Category Archives: Universal credit
Conference – It’s a privilege to open this debate, a debate we approach with a passion and care.
That’s not a sign of weakness, that’s a sign of our strength.
We are so much stronger and our policy is so much better for the work of Unison’s Liz Snape, the TUC’s Kay Carberry, for the leaders of our ten biggest councils, to those from business and the third sector who’ve worked so hard on our youth jobs taskforce.
It’s stronger for the Labour councillors all over Britain who have helped us think radically about how we revolutionise the Tories’ failing back to work system.
It’s stronger for Sir Bert Massie, a pioneer of disability rights, for his taskforce, and for the hundreds of disability activists who have helped us think radically about how we make rights a reality for disabled people.
And it’s stronger for all our brilliant PPCs, fighting in key seats, who brought together residents to tell us how they want Labour to rebuild social security and a different kind of Britain.
And what sort of party would we be if we were not passionate about the stories we hear.
Like the woman I met with MS who told me how her carer, her teenage son, had lost all his support; it’s tough she said, for a boy to lose to that help when he knows his mum won’t get better.
Or the Remploy workers on a GMB picket line, fighting for work, who said to me: this isn’t just my job; this is my life.
Or the thousands of young people, I fight for in East Birmingham, hunting for work, who speak of the hundreds of CVs they send and never even get a reply – and still they keep going.
You know, there’s a Tory minister – and I’ll let you guess where he went to school – who tells us: our young people lack grit.
Well, let me tell you this: the young people fighting for work in East Birmingham have got a damn sight more grit than you need to get through Eton College.
Good people all over Britain hear these stories too.
And right now they’re asking themselves what kind of country are we becoming?
Once upon a time the Tories told us they cared: all those speeches in Easterhouse.
And people gave them the benefit of the doubt.
We were promised a Tory party that cared about the poor.
We were promised a welfare revolution.
We were promised we’re all in this together.
Three years on I tell you the jury is in.
A cost of living crisis.
A million young people out of work.
Long term unemployment at record highs.
Disabled people living in fear.
Child poverty rising.
Living standards hammered.
A promise that started in Easterhouse has ended with the spectacle of a Tory Minister, Michael Gove, blaming the poor for the temerity to turn up at a food bank.
He should be ashamed.
Three years on, I tell you the verdict is simple:
These Tories have let their prejudice destroy their policies.
And just as bad as the prejudice is the incompetence.
They say to err is human.
But if you want someone to really screw it up you send for Iain Duncan Smith.
And Conference that’s why we need to fire him.
But let me level with you, we won’t win power with a plan to roll back the clock.
To restore the status quo.
To ignore the calls for change.
The vast majority of people in this country believe the welfare state is one of our proudest creations.
It’s a mark of a civilised society.
But the vast majority don’t believe the system works for them or for modern times.
So let’s not be the defenders of the status quo, we must be the reformers now.
Today life is very different to the days of Beveridge.
The job for life is gone.
If you’re without a skill, you’ll most likely to be without a job.
Two thirds of couples both work – yet struggle with child-care.
Millions struggle on low wages while company profits rise.
Hundreds of thousands save for decades just to buy a home.
We’re aging, and yet fewer have a pension.
Getting a job, setting up home, working as a parent, caring for another, saving for the future.
These are the challenges of the real world you can’t solve by demonising others.
These are the challenges for One Nation Social Security.
And the truth is today the system doesn’t help.
So we need to change the system.
And build a new consensus rooted in our values, our party’s values, our country’s values.
Where we listen not to our demons but to the better angels of our nature.
Were we move from a language of division to a language of respect.
Where we match the personal responsibility to work.
With the collective responsibility to care.
These are the founding principles of the system we built in 1945, and these are the principles we must restore.
And today I want to tell you how.
With the ideas we’ve hammered out in hundreds of conversations and debates all over Britain this last year.
And the cardinal principal is this, full employment first.
Full employment has always been the foundation for rebuilding Britain. It was for Atlee’s Labour, it was for New Labour, it will be for One Nation Labour.
The Tories system doesn’t work.
So we need a better way.
So let’s start with a tax on bankers bonuses’ to fund a job for every young person out of work long term.
But let’s go further.
Let’s take the ideas – like Apprenticeship Agencies, pioneered in Labour Glasgow, Liverpool, Manchester, Sheffield, Newham and Wales.
And use them to revolutionise the path from the classroom to the career.
But, let’s go further.
Let’s stop fighting unemployment with one hand tied behind our back.
Let’s deliver a large devolution of power from the DWP to local councils.
Let’s build a new partnership between our job centres and town halls.
Let councils shape the programmes to get people back to work.
And let’s go further; let’s set a limit on the time we’re prepared to let people languish out of work.
Let’s invest in jobs for anyone out of work for two years, but say it’s got to be a deal.
