The Staggers

The New Statesman’s rolling politics blog

Duncan Smith's master plan is under ever-greater attack

Universal Credit will leave claimants "trapped in poverty", warns the Joseph Rowntree Foundation.

By George Eaton Published 30 October 2012 10:09

Work and Pensions Secretary Iain Duncan Smith. Photograph: Getty Images.

Work and Pensions Secretary Iain Duncan Smith speaks at last month's Conservative conference in Birmingham. Photograph: Getty Images.

The objections to Iain Duncan Smith's master plan to transform welfare - the Universal Credit (UC) - are rapidly mounting up. Earlier this month, a commission led by Paralympian Tanni Grey-Thompson warned that 450,000 disabled people would receive less under the scheme, despite Duncan Smith's promise that there would be "no losers". Now, a new report from the Joseph Rowntree Foundation (JRF) suggests that it could leave claimants "trapped in poverty" by failing to fulfil the coalition's pledge to "make work pay". The foundation warns that while the scheme will incentivise people to take mini-jobs of fewer than 16 hours week, it will not "encourage" recipients to go on to search for full-time work. "Marginal increases in earnings alone are unlikely to be sufficient incentive to move into full-time work, with small financial gains likely to be wiped out by costs such as childcare and travel," the report says.

The JRF, which has long supported the scheme in principle, also warns that UC, ostensibly a simplification of the welfare system, will leave claimants facing "a more complex benefits system than before". The shift from fortnightly to monthly payments could result in low-income families running out of money before the end of each month. The report suggets that "Recipients may have to borrow money to bridge the gap, leaving them to start their universal credit claim in debt … it may create an unfair bias against women, with child-related support not necessarily reaching the children it is intended for."

And then, of course, there's the question of whether the computer system on which UC is based will actually work. In theory, benefit payments will be automatically adjusted as earnings vary, ensuring that claimants are always better off in employment than out of work. But that relies on real-time data transfers between HM Revenue and Customs and the Department for Work and Pensions, something many fear will prove impossible. As Rafael noted earlier this month, "The question being asked with increasing urgency (but still mostly in private) by pretty much everyone involved in welfare policy is this: if the DWP can’t seem to administer the existing benefits system properly, how on earth are they going to manage the switch to UC?" The JRF urges the government to provide details about stand-by arrangements if systems crash and to consider creating an ombudsman to deal with complaints.

With the UC "pathfinders" due to launch next April and the national launch set for October of the same year, time is short for Duncan Smith to convince the sceptics. In the words of public accounts committee chair Margaret Hodge, an ever-greater number of people believe that the project is "a train crash waiting to happen; there is too much going on".

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Tags: Iain Duncan Smith Welfare

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View the discussion thread.

19 comments

Thu, 2012-11-01 05:54 — Posh Tosh (not verified)

Hitler seems preferable to the LIbCons - hate to state that.

I am 66 and see the wire netting and the camps being built.

Cameron / Clegg / miliband are arguing whom wil build the camps.

Wed, 2012-10-31 20:05 — Obi Wan Kenobi (not verified)

IDS has no back-up system in place if Universal Credit fails, and he knows that most people on UC won't be able to make their money last a whole month unless they use it as they do now (split it into 2 fortnightly amounts) but the alkies won't, they will blow it all in less than 2 or 3 days, then what do they do: steal, mug someone, commit crime etc, in fact I suspect he's counting on this to happen.

IDS you are one sick puppy.

Wed, 2012-10-31 15:42 — Posh Tosh (not verified)

I do believe that all politicians ought either have been in the armed forces, or done a bin-round, or worked in dark satanic factories, as there are no coal mines left to let rich boys work themselves away from defending the country in the forces, for at least four years, before they pretend they know everything about nothing instead of nothing about anything.

Wed, 2012-10-31 10:07 — 55DegreesNorth

I regularly meet some contractors who are working on the IT side of UC. They pour scorn on the idea that the systems will be ready on time or whether they will ever work as planned. Meanwhile, a friend who is up there in the DWP tells me anyone not already involved in the project is staying well out of the way. It's squeaky bum time all right.

