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Government dismisses Work and Pensions Committee UC reform proposals “out of hand” and “simply ignored” others

14 January 2021

The Work and Pensions Committee of MPs has published the Government response to its report Universal Credit: The wait for a first payment.

The report, published in October 2020, drew on evidence from both organisations and individuals which suggested that a significant proportion of people faced financial and other difficulties during the wait for a first Universal Credit (UC) payment.

Among the Committee’s recommendations was the introduction of a starter payment for all people claiming for the first time, equivalent to three weeks of the standard allowance (around £288 for a single person over 25).

However, in its response, the Government says that there is “no need” for a starter payment and refuse to conduct or commission any research on possible links between UC and rising foodbank use, increased rent arrears and psychological distress.

The Government has also refused to commit to extending beyond April the £20 weekly increase in UC, brought in at the start of the coronavirus pandemic last year.

Stephen Timms MP, Chair of the Work and Pensions Committee, said:

“Our report put forward a set of practical and costed proposals intended to offer a constructive way of mitigating the worst effects of the wait for a first payment of Universal Credit. The Government has dismissed those proposals out of hand—and in some cases, simply ignored them.

Worst of all, Ministers are refusing point blank even to do any research that might help them to understand the impact that the five week wait is having on people.

Our inquiry heard that the wait may be linked to rising reliance on foodbanks, spiralling rent arrears and even increased psychological distress. It’s astounding that the Government won’t even look closely at those findings, let alone do anything about them.

The new lockdown will have brought a renewed sense of financial dread for many families. The Government could have softened that blow by announcing that it would maintain the £20 weekly increase in UC past April. Instead, it has chosen to keep households in the dark over whether this much-needed lifeline will continue.

We are not alone in pressing for action on the wait. Voices from across the political spectrum, inside and outside Parliament, are calling for change. It’s time DWP took the blinkers off and started to look at the real impact of the five week wait.”

During the inquiry, the Committee heard from front line organisations including Citizens Advice and the Trussell Trust on the hardship experienced by many people when waiting for a first UC payment. The National Audit Office report from July 2020, Universal Credit: getting to first payment, found that the wait for an initial award could exacerbate financial difficulties.

On starter payments, both the Trussell Trust and a July 2020 report from the House of Lords Economic Affairs Committee called for all new UC claimants to be given non-repayable grants.

Ken Butler DRUK’s Welfare Rights and Policy Adviser said:

“The Chair of the Work and Pension’s Committee’s comment that it’s time the “DWP took the blinkers off and started to look at the real impact of the five week wait” is an understatement.

 Back in June 2019, a report by the Disability Benefit Consortium found that the 5 week wait for Universal Credit was having a devastating impact on disabled people.

The impact of on disabled people having less money included  struggling to pay for food (70%), driving a significant number to food banks (35%) and a worsening of people’s health, in particular their mental health (85%) and again, most worryingly driving people to consider suicide.

This situation is has worsened following the Coronavirus pandemic.

A system of starter payment grants would undoubtedly be a welcome and necessary boon to disabled people moving to Universal Credit, as would its temporary £20 week increase being made permanent.

However, those disabled people still receiving legacy benefits such as ESA must not be forgotten and the £20 week increase must be also be awarded to them.”

The Work and Pensions Committee’s October 2020 report Universal Credit: the wait for a first payment is available from parliament.uk.

Universal Credit: the wait for a first payment: Government Response is also available from parliament.uk.