Welfare Reform: It Could Have Been Good

It's such a shame. There was a wonderful opportunity to make something that worked. To get rid of what was failing and bring in new things that improved on the original. To end the mess and confusion. To repair the holes. Instead we have more holes. Bigger holes. Holes in places that used to work.
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It's such a shame. There was a wonderful opportunity to make something that worked. To get rid of what was failing and bring in new things that improved on the original. To end the mess and confusion. To repair the holes.

Instead we have more holes. Bigger holes. Holes in places that used to work.

Like Housing Benefit. For those in social housing, Housing Benefit used to go straight to the landlord. The tenant never saw it. Now, Housing Benefit is going to go to the social tenants for them to pass on to the landlord. In a pilot study, arrears increased from 2% to 11%. Landlords faced increased costs as many tenants were reluctant to pay by direct debit due to the financial penalties incurred if a debit payment bounces.

Only 37% of social landlords think direct payment will still be in place in 2017.

Occupants of social housing now also have to contend with reduced housing benefit if they have spare bedrooms. Whilst in theory it sounds sensible to not pay for under-occupation, it depends on a vital assumption that is not met. The assumption is that there are smaller houses for these tenants to move in to. The reality is that there are not. In Falkirk, there are 2547 one-bedroom properties of which 2507 are occupied. That leaves 40 for the 2645 tenants with one spare bedroom, and nothing for those with two or more spare bedrooms. The DWP admits that there is a surplus of three-bed and lack of one-bed accommodation. The DWP suggests that tenants move to a different area - but when all areas lack one-beds, where exactly are these tenants supposed to move to?

Then there's Disability Living Allowance. This benefit exists to assist with the extra costs brought about by disability. The government is changing this to Personal Independence Payments, a benefit that they predict - and indeed predicted even before it had been designed - to cut 20% off the DLA bill. That's 20% taken from disabled people. At least 500 000 people are expected to lose disability benefit.

Housing Benefit wasn't broken. So why break it? DLA could have been improved; instead it was made worse.

But the biggest shame is Universal Credit.

The idea is great. Different benefits shouldn't be tapered at different rates, as that does cause confusion. So to combine them into one payment with one tapering rate is a good idea.

But the good idea stops there.

The benefit is made up of different components, depending on one's situation. There is a child element and a disabled element and a carer's element. But why are these needed when there is already Child Benefit and Disability Living Allowance (soon to become Personal Independence Payments) and Carer's Allowance?

There are different levels of personal allowance - the amount kept before tapering starts - that will change as one's situation changes.

There is a cap to the total that can be received, but not everyone is included. Nor is every benefit included.

Council Tax Benefit isn't included and has been devolved to local councils. This will create a postcode lottery, meaning if you move your income could change. The lack-of-inclusion means that another taper is added to that of UC.

All these things aren't necessary. Either have a separate Child Benefit, DLA and Carer's Allowance, or fully include them in UC. Either have a cap or don't. Don't keep changing things as people's circumstances change - if you do this, you might as well not have bothered with the whole idea of UC.

And then the real problem: all this has been brought in so quickly, that the flaws in the system remain. Councils lack the information they need about how UC will work, so they can't adapt to it. The IT needed to support it isn't ready. There have been four directors of this project in 6 months. The pilot scheme is being carries out manually using spreadsheets.

But it isn't behind schedule. Oh, no. That the pilot is being carried out only in Tameside, and not Wigan, Oldham or Warrington, is not because of delays and problems. That only 300 people - 0.5% of potential claimants - are expected to join in the first month is not because of delays or problems. That those in the trial must be single, have no children, have been recently employed, not be ill or on disability benefits, not be caring for another person, not be homeless, not be in temporary accommodation, have a valid bank account and have a national insurance number is not because of delays or problems. That families will not be included in the October national roll-out - with no fixed date for when they will join - is not because of delays or problems.

It's such a shame. The benefits system could have been improved. The holes could have been sewn up. The net could have been raised so that people didn't hit the ground anyway when they fell in. It could have been raised so that people could climb out again.

Instead we have a mess. A universal benefit that isn't ready; a disability benefit that excludes too many people; a housing benefit that doesn't meet the cost of housing.

The government could have done something good.

References:

Latest information to Universal Credit from The Guardian: