“I’m struggling to buy food. I’m struggling to keep my phone going. It’s just a nightmare.”
This helpless reaction comes from an unnamed recipient of Universal Credit, the UK’s welfare program. The initiative was supposed to simplify the welfare distribution process, incentivize people to work, and cut down on overall costs by increasing general efficiency. Instead, none of the proposed goals are close to being met, and more harm than good has been done to those dependent on welfare. The UK’s Universal Credit has failed the people spectacularly, and instead of trying to salvage an already lost cause, it would be best for the British government to revert to its old welfare system.
The Universal Credit program stemmed from an ambitious plan in 2010 to merge a multi-faceted system for housing benefits, child tax credit, income support, working tax credit, income-based jobseeker’s allowance, and income-related employment and support allowance, intending to allow for a holistic assessment of individual needs. Initial proposals were made with the main goal of improving work incentives “through a combination of improved earnings disregards and/or lower benefit withdrawal rates.” The program would use metric discerning factors such as income and living costs, calculated on an monthly basis, to determine benefit payments to a recipient. This “one-size-fits-all” method would also hypothetically let the government efficiently cut down costs for administration of separate programs.
The British government’s naive goal has proved disastrous, with many reeling from slashed benefits despite no actual improvement in living circumstances. Many policies within the Universal Credit program are proving problematic for claimants. The large amount of time between applying and receiving benefits, a gap of 4 to 5 weeks, for those who live paycheck to paycheck is detrimental to the ability to provide for immediate costs such as food, utility bills, etcetera. The questionable minimum income floor, an automatic deduction of benefits from the minimum wage, regardless of how many hours an individual has spent working, has also proven detrimental to workers. In addition, workers who receive multiple paychecks in the same month are at a severe disadvantage; under the Universal Credit, if a worker is paid twice in one month, their work allowance benefits decline due to a supposed 100% increase in income (from the logic of being paid twice), despite no actual rise in income.
Harms stemming from these losses have manifested in the daily welfare of regular citizens. Demand for food amongst claimants has skyrocketed, forcing food banks to multiply their projects, with one-fifth of demands coming from direct referrals of benefit recipients with delayed benefits. Many claimants have been evicted and forced to weather harsh conditions on the streets because of delays in benefit payment or errors resulting from the transition into the new program.
Parliament has currently invested £1.9 billion into Universal Credit, but spending seems to have no end in sight, with the National Audit Office issuing warnings that the Universal Credit system will most definitely surpass its expected costs (with additional reports estimating a 400% disparity in proposed spending and actual costs). For these reasons, a return to the old welfare system is imperative.
To begin with, the ‘one-size-fits-all’ metric should be broken up into the old factors; the National Audit Office “maintains that an accurate reflection of welfare needs may not be calculated under the new metric, and that evidence of tangible employment benefits may not able to be properly tracked,” meaning that a proper assessment of individuals’ holistic needs would be better gauged by determining in which particular sectors individuals require assistance. In doing this, unnecessary payment delays or complete hold-ups can also be prevented, which would allow for the majority of UK citizens to pay for their bills or other essential costs on time.
Furthermore, a direct focus on broken-up departments of benefits would be more accurate in assessing how much in benefits should actually be given to individuals. This is specifically in response to the deduction of benefits for individuals who don’t get their due under the Universal Credit system because of their untraditional payment timeline. According to a survey from April 2017, approximately 24.4% of the UK workforce receives payment more than once a month, and potentially all of these workers could be caught up in bureaucratic complications. Instead of individuals being denied their rightful benefit amount (on average, claimants could possibly lose up to £200-per-month due to guidelines within the Universal Credit system aimed to mitigate welfare fraud), individuals will be able to receive the benefit amount they are supposed to receive.
Additionally, the argument made by proponents of the Universal Credit system that the new program would substantially “nudge” unemployed individuals into the workforce has seen lackluster results. In March 2018, economist Paul Johnson of the Institute of Fiscal Studies (IFS) wrote a public letter asserting that, while initial IFS research hypothesized that the implementation of the Universal Credit system would lead to an increase of 50,000 to 230,000 individuals in the workforce, a rather broad but still positive number, recent developments projected a “highly uncertain” outlook on the future of the Universal Credit system’s proposed benefits. Recent allegations have also surfaced that the Department of Work and Pensions was hiding its findings on disappointing workforce statistics.
The Universal Credit system attempted to create a new welfare paradise, a society in which the most vulnerable would be able to get back up and create new opportunities for themselves with the help of government benefits that would eventually taper off. However, the reality is that people are worse off than before, a result of a system that has become over-complicated due to efforts of over-simplification, and a greater divide has emerged between the government and the people. It is time for Parliament to revert to its old welfare system, for despite its flaws (as are existent in any state-led program concerning welfare distribution), it never posed dangerous threats to both the government and the people as the new Universal Credit program imposes on the country.
Photo: London Sunset