Speech

Implementing Universal Credit

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

The implementation of Universal Credit in the Pathfinder and plans for rolling-out the next stage.

The Rt Hon Lord Freud

I am very pleased to be with you today – to update you all on the implementation of Universal Credit in the Pathfinder and on our plans for rolling-out the next stage.

But first let me reflect on just how far we have come with our welfare reforms since I spoke to delegates at the Capita Conference in January.

From the outset we have stressed our commitment to create a welfare system that is fit for the 21st century. One that has incentives for people to get into work and increase their hours that is fair to the people who use it, and fair for the taxpayer who pays for it.

A major part of these reforms were brought into force in April. Including:

  • removal of the spare room subsidy for working age tenants in the social sector, so that Housing Benefit no longer pays for spare rooms
  • the Personal Independent Payments which replace Disability Living Allowance for working-age claimants
  • the benefit cap, which began rolling out as of yesterday, setting a fair limit to what people can expect to get from the welfare system – so that claimants cannot receive more than £500 a week or £26,000 a year
  • and the early roll out of Universal Credit

These reforms will enable us to provide a fairer deal for the taxpayer, continue to protect the most vulnerable and put work at the heart of the system, back where it belongs.

Universal Credit is at the heart of these reforms – designed to simplify the system and make work pay.

Three million households will be better off under Universal Credit. Our biggest concentration will be on incentivising workless households, where the impact of someone moving into work will be greatest for them and their family. This includes investing an additional £200 million into childcare support, on top of £2 billion already spent under the current system. This will mean that around 100,000 more families with children will benefit from childcare support for the first time by removing the hours rule.

We launched the Universal Credit Pathfinder in the North West of England as planned on 29 April. Ashton-under-Lyne began taking new claims to Universal Credit and Wigan, Oldham and Warrington started to trial the new Claimant Commitment. This was a big step forward for the department and government. Our teams in Ashton, Glasgow and Bolton and our local partners were incredibly well prepared and handled the Pathfinder launch with great passion and professionalism.

The successful launch and operation of the Pathfinder in Ashton-under-Lyne put us in a strong position for the next step in our progressive roll out.

And on the 1 July, Wigan also began taking new claims to Universal Credit. This will expand to Warrington and Oldham at the end of July (29th) – making our Pathfinder complete.

This is in line with our commitment to roll-out Universal Credit in a careful and controlled way. Starting small, testing, learning lessons over time and refining where necessary before progressive roll-out from October and full transition by 2017.

Since going live, Pathfinder Jobcentre staff have answered a host of enquiries, booked appointments and signed numerous Claimant Commitments. And I am pleased to say that we are already seeing people moving into work as you would expect with this claimant group.

I am also pleased to confirm the majority of claims are being made online, it shows how much we have to learn that despite an initial assumption that around 50% of claims would be online, as I’ve seen firsthand it is actually over 90%. We are seeing that claimants are making use of the internet services provided by the local authorities, and I was surprised to see that around a quarter of visits to the Universal Credit portal were made on mobiles, despite there not yet being a mobile app! This shows that people are able to negotiate the system pretty smoothly, which is very encouraging.

Last week the Secretary of State, Iain Duncan Smith set out the next stages for Universal Credit. And I am pleased to be able to update you on these plans in person today.

Starting from October, the national roll-out will be comprised of 3 strands.

First, across all Jobcentres we will roll out components to drive the cultural shift under Universal Credit. Notably 20,000 Jobcentre Plus advisers will be retrained to deliver the Claimant Commitment and enhanced jobsearch support nationally. And 10 in-work conditionality pilots will test how best to encourage claimants to progress in work.

Second, we will roll-out improved access to digital services across Jobcentre Plus. 6000 new computers will be installed across the country, embedding digital technology and ensuring that jobseekers become used to online transactions.

Third, expanding on our early approach in the Pathfinder and our plans to deliver Universal Credit safely, we will rollout the current Pathfinder process on a phased timeline to a further 6 Jobcentres across the regions/countries: Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton.

This means we will be rolling out Universal Credit in areas of England, Wales and Scotland.

As claimant’s circumstances change the Pathfinder will test more complex processes, such as a partner joining the household, perhaps bringing dependent children, a claimant becoming sick, getting a job with fluctuating earnings, or moving address outside of the Pathfinder location.

Our priority is to deliver Universal Credit safely and securely over a 4 year period to 2017. This is a huge change from the outdated and overburdened system we have endured and grappled with for decades – and so we are taking the time to do it properly.

This includes making sure we have the right support and resources in place to support claimants of Universal Credit.

