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Pause Universal Credit in light of serious delays and problems for city residents demand Liberal Democrats in Newcastle

November 1, 2017 9:53 AM

Vince Cable, Greg StoneNewcastle City Council's Liberal Democrats Opposition will table a motion at tonight (Wednesday's) city council meeting calling for the council to support growing calls to halt implementation of the Universal Credit single payment scheme.
Universal Credit is high on the political agenda, with recent calls for the Government to ensure that the UC helpline is made free for users, after reports that some people were facing long delays in getting through whilst incurring high bills due to the helpline's call cost per minute.
The Government has now acted on this issue, but significant problems and delays continue to be reported as recipients are being forced to wait for more than the target 6 week date for processing new claims, leading many to face financial desperation and driving many to need to use food banks. Housing organisations are also reporting significant increases in tenants getting into rent arrears due to the delays in receiving UC payments, which replaces housing benefit.
The Lib Dem motion, proposed by Cllr Greg Stone, will call on the council to support calls to Government for greater flexibility and assistance to applicants for the benefit whilst their claims are being processed, and to pause the implementation of a planned acceleration of the introduction of Universal Credit. This has given rise to fears that many people face the prospect of waiting up to three months for their first payment, and having no income until well after Christmas.
Although the principle of combining numerous benefit payments into the unified Universal Credit, and of allowing people to receive Universal Credit whilst returning to work is widely seen as being worthwhile, with all main parties having indicated broad support for its introduction, it is increasingly clear that the implementation is leading to significant difficulties for many people who are waiting far longer than stipulated for their payments to be set up.
Housing provider Your Homes Newcastle estimates that as many as 58% of its tenants receiving UC are now in rent arrears as a result of these delays. Nationally, one in nine recipients have faced waits as long as 10 weeks for payment, and in some parts of the country, the average waiting time is as high as 12 weeks. 57% of recipients are believed to have had to borrow from friends or family to bridge the gap, and there are fears that some have had to resort to "payday lenders" or loan sharks.
Newcastle has been one of the first major cities to take part in the transition to Universal Credit and the council and YHN know that this is causing real problems for benefits customers in the city. It's clear that the Government needs to act and needs to do more to ensure that people get genuine help in the shape of 'advance' temporary payments, options for frequency of payment, and improving advice and online support rather than expecting people to wait for hours for phone calls to be answered.
The situation is made worse by reports that some benefits recipients are being encouraged by DWP and Job Centre Plus to make an early switch to the new Universal Credit system without it being made clear that this is likely to mean them receiving lower total payments than at present. The Lib Dems believe this is misleading and unacceptable and want this practice to be reviewed and if necessary stopped.
Cllr Greg Stone said
"The principles behind Universal Credit are valid. It can simplify a currently very complicated social security system, help incentivise people back into work, increase take up and income for people who rely on it, and can help to reduce fraud and error. However, it is increasingly apparent that the roll-out by Government is deeply problematic and the delays in payments are causing financial misery to thousands of people.
There is growing pressure on Government to delay forthcoming phases of the Universal Credit roll out until it has got a grip on the problems that are causing delays. It cannot be right that people have to wait up to three months to receive their benefits, and it is increasing poverty and stress for people who are literally left with nothing for food and housing."
The Lib Dem motion also calls on the Government to reconsider other aspects of its welfare reforms, including reversing recent cuts to the 'work allowance' component, introducing a second 'work allowance' for couples receiving Universal Credit, abandoning the two child cap on benefits, and ending the freeze on working age benefits which is affecting some of the people in Newcastle on the lowest incomes.
Cllr Stone said:
"The Lib Dem Opposition is slightly surprised the Labour council administration has not spoken out sooner on these issues. The Lib Dem general election manifesto made commitments to reverse Conservative benefit cuts, and we hope that Labour will join with us in the council chamber this evening to support our calls to Government for a pause in extending Universal Credit to new beneficiaries, and for a rethink on cuts to some of the poorest people in Newcastle

Notes for editors:

Full motion text reads

"Council notes that the underlying principles behind the introduction of Universal Credit (simplifying the social security system, improving work incentives, increasing take-up, tackling poverty and reducing fraud and error) are valid and worthy of support.

Council however notes with concern:

· widespread criticism of the detailed design and implementation of Universal Credit by the Government
· the Citizens Advice report Delivering on Universal Credit which shows that the requirement to wait six weeks for first payment causes serious financial difficulties to people with no other income, while also highlighting a range of other administrative problems
· similar findings by the Joseph Rowntree Foundation, including that:
- over a third (39%) of people are waiting more than the 6 weeks it should take to receive their first payment.
- in some pilot areas, the average waiting time is as high as 12 weeks.
- just over 1 in 10 (11%) are waiting over 10 weeks without benefit.
- 3 in 5 (57%) are having to borrow money while waiting for their first payment.
- the implications for YHN of a significant proportion of tenants on Universal Credit in arrears due to experiencing delays of up to thirteen weeks in receiving UC payments (58% - May 2017 data).
Council supports calls for the Government to pause the planned accelerated roll-out of Universal Credit until problems with implementation can be addressed through the following measures:
· removing the 7 day waiting period at the start of a claim to reduce the amount of time people have to wait for their first payment.
· monitoring the impact of payment one month in arrears, and changing it if this results in rising debt and destitution
· making sure everyone moving to Universal Credit is told they can get an Advance Payment to help them while they wait for their first payment.
· improving online systems so people can book their initial Jobcentre appointments online rather than having to call the Universal Credit helpline.
· allowing people to adjust to Universal Credit by offering options for how they would like the benefit to be paid.
· putting in place a comprehensive support package before Universal Credit roll-out accelerates, to make sure people get advice to manage their money and deal with any complications in the application process.
Council further supports calls for further modifications to the Government's welfare reforms, including:
· reversing the Government's cuts to the amount claimants can earn (the "work allowance") before their benefits are reduced.
· introducing a second work allowance, allowing both members of a couple to work without losing their benefits.
· restoring the first child premium for new claimants.
· abandoning the restriction of benefits to just two children.
· ending the freeze on working-age benefits.
Council resolves to write to the Secretary of State for Work and Pensions to communicate this view."

Pictured : Cllr Greg Stone with Vince Cable, Leader of the Liberal Democrats