universal_credit_enough_is_enough - RSA

Universal Credit – enough is enough

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  • Future of Work
  • Employment
  • Behaviour change
  • Health & wellbeing

The claims made for Universal Credit– cost effectiveness, impact on employment, simplicity - have no evidence behind them. Its introduction has been a disaster across the board, argues Anthony Painter.

Universal Credit is but one part of a three-pronged approach to welfare reform. The other two are the extension of hard conditionality in the form of sanctions on the basis that work is all you need for economic security. The third is cuts to levels of payment with some groups, the most vulnerable such as those with long term sickness and disabilities amongst them, bearing the brunt of cuts.

This is where I drop traditional English reserve. Taken together this package of welfare reform has left a system that is cruel, punishing, bureaucratic, authoritarian, ineffective, undermining of good work, and of caring, personal development, family harmony, and public health – most particularly mental health. This system is a national scandal; it must be stopped not just patched up and as soon as possible. It has left us a society utterly morally degraded and, in many ways, repugnant. We should be ashamed of what we have done.

Why ‘we’, surely it’s the Government? Without wishing to absolve successive Governments of any blame whatsoever, we as a society have to bear responsibility too. For too long we have allowed the myth that poverty is caused primarily by character to be perpetuated. Cod science has even been used in defence of this standpoint as Atif Shafique brilliantly set out in an RSA blog last week. But we’ve been willing to drift into the lazy assumption that all that matters is a job and if you don’t have a job then there’s something suspect about you. Welfare, therefore, should not be a support, a platform of security, rather it should be a corrective.

Here we are, a quarter of a century of welfare reform later, with more in work poverty than out of work poverty, mass harm perpetuated by a punishing welfare system, and the state extended into every nook and cranny of the lives of those who are poor or destitute.

Lest you think this is just the outpourings of an angry critic of the current system – though angry as charged, why would you not be? -  it is worth dwelling on the evidence that has been published in the past fortnight. Astream of conclusive evidence observed over several years has become a torrent in recent weeks. Firstly, a multi-university five-year study into welfare conditionality found that there was little evidence on any impact on motivation to work, many were pushed into destitution, ‘survival crime’, and ill health, and conditionality had triggered negative personal, financial, and health problems. Support programmes were found to be weak which is little wonder given the behavioural premises on which the system has been constructed- why put in place decent programmes when you can carry a big stick instead?

And last week, the Joseph Rowntree Foundation produced evidence that further backed up these findings. It discovered that 1.5million people, in the world’s fifth largest economy, were ‘destitute’. And, by the way, the Trussell Trust has shown that where Universal Credit has been introduced there has been a thirty percent surge in use of food banks. The Department for Work and Pensions denied this. This National Audit Office today backed the Trussell Trust over the Department for Work and Pensions.

And the final blow to the current system was dealt today – by the National Audit Office. The costs are far higher than forecast, the impacts on individuals in terms of indebtedness, rent arrears, and destitution clear, and far from simplicity, the system is excruciatingly complex. And this is where you end up when a Government ministry embarks on a mass campaign of interventionist individual behaviour change. Universal Credit is bad because the values on which it was built are rotten, the implementation was rotten, and the impacts are predictably rotten.

This course was set in the 1990s, extended under the Labour Government and then accelerated under the Conservative-Liberal Democrat Coalition and now the Conservatives governing alone. In other words, every governing UK party has its fingerprints on the current welfare state. Quarter of a century ago we took a slow then sharper turn into a cul-de-sac. And that is now where we are – the clutch is disengaged but the foot pushes the accelerator to floor, smoke is pouring out of the exhaust.

The failure of a quarter century of reform is almost too big to comprehend. Caution amongst anti-poverty campaigners, think tanks, the media, and political parties in insisting on a fundamental change of direction is understandable. Path dependencies are ingrained and the scale of the challenge incredible. Universal Credit and the wider system of which it is a part is not going to be replaced overnight and therefore short-term mitigating measures will be needed. But there is an enormous risk to this approach without a case for more fundamental change alongside. This risk is that technical reforms do just enough to hide the scandal from view without resolving the fundamental issues.