Earlier this year I published the Local Support Services Framework, which was developed in partnership with local authorities, who are our partners and other organisations working directly with claimants. This framework is a key element in ensuring we fully support those claimants who have complex needs to help them make and manage their Universal Credit claims, and prepare for work.

The feedback we received on the framework was invaluable to us and it is being used in a number of ways.

Firstly, it is helping to finalise the design of a revised framework. Indeed, we are continuing to work on key areas such as how funding will be arranged. We are working on these issues through the Local Support Services Taskforce, as well as with a range of stakeholders to develop a way of funding that delivers positive outcomes for claimants and value for money for the taxpayer.

The feedback will also feed into the development of overarching and local partnership agreements, which will be put in place in time for implementation of Universal Credit. Those who have fed back have told us that each person, no matter what their needs, can be helped and that the delivery of support services must look beyond categories to ensure this happens.

I am wholeheartedly in support of this approach – one of the key principles behind Universal Credit is that it is designed to cater to each individual and is not a one size fits all solution.

However, I believe we have an opportunity here to pull existing funding streams together to make the most of services that are already in place and that could add enormous value to the Local Delivery Partnerships. Indeed, whilst I have already confirmed that new money will be available I have also made it clear that the approach we have outlined is not entirely dependent on new money. Local services will need to adapt in order to stay relevant and provide appropriate support to people that they are responsible for helping. But let me take a moment to reflect on an overriding theme that was repeated again and again in the feedback. This was the firm belief that partnerships really are the key to delivering this support to Universal Credit claimants.

This is something I continue to support and we will be listening to your experiences and highlighting some of these inclusive and innovative partnerships in the revised framework document which will be published in October.

And we are not only listening to you but we are learning from you too. The Local Authority-led Pilot Programme is the most exciting initiative we’ve undertaken with the local government sector for quite some time – all 13 councils involved have picked up the challenge and they’re driving progress: integrating services, making things simple for claimants, and shifting the focus from receiving benefits to finding work.

For example I’ve heard about how Lewisham Council in South London has developed a structured triage approach to identify vulnerable people who may require additional support with the transition to Universal Credit.

Claimants are contacted over the phone to discuss their skills and experience across the financial, digital, housing and employment spheres. Scores are then assigned to the claimants answers. If they are considered ‘vulnerable’ a further support appointment will be triggered, where claimants are provided with tailored support plans and referred for specialist help where needed.

And to assist with monthly budgeting, Birmingham City Council has developed a budgeting tool which can be accessed through its digital log book. This allows all new tenants to create monthly budgets, helping them to identify peak spends for example in September when school uniforms need to be purchased, or in winter when extra fuel payments will be made.

But above all the pilots are teaching us invaluable lessons about partnerships.

Many of the pilots are building on strong partnerships that are already in place. Through others we’re learning that time and care is needed to explore how we can share ambitions and resources with a range of local agencies in an innovative way.

For these reasons I am very pleased to announce today that we will be extending all the Local Authority-led Pilots for a further 3 months to strengthen the learning we are already seeing emerge from their local activity.

We also plan to publish emerging findings as soon as we can. This is one step of many that can be taken to ensure that learning is shared. In addition, in line with a request from the local authority representative bodies, we are now working with the pilots to ensure greater alignment with Local Support Service Framework.

Our Direct Payment Demonstration Projects are also helping us to learn who needs additional help. Paying housing costs direct to the claimant is an integral part of Universal Credit and an important way of helping people to manage their own finances and become more independent. But we recognise that some people will struggle with the move to direct payments.

The key to making direct payments work will be our ongoing collaboration with landlords to understand tenants’ ability to cope with direct payments. This will be central to the decision on who to pay the rent to when someone is not be able to manage with direct payments – for instance, because of alcohol or drug dependency or learning difficulties.

Even with this safety net in place, I know there are still concerns about what happens if your tenant falls into arrears.

Even though the findings from the Demonstration Projects have so far been positive, I don’t intend to understate the risks – which is why I have taken the decision that once the arrears reach the equivalent of 2 months rent, we will switch to managed payments to the landlord.

Summing up

The Universal Credit Pathfinder has launched successfully and is running as expected. The roll-out of Pathfinder is proceeding as planned.

Last week we set out the next stages for Universal Credit following the successful launch in April. This represents good progress.

We have found both the Demonstration Projects and the Local Authority Pilots incredibly valuable and are extending both to ensure our learning continues and best practices agreed.

While the Universal Credit reform is both vital and radical, our approach is careful and controlled. It marks yet another important step in the government’s welfare reforms – simplifying the benefit system and tackling welfare dependency by making work pay.

Published 16 July 2013