Five reasons Universal Credit will fail - even if they sort out the IT

Duncan Smith's crusade to force eight million people onto a botched new benefit is a recipe for debt, eviction, poverty and distress.

Another week, another government blunder on Universal Credit. Most attacks on Iain Duncan Smith have been about the administrative shambles at the top. But there are problems just as serious on the ground - and eight million unemployed and low income claimants will suffer the consequences. Here are five key problem areas we can expect to hear more about as a larger number of claimants are transferred to the new benefit.

1. Claimants have to manage benefits online

Under the new system, all benefit claimants will ultimately have to apply for and manage their benefits online. Many will be unable to do this. Citizens Advice Bureau (CAB) research released last month suggests two-thirds of their clients will fail without significant help. For some, it's a lack of digital skills and confidence. The government promises support - but it's hard to imagine austerity-obsessed ministers laying on tailored training sessions for several million claimants. Cash-strapped charities and councils are not likely to plug the gap either.

It's also not enough to be digitally literate. Computers and the internet are expensive, particularly on £71.70 a week. Libraries are not the obvious solution they may first seem - 1,000 will have closed by 2016, travel is costly and even impossible in rural areas, and public computers are often time-limited and oversubscribed. 

2. Tenants pay their landlords directly

Universal Credit rolls housing, unemployment and other benefits into one. Currently, around a quarter of housing benefit claimants have their money paid to their landlord directly, because they are seen as "vulnerable" or have previously missed payments. The government wants them to take responsibility for paying rent themselves, and will transfer the money into their bank accounts for them to do so. 

Landlords recently warned this may stop them letting to Universal Credit claimants as they fear tenants will be unwilling or unable to pay their rent. Arrears rose from around £20,000 to £140,000 among council tenants in Torfaen, Wales, just seven months after a pilot of the new system began. Housing associations in some trial areas have had to hire new staff to chase up residents in arrears.

Part of the problem lies in access to banking. Nearly half of the CAB's clients were unable to pay priority bills using a bank account:

Some need help understanding how they can use direct debits and standing orders. Others do not feel comfortable using services that seemingly undermine their ability to control the money that comes out of their pocket. Money may be tight, or they may fear becoming overdrawn and incurring charges.

But much of the problem is linked to the challenges of budgeting on a low income, something not helped by a further part of the Universal Credit reforms - monthly payments.

3. Claimants receive the benefit monthly

Paying out Universal Credit in a single monthly sum makes budgeting far more difficult as money has to be made to last a far longer period. Claimants currently receive different benefits across the month. According to the CAB, many will struggle to "adapt existing patterns of managing their money to spread their costs". Paying housing benefit to claimants only makes the challenge harder. It will be the first time some have had thousands of pounds lining their accounts. 

"If you have more money, it is tempting to use it to cover other, more immediate pressures," said Richard Goodman, a CAB manager in Hammersmith, where Universal Credit has already been rolled out. Keeping warm, getting three meals a day and replacing children's school shoes are often greater priorities than rent.

Some CAB clients also lacked basic budgeting skills. As with IT, there are fears that government funding for support will be inadequate.  Goodman, whose branch currently offer budgeting lessons to those requesting it, says: "We're worried we won't be able to satisfy demand."

4. Officials are unprepared for difficult cases

So far Universal Credit has only been piloted and rolled out in a handful of areas for several thousand claimants. Only the simplest cases - single, first-time claimants without dependents - have been included in the trials and phased launch. Goodman suggested this initial group is likely to be mainly young people, and to pose fewer problems than other claimant types. One can only assume Duncan Smith is more interested in a smooth rollout that appears "successful" than in learning from the harder cases - the long-term unemployed, immigrants, single parents, large families, the sick and the disabled. As Goodman put it:

It’s a soft launch. It doesn’t stress-test the system. For instance, claimants will probably have greater digital literacy than others with more complicated circumstances.

If they’re dogmatic about the 2017 deadline, they’ll squeeze a lot of people onto universal credit without fully testing it. And that means systems crashing, people not being paid and lots of hardship and misery.

5. The cost of living has not been addressed

Budgeting to the last penny is tough on any income, let alone incomes under sustained attack. Half a million people have been forced to turn to food banks, and there is little to suggest the queues will shorten any time soon. With energy firms hiking prices, landlords increasing rents and affordable housebuilding slowing to a trickle, the rising cost of living means every penny has to go further for unemployed and low-income families.

Four in five new jobs pay under £8 an hour, and are often precarious. 2.4 million people are unemployed, chasing 0.8 million vacancies. Benefits have been slashed, capped, frozen and abolished across the board, their recipients stigmatised and sanctioned with ever greater ferocity.

All in all, shoving eight million people onto a botched new benefit in such circumstances is a toxic recipe for debt, arrears, eviction, poverty and distress. Will the Prime Minister evict Iain Duncan Smith, too, in a reshuffle before 2015? Sadly, even if he gets the chop, there seems little prospect of millionaire IDS  having to sign on to universal credit for a taste of his own medicine.

Tom Belger is a student journalist. Follow him at @tom_belger.