Whilst short term changes are important and necessary, there should be greater boldness from those who can see the corrosive impacts. There now needs to be a determination to replace Universal Credit and the entire assumptions on which the wider system was built. Rather than a system based on managing caricatured individual behaviours creating new insecurities as it operates, the system should instead be based on ensuring a bedrock of economic security for all. Conditional, means-tested systems cannot achieve that. And that should be step one of a now urgent response – to call for a system based on a fundamental level of economic security. And then the real change can begin.

Immediately, the roll out of Universal Credit should be suspended. Those who have ended up in debt or rent arrears should be compensated. Conditionality should be softened pending a full evidence review into conditionality and the culture and actions of Job Centre Plus. This review should be free to recommend the end of conditionality and, should the culture of Job Centre Plus be seen to be irreversible in a reasonable time frame, the replacement of it with an agency tasked with promoting economic security and support could be recommended.

Alongside this review, there should be a full independent inquiry into how this debacle happened with a view to laying out how to avoid it once again as the welfare system is replaced. This inquiry would provide lessons for wider public policy. In tandem, experimentation in how support for individuals and families could operate differently should be widened. Hillary Cottam has some intriguing ideas for how relational, civic welfare could work, explored in her new book, Radical Help. New support measures must rest on a firm base. Reforms to how we provide cash support need to be explored. A Basic Income, grounded in economic security as a fundamental, unconditional level of support, should be understood more deeply. The Scottish Government has sensibly funded feasibility studies into Basic Income pilots. The rest of the UK should be supported in doing so also.

Finally, a Commission should be established to recommend options for the replacement of the current welfare system over the course of decade and a half (welfare reform takes time). It should be tasked, amongst other things, with exploring possible pathways to a Universal Basic Income. The RSA has suggested what one of these pathways might be. That would be but one element of change. The whole system including support for housing, disability, child care, and into and in work support should be considered. A whole system reform is now necessary.

As the original Beveridge report stated: “A revolutionary moment in the world’s history is a time for revolutions, not for patching.” As we embark on the 2020s - a likely decade of disruption as society ages, technology spreads, the world of work restructures, and Brexit takes hold – we already face chronic and acute economic insecurity. And here we are grappling with a monumentally failing system. This national scandal can be pivoted into deep and profound progressive change. Let’s not turn away.

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  • Very -well written and indeed true not only for UK but throughout Europe!

    Prof. Nicholas Markatos

  • The fiasco that is Universal Credit is unarguable. I am not sure how much good an Inquiry would do - every fiasco has its own way of avoiding the lessons of history and those to follow will be no different. I do think that the people who rolled it out should have made absolutely sure that it worked before pulling the rug on the old system, even if it meant running the two systems in parallel for a while (this is elementary Systems Engineering). Should we find and punish them? That would achieve nothing. Could we change Government practice to stop such things happening again? Yes of course we should but inquiring into such a gross failing can never teach best practice to harassed bureaucrats.

    Within the IT world (wherein I dwelt until quite recently), the UK Government is notorious for its utter ineptitude at these things: NHS, DVLC, Police, Judiciary, MoD, HMRC, and now DWP join the club. Much of it comes down to inept implementation of policies and the skilful hoovering-up of large Government contracts by companies who pay no attention to their own ability to deliver. Stand up Capita at the back there.
    The rest of the IT world has long been seeing the rise of openness and transparency as the keys to successful change. Most of the Internet is run on Linux servers and connected through World Wide Web Consortium (W3C) standards. A licensing scheme which allows the business to leverage community engagement has been critical in enabling this success. The Cabinet Office has for years been plugging this message but to no avail. Departmental buyers, who understand little of such things, remain stuck with obsolete license models which pass the power (and hence the profits) to their familiar contractor and downstream suppliers. The tower contracts supposed to break this open have proved to be a mere layer of tickboxes over the same old same old.
    To stop this kind of thing from happening again, the whole process - from initial business requirement to switchoff of the old system - has to be fully open and transparent to wider public involvement from Day One. Just two novelties are necessary - a suitable licensing model that enforces transparency, and legislation that enforces the licensing model. That is all.

