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Sunday, October 28, 2018

How underfunding sabotaged Universal Credit

As we await Monday's budget and note the increasing pressure on the UK Government to fix the problems in Universal Credit, it is worth noting the views of Deven Ghelani, a former Department for Work and Pensions (DWP) adviser.

He believes that Universal credit has been fatally undermined by the Tories’ other brutal welfare cuts, namely £12bn of “salami-sliced cuts” that were introduced by the former Chancellor after the 2015 General Election, once he could shake himself clear of Nick Clegg's veto on such a course of action.

The Independent says that this fresh criticism of Conservative welfare cuts comes amid a blizzard of pressure on the chancellor to act on the crisis surrounding universal credit in Monday’s Budget:

* A Commons committee is calling for the extension of universal credit to be shelved until the DWP can show it will not push “one more claimant over the edge”.

* Labour has published 10 demands for immediate changes, including slashing the five week wait for payments, and an end to sanctions and split payments (to protect victims of domestic violence).

* The Children’s Society is warning families will lose up to £2,460 per year without a rethink, including 100,000 disabled children who will be as much as £147 a month worse off.

Philip Hammond, the chancellor, is expected to announce some shift on universal credit after as many as 30 Conservative backbenchers threatened a revolt.

The rebels want around £2bn to protect the hardest-hit groups – single parents and second earners in families – before a rollout the Department for Work and Pensions has already delayed.

Vince Cable has also joined in this call for action.

The paper adds that Mr Ghelani, who advised Iain Duncan Smith on introducing universal credit at the start of the decade, has pointed to the vast other welfare cuts as the “biggest” cause of the current problems:

“The core issue is the £12bn of salami-sliced cuts which means people on benefits are already under huge financial strain, even before they are asked to manage the change onto universal credit,” he said. “There is more to come in the years ahead, when universal credit is already less generous than the benefit system it replaces.

“On top of that, the local organisations helping to deliver it are also under strain so are less able to help claimants, and the DWP itself is having to implement it as it has to make big savings.”

Mr Ghelani, who now runs a welfare consultancy called Policy in Practice, insisted the shake-up could still be a success, even if it is far from “the promised land” envisaged.

But he added: “The problems with tax credits in the last decade, and with housing benefit in the 1980s, were only solved by spending lots of money – you can’t do welfare reform on the cheap.”

It is a mess that needs to be tackled urgently if yet more people are not to suffer the consequences of the botched introduction of this new benefit.
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