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Bright Blue, the independent think tank for liberal conservatism and home of conservative modernisers, has today published a report, Helping hand? Improving Universal Credit, based on new and extensive analysis of 40 depth interviews with a broadly representative sample of current claimants in England.

This report explores the impact of the unique and key design features of Universal Credit (UC) during three critical stages of the claimant experience: accessing, managing on, and progressing on UC.

This report is unique in three ways. First, on the breadth of claimant experiences and attitudes captured in our depth interviews. Second, on the diversity of claimants interviewed, including the self-employed. Third, on the focus being on key and unique design elements of UC, rather than financial support.

The main findings from the depth interviews include:

  • Most claimants are coping with and adapting to UC. There are positive experiences, especially with work coaches. And there are positive attitudes too: especially towards the single payment model and the need for conditionality. Common descriptions of UC deployed by our interviewees included “helpful”, “straightforward”, “smooth” and “easy”.
  • There is a significant minority of claimants that are struggling with certain key design features such as the online nature of UC and monthly payment in arrears, either initially or in the long-term. There were claimants with socio-demographic characteristics that especially seemed to struggle with key design elements: claimants that were older, long-term unemployed, self-employed and with mental or physical health problems. It was typical for such people in our fieldwork to assert that UC was “confusing”, “stressful”, “challenging”, and “unsettling.”
  • The biggest challenge faced by claimants is the initial waiting period of at least five weeks, which most claimants in fact struggle with. There are three issues related to this: the official length of time; the majority use of advance payments to cover this time; and, further delays above and beyond the official time caused by errors, which a third of our interviewees experienced.
  • A clear majority of our interviewees felt that the housing element of UC should be the reverse of the new status quo and be paid directly to landlords. This was true even of interviewees who did not personally struggle to pay their rent. There was a strong belief that, in this respect, the legacy system is better.
  • Awareness of and use of Alternative Payment Arrangements was very low. Alterative Payment Arrangements can be requested by claimants for more frequent payments, split payments, and direct payments to a landlord.

The report proposes policies that seek to improve the experience of the significant minority of claimants that are dissatisfied and struggling with key and unique design features of UC, as well as seek to ensure the positive experiences many claimants have can be enjoyed by others.

Commenting Ryan Shorthouse, Director at Bright Blue and co-author of the report, says:

“Universal Credit has plenty of potential. A majority of claimants are coping with and adapting to Universal Credit. There are positive experiences with work coaches. And there are positive attitudes too: especially towards the single payment model and the use of conditionality.”

“However, as it has gone from idea to implementation, the initial widespread support Universal Credit enjoyed has dissipated. Despite welcome improvements made by the  Government in recent years, there are too many examples and too much evidence of significant hardship experienced by a sizable minority of those on Universal Credit.”

“The initial waiting period for the first Universal Credit payment is causing the most difficulty. There is a substantial minority of claimants who are older, unemployed and with mental and physical health conditions that are struggling with certain key design features, such as the online nature of Universal Credit and monthly payment in arrears.”

“Especially as its fiscal approach towards welfare has happily been revised in recent years, the current Government has an important window of opportunity, before rollout accelerates, to invest in introducing significant changes to key design elements of Universal Credit.”

Bright Blue’s main recommendations in Improving Universal Credit are:

  • All new claimants of UC should receive a one-off upfront ‘helping hand’ payment

We recommend that all new UC claimants should be offered a one-off ‘helping hand’ of equal to 25% of their estimated initial UC award. This would be equivalent to a week’s worth of their future UC award payments. This ‘helping hand’ would be paid as soon as possible after successfully registering on UC to the claimant’s chosen bank account, would be non-repayable, and could only be received once by a claimant over a long time period.

  • Claimant commitments should be rewritten to include obligations of individuals and institutions that support UC claimants. If these obligations are not met, Independent Case Examiners should determine whether compensation to claimants is paid in their next UC award

We recommend that claimant commitments are rewritten to reflect not only the obligations of claimants, but also the obligations of the individuals and institutions that are delivering UC. For work coaches, for example, this could include their commitment to respond to the entries in the online journals of UC claimants, or facilitate suitable training or work experience, within a specified time period. For the DWP, this should include the obligation to pay claimants their UC award – especially their initial award – on a specified date.

Claimants should be able to seek redress via an Independent Case Examiner, who could investigate and determine whether financial compensation should be paid to them in a future UC award. The amount of compensation issued to UC claimants should to some degree mirror the amount lost by claimants because of sanctions. Specifically, the financial compensation offered to claimants as a result of non-compliance by DWP should be tiered according to the number of weeks a claimant has waited for their UC award.

