CAB - 7 Oct 2020 - 10 Oct 2020 - Advice

Worries over roll-out of Universal Credit

NORTHERN Isles MP Alistair Carmichael has warned that the roll out of the government’s new Universal Credit benefit will not address in-work poverty, amid growing concerns there will be far more losers than winners under the new system.

Shetland Citizen’s Advice Bureau is appealing for more volunteers, who will be trained in Universal Credit to handle an anticipated surge in case load once the benefits system is fully established.

Universal Credit is a new benefit for people working on a low income or out of work, and it merges together a number of support payments including housing benefit, child tax benefit and income support.

On Monday Carmichael warned the secretary of state for work and pensions Esther McVey that the government’s underfunding of Universal Credit, which dates back to a cut made by then chancellor George Osborne in 2015, could undermine the whole purpose of the benefits reforms. The government has since offered more transitional funding, but this only exists until 2023.

Following questioning in the House of Commons, McVey said that an announcement would be forthcoming in two weeks time following discussions with the chancellor.

Northern Isles MP Alistair Carmichael. Photo: Shetland News/Hans J. Marter.Northern Isles MP Alistair Carmichael has expressed concern over the roll-out of Universal Credit. Photo: Shetland News

Carmichael said later: “The secretary of state’s coy answer will do little to reassure the millions of households across the UK that are suffering as a result of mistakes made in the Universal Credit process.

“The cuts that the then chancellor made back in 2015 have left around 3.2 million households on average, £50 a week worse off. A large number of those households are struggling families with children.

“Ministers need to learn from what we have seen in the roll out so far, and admit that in some areas, they have not got it right. By returning the work allowances to their original levels for families with children, 9.6 million parents and children would be able to keep more of their own money.

Work is the best route out of poverty, and universal credit was intended to facilitate that. At the moment, it is doing the exact opposite, locking more working families in poverty.

“If the chancellor takes no action in the budget in two weeks’ time, then the warnings from John Major and Gordon Brown that Universal Credit could become Theresa May’s poll tax look increasingly accurate.”

Universal Credit “went live” on 26 August in Shetland, which is one of 29 local authority areas in Scotland where the benefits system has been introduced.

Shetland Citizen’s Advice Bureau service manager Karen Eunson said the impact of the change had yet to become visible but the local CAB had trained all its advisors in Universal Credit and the kind of issues it was raising for clients.

This included sessions from a specialist trainer from the Child Poverty Action Group as well as online training.

Eunson added: “It is too early yet to say what the impact of Universal Credit (UC) will be in Shetland and we haven’t as yet seen many people with UC issues but, in other areas of the country – as we all know from national reporting and debates in parliament – the introduction of UC has resulted in significant stress and hardship for people, an increase in debt and an increase in demand for food parcels.

“We are in contact with other bureaux across Scotland so we can learn from one another’s experience. On a local level, I am meeting regularly with the Jobcentre+ manager and we hope this communication will help us to deal with any problems as they arise.”

CAB manager Karen Eunson said the outreach programme has proved popular.Local CAB service manager Karen Eunson.

CAB can help anyone who is considering applying for UC by carrying out a “better off” check which allows them to see what money they would be entitled to on UC, compared to their current situation.

Anyone wanting to claim UC should contact the local Jobcentre+ which will help them to set up their online claim.

If Jobcentre+ staff identify that a claimant needs help with budgeting or increasing their IT skills, they will refer the person on to the SIC who will arrange help for them through CAB and/or adult learning.

Eunson added: “Anyone who has problems with their UC claim – such as problems with payments, sanctions etc – or who has money difficulties while on UC can come to CAB for advice and support.

“We have specialist benefits advisers who can help with DWP enquiries and appeals, and specialist money advisers who can help people to tackle debt problems.

“We can also help people in emergency situations when they have no resources to access food parcels and to apply for crisis funding from the Scottish Welfare Fund.

“Shetland CAB is prepared to help people and we will be monitoring the kind of UC issues people are having and the level of demand for our help.

“We are anticipating an increased workload as this is what has happened in all other bureaux when full service UC has been established. To help us to meet the anticipated demand, we would be keen to recruit new volunteers to train as advisers.

“If you can commit 6-8 hours per week and you would like to make a real difference to the lives of your fellow citizens, please get in touch with CAB on 01595 694696 or email sicab@shetland.org.”

Shetland Foodbank’s David Grieve agreed that it was too early to see a difference in food bank usage but said that the charity, part of the Trussel Trust, anticipated a rise in demand, with a fuller picture due to emerge in a couple of months.

He added: “If it follows the pattern that happened with other food banks where there has been a full roll out of universal credit, we would expect to see a significant increase in demand.

“It is not something we can really plan specifically for. Up till now we have been very well supported with donations of food, and financially, and we expect that we could still meet demand if that continues.”

Scottish social security secretary Shirley-Anne Somerville said on Tuesday that the chancellor must use his budget statement to make changes to Universal Credit and prevent more people and families being pushed into poverty.

Somerville was hearing from staff at one of Glasgow City Council’s support hubs about the issues faced by those in the process of claiming Universal Credit.

She said: “With every passing day, there is more and more evidence of the damage being caused by the roll-out of Universal Credit. Families already struggling to get by are facing further debt, rent arrears and misery.

“There are a number of changes that could be made in the forthcoming budget which would have an immediate impact. The benefit freeze which will see a cut of around £190 million in 2018/19 should be lifted.

“The appalling two child limit which has seen 3,800 Scottish families incomes reduced in the first year should be scrapped. Cuts to the Universal Credit work allowances should be reversed.

“Attempts to paper over the cracks, with a potential further delay to the introduction of managed migration are just tinkering in the margins of a flawed system and are not the answer. The system needs to be fundamentally changed to make it fit for purpose.”

She said that the Scottish Government had done as much as it could with its limited powers, but Universal Credit was a reserved benefit and the UK Government should heed the growing calls to halt the roll-out of Universal Credit and fundamentally review the system

UK Government welfare cuts were outlined in the annual Welfare Reform Report, which estimated a £3.7 billion drop in social security spending by 2021 in Scotland.