We’ll invest in new chances, but if you’re fit to work, we’ll insist you take it.
Full employment first, that’s the Labour way.
Conference, any job is better than no job. But a good job is better than a bad one.
When the welfare state was started, its big idea was to ‘minimise disruption to earnings’.
Now our task is different. It’s to ‘maximise potential of earnings’.
That why we need Universal Credit to work.
So if the government won’t act to save it, we will.
The Tories’ system may prove dead on arrival. So we need a better way.
So, today we announce our Universal Credit Rescue Committee.
And I’m grateful to Kieran Quinn, leader of Tameside, the first pathfinder, for his offer to drive our work.
But, we’ll need more.
We’ll need a campaign for the living wage because it is wrong that we are spending the nation’s tax credits propping up low pay at firms with rising profits.
The deal has got to be simple. If your workers help you do well, then you need to give them a pay rise.
We the Labour party stand as the party of work – and the party of better off in work.
But, listen, if we want a new consensus, we need to remember this: if working people are strong, then Britain is strong.
So we should help working people.
Yet, those born in the turbulent world of the 1960’s, pay so much in and get so little out.
It’s wrong and we should change it.
Those in their 50’s are the people who’ve worked most, cared most, served most. And what do they get?
I’ll tell you, nothing.
So let’s bring back an idea from Beveridge.
Extra help for those who’ve paid their dues but are desperate for extra help to work again.
After a lifetime’s working or caring, I think it’s the least we can do.
Conference it’s a modest step – but it’s a big signal.
But, there’s something more.
Like most families in this country, I know that disability can affect anyone.
Therefore it affects us all.
Yet, today disabled people are threatened by hate crime, by Atos and by the Bedroom Tax.
Today we deny disabled people peace of mind, a job, a home and care – and I tell you that is wrong.
We need to change it.
So we will change the law so hate crime against disabled people is treated like every other hate crime.
And I say to David Cameron, Atos are a disgrace, you should sack them and sack them now.
And yes Conference we say the Bedroom Tax should be axed and axed now and if David Cameron won’t drop this hated tax, then we will repeal it.
We’ll protect disabled people in Scotland and across the UK.
Conference, we need a system that delivers the right help to the right people.
So assessments have to stay.
But let’s take Andy Burnham’s idea of whole person care and ask why not bring together health, social care – and the back to work system into one comprehensive service.
That’s what Labour did in Australia.
Let’s see if we can learn from that here.
I’m delighted to announce that Jenny Macklin, a fine Labour politician and the architect of the system down under, is going to help us figure out how.
Conference, nearly 10 years ago many of you helped win a very tough by election.
For nearly a decade I’ve served the poorest constituency in Britain.
I know in power we will have difficult decisions to make.
And I passionately believe we judge our success not by the money we spend but the difference we make.
There is no moral credibility without financial viability.
That’s why we’ll cap social security spending.
But, full employment, fair pay, a return to Beveridge, rights a reality for disabled people, fair pensions not for some but for all.
These are our principles for rebuilding social security for new times.
More than 50 years ago, my hero Clement Attlee, a man with the best hair in Labour history, made his final broadcast to a war weary nation hungry to win the peace.
We call you, he said, to another great adventure, the adventure of civilisation, where all may help to create and share in an increasing material prosperity, free from the fear of want.
That’s the Labour way, that’s the Ed Miliband way, and that’s the way we’ll win.
David Cameron’s flagship project is now in total chaos.
Parliament’s watchdog has blown apart yet another cover-up by Iain Duncan Smith who it seems has tried to hide further write-offs on his disaster-hit Universal Credit project. We’re now told there was no ministerial accountability and financial control was so weak that secretaries were signing huge purchase orders.
Iain Duncan Smith must now come to the Commons and explain why he tried to hide this from MPs last week. And he must now publish the damning report by his auditors PWC.
As usual with David Cameron’s out of touch Government they try and blame everyone but themselves. We must get to the truth ministers are trying to hide. It’s now clear ministers, not officials got this wrong.
Today’s NAO report reveals the extent to which Iain Duncan Smith has lost his grip on Universal Credit, in the face of years of warnings for DWP to get their multi-billion pound scheme back on track.
The damning report lays bare the chaos surrounding the government’s flagship welfare reform.
- Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work
- 2017 roll our date now in serious doubt amidst a series of delays
- IT systems scrapped at the cost of millions, and DWP unable to say if its new IT system will support national roll out
- Serious concerns over vulnerability to fraud
- A series of warnings ignored – including from the Major Project Authority
- DWP now unlikely to deliver financial savings promised
Liam Byrne MP, Labour’s Shadow Work and Pension Secretary, said:
“The truth is finally out. Universal Credit is a titanic-sized IT disaster which Iain Duncan Smith has tried to hide with cover up after cover up.
