Universal Credit – how will it affect Sheffield?

End-Hunger-logoDavid Price of our local group in Sheffield summarises some of the concerns about the change to Universal Credit.

At Sheffield Church Action on Poverty’s Civic Breakfast on 15 March, the theme was ‘Universal Credit and Food Banks.’  The event revealed considerable anxiety about the impact of Universal Credit (UC) on vulnerable people in Sheffield and the pressure that this would place on food banks in the City. Since then, I have had a look at material about UC from Citizens’ Advice, both nationally and locally.

UC started with the best of intentions. Ian Duncan Smith wanted to simplify the benefit system, to harmonise the rules of the various working-age income-related benefits, and to ensure that  people could move easily from benefits to work. But I doubt whether the architects of the scheme listened carefully to benefit recipients’ views on how best to achieve these objectives. Instead, according to one well-placed observer, they decided to use this new scheme to try to “change people’s behaviour”, regardless of the real-world problems that people faced. Moreover, the Treasury insisted that the scheme should contribute to the ‘austerity’ expenditure cuts. By March 2016 Treasury interference had gone so far that Duncan Smith resigned in protest at further cuts to disabled benefits in a Budget which reduced tax on high-earning tax-payers.

Here are some of the problems which people receiving benefits will face:

  • Access to the new scheme is online, regardless of the fact that many benefit recipients lack both computer skills and equipment. People with a poor grasp of written English will find this particularly difficult.
  • There is a waiting period of at least five weeks (in many cases much more) for one’s first benefit under the new scheme.  Since many of those affected have no savings, this will lead to increased debt and greater reliance on food banks. The Trussell Trust has reported a 30% average increase in food bank usage six months after roll-out.
  • Whereas Housing Benefit was paid direct to the landlord, the housing element in UC is normally paid to the tenant, creating risks that people will use their rent money for other urgent needs. Eviction and homelessness could result. Rent arrears could destabilise the finances of local Councils and Housing Associations.
  • Under UC, premiums and additional tax credits currently available to disabled people are reduced or disappear altogether. Citizens’ Advice Sheffield has calculated that disabled people will lose between £42 and £99 a week according to their circumstances. Those actively seeking work are hardest hit.
  • Citizens Advice reckons that nationally 2.1 million low-income families will lose an average of £1,600 a year when they move on to UC from the old benefit system. Moreover, those not paid monthly, like self-employed workers, will face financial losses.

All this will increase poverty in Sheffield. At least 60,000 people in the City will eventually claim UC. The roll-out in Sheffield is now due from November 2018 onwards. This has at least given a breathing space for preparations. The City Council is working with DWP, Citizens’ Advice and other organisations. Libraries and other organisations should be able to offer digital access. Sheffield Credit Union could help people to save for the gap in income which occurs in the transition to UC.

It is surprising that there has not been more of an outcry about UC. This may in part be due to its complexity. On 19 April I joined in a vigorous demonstration against UC outside the City Hall organised by Disabled People against the Cuts, but we needed more demonstrators.  Citizens Advice’s excellent analyses helped to persuade DWP to make a few changes last November, like cutting the delay in receiving UC from six to five weeks. But most of the worrying features of the scheme remain.

Our new Bishop, Pete Wilcox, recently wrote to Esther McVey, Secretary of State for Work and Pensions, expressing concern about the adverse effects of UC and about the risk that policies like this could make food banks a permanent feature of our society. Bishop Pete endorsed the End Hunger campaign’s call for a concerted Government strategy to end household food insecurity.

 

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