Article by Stephen Timms MP

The universal credit roll-out was supposed to finish last month. A green paper published by the Department for Work and Pensions in November 2010 referred to “completing the transfer to universal credit by October 2017″. David Gauke, the current secretary of state, told the Commons last week, however, that only eight per cent of the roll-out has taken place. But great hardship is being inflicted.

I met Maria Amos in Liverpool this month. She had worked all her life – owning and managing a pub for some years – and had a seasonal job with Chester Zoo. Her last pay cheque was in October 2015 and the job ended in November. She had no money.  The jobcentre told her she would have to wait six weeks for universal credit. Nobody mentioned advance payments.

Maria had no food. She survived on tap water. She felt her situation was hopeless, and decided to jump from the roof of her block. Mercifully, a neighbour knocked on the door in the nick of time. She was taken to hospital and referred to a church and Trussell Trust foodbank. Today Maria is bright and cheerful. But her weight fell below six stone, and her health has been permanently damaged by not eating for all those weeks. She still owes several hundred pounds in rent, from the six weeks without money.

The debt among universal credit claimants is staggering. A survey of 105 local authorities showed that half of council tenants who receive UC are at least a month behind with their rent, compared with 10 per cent of those on housing benefit. Gloucester City Homes reports that 85 per cent of UC claimants are in arrears compared to 20 per cent of other tenants.

Image: Gloucester City Homes

In principle – as Labour has always acknowledged – universal credit was a good idea. It had the potential to simplify the system, and to make it easier to work out how your income will change if you get a job. But implementation has been bungled from the start; it has been drastically cut even from the proposals first announced; and, seven years on, ministers haven’t worked out crucial details.

In February 2011, Iain Duncan Smith gave evidence to the committee scrutinising the bill which introduced universal credit. I asked which claimants would be entitled to free school meals for their children. He said it hadn’t yet been worked out, but we would know the answer by the summer. Technically, its quite a tricky issue. Six years later, we still don’t know.

Separately the IT implementation has been disastrous. Problems began at the start. In July 2010, DWP published 21st Century Welfare.  The chapter on delivery cheerfully assured us “the IT changes that would be necessary to deliver a more integrated system would not constitute a major IT project”. I shall never understand how ministers were able to make such an absurd claim.  

I wrote to the minister twice to point out his timetable was absurd. He replied – very courteously – that it would be fine. Naivety accounted for much of what George Osborne described in a recent Evening Standard editorial as the “sorry history of procuring an IT system for the new universal credit”.

The system depends on employees’ pay being communicated automatically every month to HMRC through the PAYE real time information (RTI) system. HMRC passes the information to DWP, to work out how much universal credit is due.  

Child Poverty Action Group and others report that – amongst other IT-related headaches – UC is underpaid because RTI data can be wrong. Ministers flatly deny there is a problem – but last month, a freedom of information answer to a member of the public, John Slater, referred to the “late, missing and incorrect RTI project”. If the real time information is late, missing or incorrect, then the UC calculation will be wrong.

I asked a work and pensions minister what the remit was of the “late, missing and incorrect RTI project”. He denied there was such a thing but the Treasury was more forthcoming. A ministerial written answer told me: “During the 2016/17 tax year approximately 590m payments to individuals were reported via RTI. 5.7 per cent of those were reported late. HMRC does not hold the information in respect of missing and incorrect reports.”  

If more than 5 per cent are late – not to mention the ones which were missing and incorrect – its not surprising so many UC payments seem to be wrong.

It is seven years on from the inception of universal credit. It is creating misery and sometimes destitution amongst the most vulnerable in society. The government has rejected Labour’s call for the roll-out to be paused, in order fix the problems, so hardship will be inflicted on thousands more. But ministers won’t be able to carry on like this for much longer.

ABC Note: Stephen Timms is MP for East Ham and chair of the Parliamentary Labour Party backbench DWP committee.