Budget 2018: Chancellor’s billions ‘will not halt universal credit humanitarian crisis’

The chancellor’s decision to pump billions of pounds into universal credit will not halt the “humanitarian crisis” that will be caused by its systemic flaws, disabled activists have warned.

Philip Hammond announced in this week’s budget that he had found £1 billion – spread over five-and-a-half years – to ease the delayed “managed migration” process that will see about three million claimants of “legacy” benefits such as employment and support allowance (ESA) moved across to the new universal credit.

He also promised another £1.7 billion a year to pay for more generous work allowances for universal credit, which combines six income-related benefits into one.

Hammond began his speech on Monday by making it clear that his budget was “unashamedly” intended to help “hard-working families… people who get up early every morning… the strivers, the grafters and the carers”.

Managed migration will begin next year but will affect only about 10,000 people in 2019, before accelerating in 2020.

One of the flaws of universal credit repeatedly raised by critics is the length of time – at least five weeks, usually – that a claimant has to wait before they receive their first payment.

Among the new managed migration measures detailed in the budget documents are that claimants of income-related ESA, jobseeker’s allowance and income support will receive an extra two weeks of those payments during the transition to universal credit, but only from July 2020.

There will also be a cut, from October 2019, in the maximum rate at which universal credit advance payments can be paid back, from 40 per cent of the standard living costs allowance to 30 per cent; and, from October 2021, there will be an increase from 12 to 16 months in the length of time DWP will take to claw back these advance payments.

Budget documents also reveal that the much-delayed rollout might now not be completed until June 2024, rather than the end of 2023, once a “six month contingency” for further possible delays is taken into account.

Hammond also announced that the amount that disabled people and households with children can earn before their universal credit begins to be withdrawn – known as the work allowance – will rise by £1,000 a year from April 2019.

This will mean that those affected will keep up to £630 a year, with the measure eventually costing the government an extra £1.7 billion a year.

Bob Ellard, a member of the national steering group of Disabled People Against Cuts, which is campaigning to scrap universal credit altogether, dismissed any suggestion that the budget signified an end to austerity.

He said: “While tax cuts for the rich took priority, Hammond did at least find some money to appease Tory MPs’ complaints over universal credit.

“It will make little real difference to claimants, however, as universal credit will still be the cause of a humanitarian crisis in this country, whatever last-minute tinkering the Tories do.

“And the elephant that wasn’t allowed into the room was the extreme poverty that many disabled people are living in, even before being forced to transfer to universal credit.”

Disability Rights UK said that “while these changes may be positive all are subject to delay and overall do not remove universal credit’s delivery and design problems”. 

Dr Victoria Armstrong, chief executive of Disability North, said her organisation witnessed the “devastating impact of the roll out of universal credit on a daily basis”. 

She said: “Whilst in principle the idea to have a universal benefit could be seen as a step forward, we have seen it be used as a vehicle for cutting basic income for disabled people.  

“Not only that, the way that it has been administrated is not fit for purpose, for example the unacceptable waits, pushing people further into poverty, the use of food banks. Disability North have so many examples of this.  

“Therefore, we broadly welcome the £1 billion to manage the migration process, but much of this should not be thrown at the DWP, or even Citizens Advice, but should be going to local, user-led organisations like ours so that people can be supported to understand and access the system (including digital access) and appeal incorrect decisions.”

Professor Peter Beresford, co-chair of Shaping Our Lives, said: “Pumping big money into a model failing because it is overly-simplistic and over-reliant on technology won’t solve its problems.

“Disabled people are among those worst affected by this government’s failing policies and politics.

“It’s just hoping that continuing attacks on Labour’s leadership and talking up the end of austerity will keep the punters sweet, long enough.

“We just have to hope that UK democracy is not yet so damaged that the Tories will get away with it again at the next election.”

In a blog published the day after the budget, Professor Sir Ian Diamond, the new chair of DWP’s social security advice body, the social security advisory committee, welcomed the “positive steps” on universal credit announced in the budget, but said the managed migration process was still “enormously ambitious”.

He said his committee was concerned that the government’s plans “load an unreasonable level of risk onto the claimant” and added: “We fear that, in too many cases, they may be adversely impacted by the proposals or fall out of the social security system entirely.”

Disabled activists have repeatedly warned that universal credit is “rotten to the core” with “soaring” rates of sanctions and foodbank use in areas where it has been introduced.

In June, a report by the National Audit Office said DWP was failing to support “vulnerable” claimants and was unable to monitor how they were being treated under universal credit.

And in July, employment minister Alok Sharma was asked by MPs on the Commons work and pensions committee why the benefits of hundreds of sick and disabled universal credit claimants were apparently being sanctioned, even though they should not have had to meet any of the strict conditions imposed by the system.

In the same month, further concerns were raised by the committee about disabled people with high support needs who need to claim universal credit and face the possibility of strict conditions – such as being forced to carry out hours of job searches every week – as they wait for a work capability assessment.

*For further details on the universal credit changes in the budget, see this blog by the Child Poverty Action Group’s Josephine Tucker

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