UNISON Briefing |
April 2012 |
Why Universal Credit is an issue for local government
Introduction
In October 2013 the biggest change to the benefits system since 1945 will begin. The changes are profound. Over 1 million people will be affected in the first 6 months alone and by the time the new system is fully in place, in 2017, it will be relied on by as many as 6 million households – 19 million people.
Universal Credit will affect anyone who claims or who will claim
- Child Tax Credit
- Working Tax Credit
- Housing Benefit
- Income Support
- Job Seekers Allowance
- Employment and Support Allowance
- Support for Mortgage Interest
As the Welfare Reform Act made its way through Parliament, politicians were lobbied furiously by charities and others, rightly concerned about the impact on people’s income and their ability to meet their housing costs.
But no-one has been talking about the service.
At the moment there are no answers to the following basic questions about the Universal Credit service
- How will someone apply locally?
- Where will they apply locally?
- What documents will they need and where will they take them locally?
- Where will there be a local ‘Universal Credit’ office be?
- What office accommodation will be used?
- How many staff will be needed?
- How does someone get face to face advice and help if they have a problem?
In fact all the indications are that the Government is not even planning to deliver a local service.
But we know that when things go wrong people will turn to their local council, their local councillor and their local MP for help.
And if people do not get their Universal Credit payment on time, if they lose their home, or they are unable to feed their families the local council will have to step in.
Applying for Universal Credit
How will someone apply locally? Where will they apply locally?
There is no discussion taking place between each individual local council and the Government about what the local service will look like and what it will need in terms of staff, offices, interview rooms, places where people can fill in forms and take their original documents (such as tenancy agreements, passports, birth certificates and bank statements) to have them verified.
On Line
The Government says it wants applying for Universal Credit to be ‘digital by default’ – that means that it expects people to apply ‘on line’.
The service is being planned on the basis that 80 per cent will do so.
While the Welfare Reform Act was being debated DWP figures showed that only 17 per cent of people apply online for Jobseekers Allowance. The percentage has increased since then but DWP are planning on the basis that only 50 per cent will apply online in October 2013.
The Office for National Statistics says that 31 per cent of the people who have the lowest incomes – the very people who will need to apply for Universal Credit – do not have access to a computer or may not be able to use one.
Call Centres
For people who are not able to apply on line the Government is planning to use ‘Call Centres’ but the numbers people will have to ring will not be free. Calls from a landline to 0845 numbers are expensive and from mobiles they can be very expensive. You start paying from the moment you join the queue.
"The starting point, I said to our telephony collaboration teams based in Newcastle, was just think of a contact centre, but it has got no people in it and think of an operating model that has got no back office, and start from there," said Steve Dover (Director of Major Programmes at DWP). There will be a contact centre with staff as well and voice recognition technology, but the public will be "nudged back" to the web channel, he added.
Locally
The Government is silent on where people will be able to apply locally. Some people have suggested that it will be the local job centre but in some local authorities there is no jobcentre and the nearest one is a £9 busfare away. The Government is in the process of closing 22 jobcentres and cutting staffing by over 10,000 – (although it has recently decided to recruit 4,000) just as the biggest change since 1945 is about to take place.
What about the local council?
At the moment the Government is saying that people will not be able to apply for Universal Credit at the local council offices.
What documents will they need and where will they take them locally?
At the moment the Government says it has not decided what documents people will need to produce.
But we can be pretty sure that it will include bank statements, birth certificate or passports, tenancy agreements and probably many more otherwise the Government will be making it easier for people to commit Universal Credit fraud.
Many people are worried about identity theft. They just don’t trust sending vital personal documents through the post fearing they will be stolen, copied or lost altogether. So they will need somewhere locally where the documents can be scanned and verified just as they do now at the local council office.
Who will provide Help and Advice
There are lots of reasons why people will need help and advice
- Help with the application, with providing the right information, and with advice on the documents they need to provide
- Helping people get the benefits they are entitled to
- Sorting out payments that are wrong, haven’t arrived and getting help before they do
Where will the Help and Advice be when circumstances change
Universal Credit is a ‘live’ benefit – people’s lives change and the amount people get will change as their circumstances change. They include:
- Getting a job/Losing a job/Fewer or extra hours at work
- Separation/Divorce/a new partner
- Changing address/ rent increasing or mortgage arrears
- A child being born or leaving full time education
- Changing childcare arrangements
Paying and Calculating Universal Credit
The Government is going to pay Universal Credit MONTHLY – that is a big change for people and it will create problems for people on tight budgets that loan sharks will exploit. If payments are wrong or late people will be in real difficulty. Scraping by for a day or a week is one thing but a month is a different story.
Universal Credit is a household benefit, not an individual benefit, and it will be paid to one member of the household
So when one person applies – the Government will want documents and details from the whole household (including partner and adult children) and they will be drawn into the Universal Credit system.
PAYE data supplied by your employer to HMRC will be used to calculate Universal Credit. But the specification for the tax people was based on PAYE data being 90 per cent accurate – so 10 per cent of Universal Credit calculations could be wrong and will need to be sorted out. Then there are questions about people who are self employed or who work for small businesses that do not file PAYE returns electronically.
Price Waterhouse Coopers warns that the tight timescale in place could cause major issues for employers and make glitches likely when the new system is first introduced.
"......we could well be heading for a perfect storm given the scale and timing for change. Real Time Information will see employers gathering and transmitting considerable volumes of data, beyond what is already on the payroll system." John Harding, tax director at PwC (11 January 2012)
A recent survey from KPMG found that employers were far from ready to implement RTI.
According to a KPMG survey of 70 businesses, two thirds have not yet started to plan for RTI’s implementation. Almost a fifth (18 percent) were not even aware of the upcoming RTI deadlines and the likely impact of the change. The data suggested that those who had looked at the RTI requirements had identified issues to overcome as 34 percent of respondents noted specific concerns regarding RTI. (6 March 2012)
A briefing from the Low Incomes Tax Reform Group identified the following issues
These are big changes for your constituents and have implications for housing, schools, social services, poverty, and advice and benefits. The financial consequences for councils could be huge. Some Chief Executives say these changes are at the top of their risk registers.
Questions for you
Has your council received a report on the changes?
Has your council considered what they will mean locally for constituents, for schools and for the services the council provides?
Has your council considered what role the local council could and should be playing to ensure that there is a quality local service available and what the service will look like for your constituents?
Has your Council considered the following Human Resources issues?
· Future Service Delivery Model (where do LAs fit in) – critical need for local authority level discussion with DWP
· Future LA Service Delivery model; IT; links to DWP IT systems; staffing levels; accommodation; public access needs; budget requirements
· Future staffing structure and projections
· Recruitment and Retention
· Training/ Skills development for existing staff
· TUPE
· Quantifying costs/claims on DWP
Has your Council told the Department of Work and Pensions that there must be a quality local service where people can apply for Universal Credit, get documents verified, get support with budgeting and protection from loan sharks and get quality help and advice?
For further details contact
Pete Challis
National Officer (Local Government Service Group)
020 7121 5332
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