THE arguments against Universal Credit seem to be legion. However, we thought we would take this opportunity to show what the creators of the program think.
Here’s a blog post from Center for Social Justice CEO Andy Cook.
“Universal credit (UC) is one of the most effective poverty reduction tools we have. The CSJ is committed to ensuring its effective deployment and ensuring that the government makes the most of its potential to change people’s lives.
When fully deployed, between 250,000 and 300,000 additional people will be employed. To put that into perspective, it’s the entire population of a city the size of Newcastle.
Additionally, recent data has shown that compared to the old welfare system, people are more likely to find work, stay at work, and earn more money while on UC. This is hardly surprising given that it simplifies the system, gives applicants a single job coach to guide them through the process, and allows them to keep more of the money they earn.
It replaces an old system, which is so punitive that the unemployed keep as little as 4p out of every pound they earn if they take a job, undermining the principle that he should always pay more to work.
Many of us who have worked on the frontlines to support the unemployed remember this situation well, which is against a disincentive to work as well as the disadvantages that were common in the most difficult areas. .
UC can change that.
The CSJ has been involved and supported the UC since day one – we, along with many members of our Poverty Fighters Alliance, designed it in our 2009 Dynamic Benefits document before it was rolled out by the government.
This week we made further suggestions to the Work and Pensions Select Committee and suggested ways to strengthen UC as it unfolds.
If UC is to be as effective a poverty alleviation tool as it can be, it will need strong leadership to achieve this. While the UC principles have near universal support, questions have been raised about how the deployment is being conducted. There is concern that the way new applicants arrive at UC has put some applicants in financial difficulty, leading them to miss rent payments, take on expensive loans and do without basic daily necessities.
Critics have focused in particular on the wait before receiving the first payment. As UC is rolled out in more claimant groups, in more job centers across the country, some organizations and politicians have called for a hiatus. We think that would be a mistake. Any break would increase uncertainty for JCP staff, create confusion for applicants, delay the proven benefits of the system, and ultimately is not necessary to address some of the implementation issues facing the government.
The CSJ welcomes the introduction of same-day budget advances to ease transition times and believes that two other changes would help further facilitate the transition of applicants from the existing system to the UC, and better reflect the design and l The original intentions set by the CSJ in 2009. These can be carried out without interrupting the deployment and would go a long way in making the lives of many applicants safer and more secure.
First, the government could phase out the seven-day wait that all applicants must meet at the start of a claim and during which they are not eligible for any benefit payments. The premise of UC is that claimants are paid monthly, just like you would in any job. However, no job requires an employee to work for free for the first seven days. The cost of this small change would be around £ 140million in the first year.
Second, the government could reintroduce work allowances for all job seekers, which were included until a few years ago. It would be a significant reinvestment in unified communications. The IFS estimates that depending on how work allowances are phased in, this would cost £ 3.4bn by 2020-2021. The investment in labor allowances would go directly into the pockets of those we need to help most. They increase the incentives for claimants to find work and help ensure that the job pays more than welfare by allowing claimants to keep more of their paycheck. The money for the investment could be found by halting the planned increase in the personal tax allowance, the benefits of which disproportionately flow to the wealthiest wage earners.
As Her Majesty’s Treasury prepares the fall budget, we call on the government to make these changes. This will help make UC the most powerful mechanism to reduce poverty in the country. It will change lives and make work pay off. This is an opportunity not to be missed.