    Where should the DWP go from here? Yes, move its victims back to the old system, compensate them and put their wretched beast to death. A Basic Income is a good start but it cannot stand alone. Our income needs differ and what is basic for an independent and single young male is nowhere near subsistence for a diabetic in a wheelchair. Meanwhile many of us receive a kind of needs-based income in the form of tax allowances. Welfare payments and tax allowances need to be unified into a single system through a step-by-step programme of reform. As a starter for ten, I would say that DWP should assess everybody's individual income right and pass that number to HMRC who can then adjust the actual income up or down accordingly. But such radical reform cannot happen all at once, it must be implemented in easy stages. "Evolution not revolution" is another mantra of the open licensing community, which Whitehall would be well advised to take on board.

  • I spend a fair proportion of my time looking after a local Citizens Advice operation. I have observed powerful and compelling evidence about the serious short comings of UC repeatedly being presented to the DWP and Government … the impact particularly on disabled, mentally ill and the self employed can in circumstances only be described as cruel. Well done therefore for the bluntness of your article. I am sickened by the well rehearsed weak set of smug 'sound bites' the DWP and Government constantly respond with when challenged. 

    There is great merit in the underlying principles of UC where benefits and work are seamlessly joined so that those shifting between the two are supported by a state safety net. However the draconian, punitive, bureaucratic and ill conceived processes have only one focus … supporting the austerity drive to cut costs. 

    UC might just be recoverable if the DWP and Government move away from their comfy seat behind a city desk and get out there into the real world and genuinely listen/consult. Adequate funding needs to be put back into the system and therein lies the problem. The DWP's strenuous efforts to demean those in crisis and just about managing could have been so much better focused on HMRC remedying the obscene levels of tax avoidance. 

    Putting politics to one side, Government over the past twenty-five years looks increasingly morally and financially bankrupt.     

  • The problem in my view is Whitehall. Those in power have no idea of the problems they impose upon those in need. If the decision makers experienced the processes they implement, and the problems faced when making a claim and having to go without any income for weeks they would soon change the system. Due to a prolonged period of bad health I have experienced some of the problems first hand. I am now hoping to return to work as quickly as possible. They are rolling out universal credit in Darlington. Charities, Councillors, and our local MP have all voiced concerns, but no one is listening.

  • The road to Hell is paved with good intentions. Though Beveridge carried a sword in one hand to battle Want, Disease, Ignorance, Squalor and Idleness in the other he carried a shield to safeguard welfare recipients against the worst abuses of local workhouse systems. They opted for a national system, administered by Whitehall, with entitlement governed by central Diktat and voluminous codes of practice. It was supposed to abolish the stigma of welfare granted at the hand by the recipient's close community, and  by becoming both a 'right' and more anonymous it succeeded in ending much of the shame felt by many members of those past generations at receiving welfare.

    However, the supposed linkage to National Insurance was soon broken and a dual system - of NI benefits and 'Social Security' payments evolved. The rules grew ever more complex, the codes thicker and the budget control totals ever harder to control by successive governments and a Treasury having to work within a popular mandate that limits UK taxation to somewhere around 36% - 38%. Whitehall piled reform upon reform but the failures grew ever more egregious.

    Universal Credit is just the latest disaster to hit a mis-thought system that went wrong from the day that Beveridge and his colleagues rolled it out - with all the finest and most noble intentions.

    Let's be radical. Let's stop pretending that Whitehall can design a system that can adequately cope with the substantial differences in climate, demographics, employment, skills, consumer prices, environment, transport and culture from Doncaster to Cardiff. The needs of a share-fisherman in Whitby and a seasonal horticultural worker in Bodmin cannot be reconciled through any 'universal' national system. The frictional costs of attempts at such a system - in terms of human pain and suffering as well as time, failed IT systems and a large chunk of national labour resource in administering something so unwieldy - are too great.

    The answer must be local. And holistic. We are long past any danger of a return to the worst abuses that sprung from the exercise of petty local power before the War. Work, society, culture and technology have all advanced too far. Greater local discretion and less prescriptive and formulaic rationing would share out even the existing sized cake far more effectively and avoid the worst abuses so comprensively documented of UC - yes, a truly needs-based system, that responds rapidly, tailored to local conditions and linked to wider health and social care provision could actually spend existing budgets far, far, more effectively.

    The problem isn't the 'burden' of welfare - it's Whitehall.