Tue, 2012-10-30 21:42 — Raymond Ingrey (not verified)

When do all the old people in Britain get themselves together and point out to the people just how out of touch the Priminister and his cabinet are.
They could do this by showing the younger generation just how much this bunch are like the Eden MacMillan,Douglas-Hume era Tories.
To call them Inept would be an insult to inept people.
They have no idea or the ability to imagine living the life of ordinary Brits.
However just like the "You have never had it so good" Macmillan, Hume period they were out of touch and living in a world that only they thought was doing fine.
Money spent poorly no real interest in improving Britain ability to manufacture goods only financial companies and Real Estate prospered.
Now Britain has returned to these same policies that failed them then lead by Clones of a bygone era. That has the makings of a Brit comedy only for the people it is a not funny. It wasn't then and it isn't now.

Tue, 2012-10-30 19:32 — Hugh C Markey (not verified)

Universal benefit sounds like it will be a universal b***s-UP.
And please do not alphabetize Duncan-Smith. IDS sounds like an uncomfortable medical procedure.

Proctologist

Tue, 2012-10-30 23:10 — Benjamin Rae (not verified)

Had similar thoughts on him

Tue, 2012-10-30 16:00 — Frank cooney (not verified)

One of the very sad things in all this is the way a lot of disabled people have been thrown off their benefits by this awful company ATOS, this French company have been exposed on TV by dispatches ch4 & panorama, but the government are just plodding along & causing deaths, Google it, this I think could lead to prosecutions, they already have had a number of Doctors & nurses referred to the medical council.

Tue, 2012-10-30 19:09 — Posh Tosh (not verified)

The LibLabTory Government do no care on a(tos)s.

Downwards and downwards and back to pre-Victorian times.

It's their birthrights.

Tue, 2012-10-30 19:10 — Posh Tosh (not verified)

one a(tos)s

Tue, 2012-10-30 16:00 — Frank cooney (not verified)

Tue, 2012-10-30 15:26 — gedon (not verified)

It's going to cost money, cause chaos, misery and probably take lives. They don't care, they just want ot be seen to be bashing the scroungers, but as we know most of these people who claim benefits are the 'working poor', in other words Britains 'real' strivers. And so what if a few disabled or mentally ill people commit suicide, at least it will help reduce the deficit, along with all the elderly people who are going to freeze to death this winter.
Well done IDS!

Tue, 2012-10-30 14:16 — frances smith

seems to me that the whole thing is going to fail miserably, and in some ways that at least creates an opportunity for starting all over again.

can i give a bit of advice to the next labour government on how to start from the beginning and build a welfare system that works, as this is probably what will need to be done after the wreckage left by duncan smith.

why don't you actually talk to people who have claimed benefits, and ask them what would have been helpful to them, rather than assuming they are all out to cheat the system, a bit of serious customer feedback on why the benefits system fails would be very useful.

far better, i would suggest, than asking a former investment banker to do the job, who quite clearly has/had no idea whatsoever. no matter how impressive his gene pool may have been to those fixated on everything being about sex!

and don't forget to sack liam byrne.

Tue, 2012-10-30 12:57 — Mr Bingham (not verified)

Tories enjoy inflicting misery and hardship upon the weakest in society because they do not have a voice.

In addition to this everyone outside of the Tory circle are considered Plebs that should only be seen and not heard.

Many, many people say that there is a class war in it's making and to be honest I would not disagree because the evidence is there before my eyes. The problem is that the evidence is tangible and increasing as each month passes.

Tue, 2012-10-30 12:52 — kenelmist (not verified)

IDS has no record of running anything. When he was leader, he was embarrassing.

Tue, 2012-10-30 11:13 — Flynn.V (not verified)

The idea that Universal Credit will make work pay is a smokescreen for the conditionalities which are going to be applied to the claims of those already in employment. The state will be breathing down the necks of those in low-paid full and part-time work, with regular demands that they work harder, for more hours and for higher pay, regardless of whether this is possible or not.

Wed, 2012-10-31 22:40 — Leon Wolfeson (not verified)

Worse, Flynn, they're going to strip everything - including housing benefit - from people who don't meet their often-impossible demands. And even the lower amounts they paid to stop people actually starving will now be treated as a loan...so people will be forced onto the streets with remarkable frequency!

Tue, 2012-10-30 10:34 — Barrie J (not verified)

Every other coalition policy initiative has been an unmitigated omnishambles and this one is going to be different?
I'm beginning to see a pattern emerging and there is definitely a common link.