“Mr Duncan Smith swore blind this benefit shake-up was fine. Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds. Incredibly three years on, out of touch ministers still don’t know how things are supposed to work. It is exactly this lack of discipline that has left the social security bill spiraling up and up.
“The Conservatives welfare revolution has now finally collapsed. It is now mission critical that David Cameron and Iain Duncan Smith swallow their pride and agree to the cross party talks we proposed in the summer. We cannot risk another day.”
The report states that:
- “Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work [para 18]]
- “The Department has delayed rolling out Universal Credit nationally” and the 2017 roll out date is in serious doubt [para 2.14: The reset team in early 2013 considered different scenarios for rolling out Universal Credit, including completing migration later than October 2017. The current senior responsible owner is looking at different options for the timing of full roll-out”]
- Wasted time and money on failed management and IT mean failure to bring down the costs of social security [2.23 In its December 2012 business case, the Department estimated that Universal Credit would generate benefits to society worth £273 million by 2014-15. The delay in national roll-out will reduce the value of these benefits;
- The Department does not yet know to what extent its new IT systems will support national roll-out.
- “the Department has not achieved value for money” (para 23) and has already written off £34 million in IT assets due to poor management (para 2.20). “Remedial work to make good or replace the IT assets could further increase the Department’s IT budget, which had already increased by 61 per cent (£241 million) between its May 2011 and December 2012 plans” (para 2.21)
- There are serious concerns about fraud under the new scheme: “The Department’s current IT system lacks the ability to identify potentially fraudulent claims” (para 2.17).
- In practice the Department did not have any adequate measures of progress. Major Projects Authority and supplier-led reviews in mid-2012 identified a ‘fortress’ mentality within the programme team and a ‘good news’ reporting culture (paragraph 3.23), Inadequate financial control over supplier spending. (paragraphs 3.24 to 3.26), Ineffective departmental oversight. The the Department has never been able to measure its progress effectively against what it is trying to achieve. (paragraphs 3.11, 3.27 and 3.38).
- DWP repeatedly ignored warnings to get Universal Credit back on track The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit. [Yet] Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work. From mid-2012, it became increasingly clear that the Department was failing to address recommendations from assurance reviews. Although the nature and emphasis of its recommendations changed over time, the key areas of concern raised by the Major Projects Authority in February 2013 had appeared in previous reports. From mid-2012, the underlying concerns about how Universal Credit would work meant that the Department could not address recommendations from assurance reviews; it failed to fully implement two-thirds of the recommendations made by internal audit and the Major Projects Authority in 2012. (paragraphs 3.33 to 3.35).
The report is damning about the overall project management:
“The Department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300 million to develop. These problems represent a significant setback to Universal Credit and raise wider concerns about the Department’s ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress.”
Universal Credit has been massively delayed and is now unlikely to be fully up and running until late in the next parliament
In his July 2010 Green Paper ‘21st Century Welfare’, Iain Duncan Smith downplayed the scale of the major IT project which has now led to delays in the implementation of Universal Credit.
The Green Paper included claim that: “The IT changes that would be necessary to deliver a more integrated system would not constitute a major IT project, but two developments building on existing technologies.”[i]
On this basis, in his November 2010 White Paper ‘Universal Credit: welfare that works’, Iain Duncan Smith set out his timetable which stated that from October 2013 all new claims for out-of-work benefits would be for Universal Credit and no new JSA, ESA, Income Support and Housing Benefit claims would be accepted, while by April 2014 no new claims would be made for tax credits, with Universal Credit being fully in place by October 2017.[ii]
In November 2011, the Government claimed that by April 2014, over a million people would be claiming Universal Credit.[iii]
However, by June 2012, Iain Duncan Smith realised that this timetable was unachievable and limited introduction for new out of work benefit claims to only one Jobcentre per region.[iv]
Then in December 2012, this claim was watered down yet again. In a letter to local authority chief executives, the new programme director Hilary Reynolds (then in her job for four weeks – now replaced) wrote that even then the roll out for new out of work benefit claims in the selected Jobcentres would only apply to straightforward claims such as those who do not claim housing benefit.[v]
While ministers still claim that Universal Credit will fully be in place by the end of 2017, given the delays to its introduction, on the existing evidence this claim is no longer plausible.
Universal Credit is a fine idea that builds on Labour’s tax credits revolution that made work pay more than benefits for millions of people.
Today’s pathfinder is a pathetic joke, limited to a tiny number of people the scheme can handle. The truth is the scheme is late, over budget, the IT system appears to be falling apart and even DWP Ministers admit they haven’t got a clue what is going on.
The warning lights are on, now we need a rescue plan – fast.