Work and Pensions Secretary Iain Duncan Smith. Photograph: Getty Images
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Erdogan’s purge was too big and too organised to be a mere reaction to the failed coup

There is a specific word for the melancholy of Istanbul. The city is suffering a mighty bout of something like hüzün at the moment. 

Even at the worst of times Istanbul is a beautiful city, and the Bosphorus is a remarkable stretch of sea. Turks get very irritated if you call it a river. They are right. The Bosphorus has a life and energy that a river could never equal. Spend five minutes watching the Bosphorus and you can understand why Orhan Pamuk, Turkey’s Nobel laureate for literature, became fixated by it as he grew up, tracking the movements of the ocean-going vessels, the warships and the freighters as they steamed between Asia and Europe.

I went to an Ottoman palace on the Asian side of the Bosphorus, waiting to interview the former prime minister Ahmet Davu­toglu. He was pushed out of office two months ago by President Recep Tayyip Erdogan when he appeared to be too wedded to the clauses in the Turkish constitution which say that the prime minister is the head of government and the president is a ceremonial head of state. Erdogan was happy with that when he was prime minister. But now he’s president, he wants to change the constitution. If Erdogan can win the vote in parliament he will, in effect, be rubber-stamping the reality he has created since he became president. In the days since the attempted coup, no one has had any doubt about who is the power in the land.

 

City of melancholy

The view from the Ottoman palace was magnificent. Beneath a luscious, pine-shaded garden an oil tanker plied its way towards the Black Sea. Small ferries dodged across the sea lanes. It was not, I hasten to add, Davutoglu’s private residence. It had just been borrowed, for the backdrop. But it reminded a Turkish friend of something she had heard once from the AKP, Erdogan’s ruling party: that they would not rest until they were living in the apartments with balconies and gardens overlooking the Bosphorus that had always been the preserve of the secular elite they wanted to replace.

Pamuk also writes about hüzün, the melancholy that afflicts the citizens of Istanbul. It comes, he says, from the city’s history and its decline, the foghorns on the Bosphorus, from tumbledown walls that have been ruins since the fall of the Byzantine empire, unemployed men in tea houses, covered women waiting for buses that never come, pelting rain and dark evenings: the city’s whole fabric and all the lives within it. “My starting point,” Pamuk wrote, “was the emotion that a child might feel while looking through a steamy window.”

Istanbul is suffering a mighty bout of something like hüzün at the moment. In Pamuk’s work the citizens of Istanbul take a perverse pride in hüzün. No one in Istanbul, or elsewhere in Turkey, can draw comfort from what is happening now. Erdogan’s opponents wonder what kind of future they can have in his Turkey. I think I sensed it, too, in the triumphalist crowds of Erdogan supporters that have been gathering day after day since the coup was defeated.

 

Down with the generals

Erdogan’s opponents are not downcast because the coup failed; a big reason why it did was that it had no public support. Turks know way too much about the authoritarian ways of military rule to want it back. The melancholy is because Erdogan is using the coup to entrench himself even more deeply in power. The purge looks too far-reaching, too organised and too big to have been a quick reaction to the attempt on his power. Instead it seems to be a plan that was waiting to be used.

Turkey is a deeply unhappy country. It is hard to imagine now, but when the Arab uprisings happened in 2011 it seemed to be a model for the Middle East. It had elections and an economy that worked and grew. When I asked Davutoglu around that time whether there would be a new Ottoman sphere of influence for the 21st century, he smiled modestly, denied any such ambition and went on to explain that the 2011 uprisings were the true succession to the Ottoman empire. A century of European, and then American, domination was ending. It had been a false start in Middle Eastern history. Now it was back on track. The people of the region were deciding their futures, and perhaps Turkey would have a role, almost like a big brother.

Turkey’s position – straddling east and west, facing Europe and Asia – is the key to its history and its future. It could be, should be, a rock of stability in a desperately un­stable part of the world. But it isn’t, and that is a problem for all of us.

 

Contagion of war

The coup did not come out of a clear sky. Turkey was in deep crisis before the attempt was made. Part of the problem has come from Erdogan’s divisive policies. He has led the AKP to successive election victories since it first won in 2002. But the policies of his governments have not been inclusive. As long as his supporters are happy, the president seems unconcerned about the resentment and opposition he is generating on the other side of politics.

Perhaps that was inevitable. His mission, as a political Islamist, was to change the country, to end the power of secular elites, including the army, which had been dominant since Mustafa Kemal Atatürk created modern Turkey after the collapse of the Ottoman empire. And there is also the influence of chaos and war in the Middle East. Turkey has borders with Iraq and Syria, and is deeply involved in their wars. The borders do not stop the contagion of violence. Hundreds of people have died in the past year in bomb attacks in Turkish cities, some carried out by the jihadists of so-called Islamic State, and some sent by Kurdish separatists working under the PKK.

It is a horrible mix. Erdogan might be able to deal with it better if he had used the attempted coup to try to unite Turkey. All the parliamentary parties condemned it. But instead, he has turned the power of the state against his opponents. More rough times lie ahead.

Jeremy Bowen is the BBC’s Middle East editor. He tweets @bowenbbc

This article first appeared in the 28 July 2016 issue of the New Statesman, Summer Double Issue