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Universal Credit - Select Committee Evidence

Iain Duncan Smith MP, Lord David Freud and Howard Shiplee (Universal Credit Director General) have given evidence to the Work and Pensions Select Committee on Universal Credit (UC).

The Committee raised concerns that the only UC claims being processed in the Pathfinder are really simple ones eg single JSA claimants, with no dependents, no housing costs etc. In addition there are only 282 UC claimants which doesn't appear particularly challenging when testing a system.

Lord Freud (in a moment he may regret) said that the UC has been termed the Lobster Pot internally – once someone is in they stay in. Possibly not the best analogy if we are trying to move away from benefits being seen as a trap!  As the circumstances of these early UC claimants change, they become more complex, enabling DWP to test more complex claims as they develop. Howard Shiplee noted that there are now more UC claims being made by couples, but the level of testing for this group will need to increase to ensure high levels of confidence that the system works.

The Committee were concerned that this was a really slow way to learn lessons and test the system, and that unless DWP started testing on much more complex claims, the roll out of UC would not be achieved on target. Around 90% of UC claims are being made on line, against an original prediction of 50%, but as this is for the “easiest” customer group, it can’t be taken as representative of all UC claimants.

Lord Freud said that DWP are aiming to test processes with vulnerable groups “pretty soon”. IDS elaborated further with a “post October” timescale when DWP will be selecting more difficult groups to run through the process.  Neither would confirm the size of the test group or when real scale testing would begin.

There was much discussion about the roll out timetable and a lot of side-stepping. The original timetable issued in November 2011 was for all new claimants of existing benefits to go onto the UC system from April 2014. This is not the case.  All of these initial estimates have changed as the pilot has progressed.  The outcome of the back and forth discussion, was that IDS stated “we will achieve significant volumes during 2014” but no-one was prepared to provide a number of how many UC claimants there would be by the end of 2013 or in 2014 or when new claims to JSA or other existing benefits would stop.  The assurance was given that the end game of full implementation by 2017 would be achieved, even though the milestones may have changed to allow for proper testing, learning and review.

The Committee highlighted an issue with the integration of IT systems. During a visit to the Pathfinder they had observed staff having to manually input data into different systems such as work services, UC, text messaging system etc. Lord Freud assured the Committee that the system will be “less clunky” and that it wasn’t difficult to resolve bits of integration.

Suzanne Newton, Real Time Information Programme Director of HMRC spoke about the RTI PAYE reporting system that has been introduced for employers. During the pilot year 60,000 schemes joined the pilot with 6 million individual records.  This was far in excess of the original pilot and the system has been well tested.  It is working well and has been well received by employers. It is estimated. The use of RTI will develop as UC is rolled out. IDS highlighted the plan for JCP advisers stay with the individuals while they are in work and still claiming UC, to help support them in work and build up their hours if working part time etc. 

Discussion surround how DWP are going to get 80% of UC claimants online by 2017. Around 20% of people on Pathfinder “do it on their smartphones”. A similar number are using family and friends to help them. The government is prepared to put a lot of resource to building up this capability. Hammersmith JCP is a Jobcentre of the Future and has a “huge number of internet devices and advisers to support and help people coming in to do that”. 6,000 new Internet Access Devices (IADs) will be introduced into all Jobcentres (including Scotland), taking the total to 8,000 across the UK.

An issue was highlighted around the actual process of claiming online, and the need for claimants to have a facility to save and return to their claim rather than having to log out and start the whole process again if they didn't have some information. Howard Shiplee responded that this is a security feature, and it is safer for sessions to be shut down rather than leaving it open. He assured the Committee that “in time” this issue will be addressed.

A positive view was given of the Direct Payments system (housing benefit paid to claimants rather than direct to landlords). There has been a 94% self-selection rate that suggests claimants have a certain level of confidence in this approach. There is still a managed payments approach for those who can’t handle direct payments, and a safety net for those who get into arrears. A rapid arrears recovery process will limit the impact on landlords. Positive stories are being presented about the improved relationship between landlords and their tenants. 

With regard to banking as part of the financial structure needed for UC claimants, 90% of potential UC claimants already have a bank accounts. The government has invested £38m into credit unions and are working with banks to ensure basic bank accounts are available.

Lord Freud suggested that there may be early testing on different aspects of UC such as changing the Second Earner Disregards to ensure that all members of a household are encouraged to work. Randomised trials would look at what happens to individuals and to the welfare budget when work allowances (a new term) are changed. 

Passported benefits were briefly discussed but due to the complexity of this, these discussions were postponed to another session.

IDS was keen to reinforce the fact that DWP are listening to and responding to what the Select Committee and Local Authorities are saying during the implementation, hence greater levels of testing, slower than planned roll out etc.

10 July 2013

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