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What’s to be done about Universal Credit?

The roll-out of Universal Credit poses fundamental challenges for devolved services in Wales that demand leadership from Welsh Government, says Tamsin Stirling.

Barely a week goes by without Universal Credit featuring in the media in one way or another. Stories of hardship, increased use of foodbanks, rising rent arrears, the list goes on. A number of positive changes have been made by the Department for Work and Pensions as roll-out has continued, but many problems persist and there are serious concerns about the impact of the managed migration process (see this blog for example).

The roll-out of Universal Credit poses challenges at all levels in Wales; for individuals, communities, organisations and, not least, the Welsh Government which will inevitably pick up many of the consequences. Reflecting this reality, the Bevan Foundation has recently published a report which examines the interface between Universal Credit as a non-devolved area and devolved policies and services. It very deliberately goes beyond looking at those areas most immediately impacted such as housing, albeit that housing is identified as one of ten clusters of devolved policy areas affected by Universal Credit.

The core contention of the report is that the ongoing roll-out of Universal Credit provides both an opportunity and an obligation for the Welsh Government to provide leadership and co-ordination and ensure that that relevant policies and services take account of its implementation.

In practical terms, the roll-out of Universal Credit represents a significant transfer of responsibility from Westminster to the Welsh Government without any financial recompense. The report makes the case that this should not be an excuse for inaction; rather a stimulus to the Welsh Government to demonstrate leadership on a policy that will eventually affect a third of Welsh households.

Such leadership is also required because Universal Credit has the potential to significantly undermine, and even derail, Welsh Government policies, strategies and targets such as those on child poverty, prevention of homelessness, affordable housing and domestic abuse. Interface and passporting issues have already become evident, with changes to the Welsh Government policy on free school meals which mean that, from January 2019, Wales will have less generous provision of free school meals than England; this in a country where child poverty rates are projected (by the Institute for Fiscal Studies) to reach 40% by 2020. We have also seen demand increase for services funded by the Welsh Government such as financial and debt advice, food banks and mental health support.

Drawing on case studies of how organisations directly impacted by the early developments of Universal Credit responded, the report identifies five roles for the Welsh Government:

  • demonstrating leadership, e.g. a renewed emphasis on preventing and tackling child poverty
  • undertaking strategic analysis and thinking, e.g. assessment of preparedness and capacity of relevant services to respond to Managed Migration
  • co-ordination, e.g. a strategic information campaign on Universal Credit for those working in public and related services
  • making changes to how things are done, e.g. welfare reform proofing of policies and programmes – priority areas would include advice, digital and financial inclusion and business advice/support
  • using evidence of the impact of Universal Credit to lobby for change

It also suggests that the five ways of working set out in the Well-being of Future Generations (Wales) 2015 Act provide a framework for how the Welsh Government might respond to Universal Credit:

  • long-term – not just dealing with the immediate issues
  • integration – ensuring the response to Universal Credit and other aspects of welfare ‘reform’ are genuinely cross-government and that decisions on passporting have taken into account the impact on households as well as on government objectives, strategies and targets
  • involvement – really listening to the experiences of people in receipt of Universal Credit
  • collaboration – taking a leadership role in co-ordinating action
  • prevention – ensuring Welsh Government financial and other assistance is strategic and not just used as a sticking plaster

It is pleasing to see that the Welsh Government is commissioning comprehensive research to understand the impact of Universal Credit on the Council Tax Reduction Scheme and rent arrears in Wales. However, this is just one component of the national, co-ordinated response we need.

Tamsin Stirling is an independent consultant and a co-author of the Bevan Foundation report, which is available here

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