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Economic Affairs Committee calls for Universal Credit reform

Lords Select Committee finds the design of the Universal Credit system is ‘failing millions of people’, including a ‘significant minority’ who struggle with the digital service

The Department for Work and Pensions’ (DWP) flagship digital benefits system, Universal Credit (UC), is failing “millions of people”, according to Parliament’s Economic Affairs Committee.

The committee’s report on the benefits system, which sets out a series of proposals for reform, said that although it agrees with the original aim of UC, the design of the scheme is leading to an increase in claimants needing to use food banks and struggling to pay their rent.

One of the issues highlighted is that some people struggle with the mainly digital aspect of the system.

“UC is designed to be a predominantly digital service. The DWP has said that investment in digital support will free up work coaches’ time for those who need the most intensive support,” said the report, pointing out that claimants are expected to manage their claims fully online, including updating the online journal and searching for employment.

“For some claimants, this approach is a significant barrier to claiming and managing Universal Credit,” it said. “We have heard that those most affected include people with disabilities, mental or physical health problems, learning difficulties, poor literacy skills or who do not have English as a first language.

“Claimants can be sanctioned if they fail to complete certain tasks which will have been set digitally.”

The committee added that those with lower digital skills are also usually those most disadvantaged, and who need most help.

“Money Advice Plus, a charity, told us that to make a claim, people need to have a mobile phone to receive a text on, an internet-enabled device to make the claim on, and an email account that they can access and receive a code on. For many people, these are all complicated and alien things,” said the report.

“Sharon Wright [professor of social policy, University of Glasgow] told us that cuts in recent years to local services such as libraries had made it more difficult to access computers and that people are often using their phone, but do not necessarily have a good phone set-up. It might cost you £25 per month for mobile data. That is a huge proportion of your income, because Universal Credit rates are so low.

“According to 2018 research by Ofcom, households with the lowest incomes are significantly less likely than average to have a smartphone or access to the internet. Furthermore, the likelihood of owning an internet-connected device declines as people age or if they have a disability.”

Read more about Universal Credit

  • Existing users of HMRC’s digital identity system can use their credentials to apply for benefits, in a move designed to ease bottlenecks caused by Verify performance problems.
  • Online queues in the tens of thousands are hindering emergency applications for Universal Credit, with the Verify identity verification system becoming a particular bottleneck.
  • The Department for Work and Pensions concludes the deployment of Universal Credit across the UK, meaning the full digital service is now available nationwide.

The report added that while non-digital options are available for claimants, they are available only in exceptional circumstances. It called for the government to fund “trusted organisations” to guide people through the process.

For several years, there have been calls for the government to improve access and UC digital skills training. In November 2018, the United Nations (UN) special rapporteur on extreme poverty and human rights, Philip Alston, raised concerns about UC and its digital approach.

“UC has built a digital barrier that effectively obstructs many individuals’ access to their entitlements,” he said. “Women, older people, people who do not speak English and the disabled are more likely to be unable to overcome this hurdle.”

There are other digital issues with the system, too. Claimants are paid monthly, and payments depend on receiving accurate and timely data from HM Revenue & Customs’ real-time information system, according to the committee’s report. It said the committee had been told that “there is a problem with poor-quality real-time information data, which will become a bigger problem as more people migrate to UC”.

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