  • Enable claimants, through their online accounts, to grant continuous explicit consent for their advocates and to opt-out and personalise the default frequency and destination of their future UC awards

We recommend that all claimants have the power, through their online UC accounts, to grant continuous explicit consent for their advocates and to alter the frequency and destination of their UC award payments before they receive it in their bank accounts.  This would enable claimants to have control to change relatively quickly two aspects of the way they receive their UC awards before they receive it in their bank account. First, how frequently their UC awards are paid, enabling monthly or fortnightly payments. Second, the destination of different elements of their UC award, enabling different amounts specified by the claimant to be paid into up to three different bank accounts. These different bank accounts could include: an alternative current account, which belongs to them or their partner; a savings account, which belongs to them or their partner; and, the bank account of their landlord. This enables all claimants, without any conditions, to instigate relatively quickly split and managed payments.

  • Introduce a live chat facility in the online UC account for claimants with queries and problems

We recommend that the government introduce a live chat facility within online UC accounts, so claimants can get their queries and problems addressed almost anytime and anywhere.

  • Introduce a new mobile phone app for people to access their UC online account

We recommend that the DWP develop, or commission a competitive tendering process for a third party organisation to develop, a new mobile app which provides claimants with access to their online UC account.

  • Cap the number of UC claimants all work coaches can be assigned

As of March 2018, work coaches had an average caseload of 85 claimants. By 2024-25, the NAO has forecast this will increase dramatically to 373. Such a dramatic expansion in caseload risks jeopardising the generally positive relationships which have characterised claimants’ experiences of UC to date and, ultimately, the success of UC in improving employment rates.

We recommend capping the number of UC claimants a work coach can be assigned.

  • Ensure there is a full-time disability and mental health specialist employment adviser in every Jobcentre Plus

Though DWP initially intended to remove all specialist advisers, including lone parent and young people advisors, they have recently reversed their decision to remove disability advisers. As of July 2018, there were 458 full time equivalent disability advisers across 637 Jobcentre Plus’s. Due to the significant and positive role that disability specialist employment advisers play, we recommend that every Jobcentre Plus should have a full-time disability and mental health employment adviser.

  • Introduce a disregard for the repayment of UC overpayments where DWP is responsible for the error

Under the legacy system, up to £2,500 a year is disregarded from the recovery of any overpayments of tax credits. This disregard does not exist under UC. We recommend that overpayments in UC caused by official error should be disregarded up to a certain value.

  • An ongoing out-of-work claimant, or claimant that still needs to find further work, should be awarded a supplement on their future UC awards if they are consistently meeting the most demanding conditions around job seeking and preparation set by their work coach

At the moment, there is a penalty of being sanctioned and losing your benefit income for not fulfilling conditionality requirements. There should be greater rewards, not just sanctions, built into conditionality requirements. We recommend that a small but significant supplement is added to all subsequent UC awards of out-of-work claimants, and those who are required to find further work, who consistently meet the most demanding conditions around job seeking and preparation set by the work coach.

The supplement should be awarded after a set time period and only when the claimant is out-of-work, or – in the case of those required to look for further work – until their in-work conditionality requirements are met. This would therefore be rewarding claimants who are putting in maximum effort but have been simply unlucky in securing appropriate employment. Those claimants that refuse to take up suitable employment that has been offered to them, even after complying with their conditionality requirements over a set time period, will not be eligible for the supplement.

  • Enter all claimants who are consistently meeting the most demanding conditions around job seeking and preparation set by their work coach into a new biannual UC prize, where a handful of claimants win £1,000

We recommend that those out-of-work claimants, as well as in-work claimants who are required to look for further work, who consistently meet the most demanding conditionality requirements over a set time period should be entered into a biannual prize. Eligibility would be similar to the aforementioned supplement, but with this policy even those who go on to secure work and even leave UC will be eligible to be entered into the prize. A handful of winners across the country will be announced every six months, each winning a £1,000 prize. Claimants will only be able to receive one prize in their lifetime.

  • Extend the 12-month exemption from the Minimum Income Floor (MIF) for self-employed UC claimants, so a further separate 12 months of exemption can be claimed at any point in their lifetime while an individual is on UC, after approval from a claimant’s work coach

The existing 12-month grace period preceding the activation of the MIF is intended to give self-employed claimants the time to develop profitable businesses. The MIF is then intended to prevent UC being used to prop-up unsuccessful businesses. Rather than providing claimants with an extended grace period before the MIF applies, we recommend that UC claimants are given an additional but separate 12 months’ exemption from the MIF after the grace period. Claimants will be able to choose which months the exemption will apply. They will determine the months for any point in their lifetime when they are on UC. Claimants would only be eligible for these 12 additional months once in their lifetime, regardless if the nature of their self-employment changes, but they do not have to be taken all at once.