime in 2009 and therefore knew that the theory of Universal Credit was fundamentally flawed in 2009 as well. Yet they still went ahead with it!
B) The public purse cost of Universal Credit
A central selling point of Universal Credit was that the system would be far easier than the existing one. Instead of the claimant having to go to their local council office for Housing Benefit and of going to HMRC for Tax Credits and to the DWP for social security benefits, three separate journeys in all, the Universal Credit claimant only had one office to go to – more correctly a faceless telephone service staffed by let’s just say highly untrained personnel. Universal Credit as a one-stop shop for all ‘welfare’ was so much better we were and are still told for the claimant and for government as it would be so much more efficient, be a much better system to control and eradicate fraudulent claims and ensure they everyone only got what they are entitled to.
Yet the amnesiac brain of Iain Duncan Smith again forgot that if everyone gets what they are entitled to, this not a penny more not a penny less system would mean that every claimant would get 100% of what they were entitled to – including the £33 billion that they are entitled to which they currently do NOT claim – the non take-up of entitled benefits that successive governments have known occurs for decades.
IDS and his designers of Universal Credit missed this bloody obvious point that UC would see government paying out £33 billion per year more in ‘welfare’ and that is £90 million more per day!!
That huge additional cost to the public purse which will need to found by increases in taxes reveals just how economically incompetent IDS and George Osborne was and is as this additional cost the UC system gives must have been also forgotten by HM Treasury too!
In fact it means the entire Tory cabinet must have been and must still be full of economic incompetents to have any faith in the Universal Credit programme.
All of the above points reveal the reality of Universal Credit
C) Universal Credit as more complex than the existing system?
This discussion to date has focused on UC’s critical flaws in its omission of supported housing and its funding through Housing Benefit and its failure to include the non take-up rates of welfare that will see it pay out £33 billion more per year. The ignorance and economic failure of a system that cannot ever work and is incredibly costly and its ideological superficiality exposed.
Yet that only focuses on UC in a theoretic vacuum and not how it interacts with the plethora of other ‘welfare reforms’ which is equally as mindblowingly stupid and costly. I must admit I have not counted all of the statutory instruments (SI) that have been issued concerning Universal Credit yet they seem to appear almost weekly. Each SI changes the laws and regulations of Universal Credit from those that were scrutinised and voted upon in Parliament and while any government can be permitted not to see every aspect and impact of any major policy and thus issue this form of secondary legislation to what they forget, the number of Universal Credit SI’s is closer to despotism and patch up and make do.
A classic example is the latest incarnation of the LHA maxima cap, the 2016/17 version not the 2011 version I discussed above which was hastily abandoned – and this contains a potentially greater political risk than the added £33 billion per year cost of Universal Credit as it takes welfare away from the pensioner, the grey vote, with its backdoor bedroom tax impact.
In the Autumn Statement of November 2016 we find that the LHA Maxima cap will apply from 2019 to only new pensioner tenancies from April 2016 in the existing legacy Housing Benefit system. Yet it also stated that under Universal Credit the LHA maxima cap will apply to ALL pensioners and not just those who have become new tenants since 2016 or renewed their tenancies since 2016, but to pensioners in social housing who may have been in their homes for 40 years.
More insidiously, this applies to pensioner social tenants in general needs housing for whom (a) no consultation has ever taken place, (b) no parliamentary scrutiny has ever taken place, and (c) can see some pensioners in the North of England have their housing benefit cut even when they are not under occupying their homes while perversely allowing the London pensioner tenant to not have their housing benefit cut even if they have 5 spare bedrooms!
What will inevitably happen is that (surprise, surprise!) the Universal Credit roll-out will be delayed once again as for this to apply from 2019 is ahead of the next scheduled general election an no government in their right minds would go into any general election with the threat of losing the pensioner vote as they have had their HB cut and are forced to make up their rent from their state pension else be evicted.
That explains the real reason behind the incredibly slow roll-out of the Universal Credit system as each time the government wishes to roll UC out we find more and more unintended aspects with far too risky political consequences of each element of the ideological and incompetent and economically disastrous Universal Credit!
D) On time and On budget
The 6 week maximum in temporary homelessness provision that has seen the reported U-turn this weekend was NOT one of the specific Universal Credit cock-ups I predicted when I first started blogging about this incompetent, bankrupt ideological farrago that is Universal Credit.
I did state how it would kill off supported housing and mentioned many particular aspects back in 2011/12 such as the closure of hostels and refuges and so many more consequences that clearly its designers in IDS and his CJS think tank had clearly failed to see. On looking back today to check the above I did find a letter from two (then) Whitehall mandarins sent out to all local authority chief executives in March 2012.
This letter (below) thanks local councils and says how wonderful they have been in (a) liaising with central government over the implementation of Universal Credit, and (b) how Universal Credit will be fully rolled out, even to pensioners, by 2017.
As you can see I have emphasised some key parts of this letter (and click on each to enlarge) and the first example is on page 1 which says that government and local councils are ready to implement Universal Credit and all is going swimmingly in this letter from FIVE YEARS AGO no less.
Page 3 above states
“The DWP and the Local Government Association are working together on the development of short-term pilots to help ensure that Local Authorities are ready for Universal Credit in 2013.”
These would be the short-term pilots that began in late 2016 and has this weekend seen this first full roll-out pilot result in a complete U-turn with the homeless families in temporary accommodation issue! Yet we were told 5 years ago that any such problems and especially for short-term pilots would have been well resolved by April 2013 nearly 4 years ago!
This is typical of every Universal Credit roll-out even the very tiny and short-term roll-outs on the most basic of issues as to how Universal Credit deals with one small element of the housing costs for supported housing. They have NOT been resolved and when the teeniest insey winsey part of Universal Credit is tried out, it fails spectacularly!!
Page 3 also says and I quote:
“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.”
There is some conjecture today as to whether pensioners will be included under Universal Credit for their housing costs element (the UC bit that replaces HB) yet this was clearly the intention of Universal Credit as this DWP mandarin letter of March 2012 makes clear. It is now said that pensioners will have this cut through their Pension Credit and not their housing costs payment yet the LHA maxima cap policy makes perfectly clear that pensioners in general needs social housing as well as supported and sheltered housing will have their now what is paid in Housing Benefit cut under Universal Credit.
That is doubly confirmed in the SI that was released after the Autumn Statemnt in November 2016.
The above may read as confusing and inordinately complex and this is precisely what Universal Credit does to the existing legacy system, it makes it so inordinately complex that even the most able welfare rights specialists are often at a loss as to how it works, as indeed and especially are the Universal Credit advisers whom UC claimants have to contact over the telephone who are (a) nowhere near as highly qualified as the aforementioned welfare rights specialists, and (b) adopt a computer says no approach on the telephone because they haven’t been trained on the UC system and its almost weekly changes through Statutory Instruments (and small print ad hoc announcements buried on page 693 or whatever of Autumn Statements!)
Whichever way what is now paid to pensioners in Housing Benefit is cut, whether through Pension Credit or other means, we know it will be cut and to all existing pensioners through the LHA maxima cap route.
So, in summary, any government of any political persuasion that goes ahead with a policy that costs £33 billion per year more and which makes welfare benefit cuts to the estimated 515,000 pensioners who under occupy (and more who fully occupy) their homes is THE most politically and economically incompetent one in history.
The Tories only hope – outside of a general election being brought forward ahead of May 2020 – is to hope that Universal Credit is so inordinately complicated and so difficult that Stephen Hawking would struggle to fully comprehend that the electorate miss this farrago, which in the absence of any effective opposition to it, is, regretfully, a very real possibility!