Notes to editors
[i] Department for Work and Pensions, 21st Century Welfare, July 2010, p.34
[ii] “October 2013 to April 2014: All new claims for out-of-work support are treated as claims to Universal Credit. No new Jobseeker’s Allowance, Employment and Support Allowance, Income Support and Housing Benefit claims will be accepted. Customers transitioning from out-of-work benefits into work will move onto Universal Credit if they are eligible.”
“April 2014: No new claims are made to Tax Credits.”
“April 2014 to October 2017: During this time we would begin to work through existing cases.”
Department for Work and Pensions, Universal Credit: welfare that works, November 2010, p.37
[iii] Department for Work and Pensions, press release, Iain Duncan Smith sets out next steps for moving claimants onto Universal Credit, 1 November 2011
[iv] “Working with HMRC and local authorities, DWP has agreed that Universal Credit will be introduced in one district per region in October 2013 and then be rolled out to the remaining districts.”
Department for Work and Pensions, e-zine, Touchbase, June 2012
[v] “Initially [in the trials], UC will replace new claims from single jobseekers of working age in certain defined postcode areas. From October 2013 we plan to extend the service to include jobseekers with children, couples and owner-occupiers, gradually expanding the service to locations across Great Britain and making it available to the full range of eligible working age claimants.”
Letter from Hilary Reynolds, Universal Credit Programme Director, to Local Authority Chief Executives
[vi] Hansard, 13 March 2013
[vii] Hansard, 18 March 2013
Labour’s Shadow Work and Pensions Secretary, Liam Byrne, is today demanding a West Coast Mainline style enquiry into government incompetence which has placed at risk £130 million of public money at risk.
Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary said:
“Bungling DWP ministers have turned their back to work schemes into a West Coast mainline-style fiasco. Hundreds of thousands of sanctions have been put at risk by the sheer incompetence of Iain Duncan Smith and his department.
“This monumental blunder has put over £100million of public money at risk. We now need an urgent enquiry, in line with the Laidlaw review, into how Ministers got this so badly wrong.”
“The department for Work and Pensions is fast becoming the department where nothing works.”
Following a Court of Appeal judgement all JSA sanctions issued over the last two years for people who would not participate in almost all of the Government’s work schemes might now be illegal because IDS botched the regulations introducing them.
The Government has today been forced to bring forward emergency legislation to protect £130million of public money. Labour has secured vital safeguards from the Government to be inserted into the bill:
- Ministers must guarantee that appeal rights are protected for JSA claimants who have been wrongly sanctioned. This means that people who have good cause for not participating will still be able to claim their JSA back. Good cause is a wide ranging appeal right – and appeals can be made up to 13 months after sanctions
- Ministers must launch an independent review of the sanctions regime, with an urgent report to parliament. This is because of real concerns about the way in which sanctions have been used in some cases.
The Laidlaw Review into the West Coast mainline fiasco
The West Coast Mainline fiasco has cost the taxpayer £40m already and could cost over £100m as a result of significant technical flaws in the procurement process for the West Cost franchise in October 2012.
The Laidlaw Review was set up by the Secretary of State for Transport and tasked with identifying lessons to be learned for the Department and what measures the Department should implement to ensure the sound running of future competitions.
Attached, the terms of reference for the Laidlaw enquiry, as expressed to Sam Laidlaw in a letter from the Secretary of State for Transport
DWP’s £130 million incompetence
The DWP has been forced to bring forward emergency retrospective legislation to regain the general legal base for sanctions issued to around 220,000 individuals since 2011.
All JSA sanctions issued over the last two years for people who would not participate in almost all of the Government’s work schemes might now be illegal because IDS botched the regulations introducing them.
The Court of Appeal found that the Government had not provided enough detail in the regulations and not set out enough technical detail of the schemes in the letters sent out to jobseekers.
Since the Government introduced almost all of their schemes in one set of regulations in March 2011, it now means that all of the sanctions issued under those schemes might be illegal and that they would need to be repaid. This puts £130million of public money at stake. As a result, the Government has been forced to bring forward emergency legislation.
Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary, responding to changes announced to the Bedroom Tax, said:
“David Cameron’s Bedroom Tax has descended into total chaos. Today’s announcement doesn’t bring forward one extra penny for victims of this wretched tax.
“Ministers have said nothing today to guarantee disabled children will be protected from his hated Bedroom Tax. The truth is there is only 6 weeks help available for everybody hit and David Cameron mustn’t use smoke and mirrors about how this hated tax will hurt disabled children. They have said nothing to almost half a million households that are home to a disabled person who are set to lose over £700 at exactly the same time as millionaires receive a massive tax cut.
“Today this Government will oppose Labour’s plans today for a Mansion Tax – but they’re pressing ahead with a Bedroom Tax which will hit families with literally nowhere else to go.
“Labour will not rest until Ministers think again, admit they have got this wrong and drop this hated tax for good.”
Jim Murphy MP, Labour’s Shadow Defence Secretary, said:
“For months head-in-the-sand defence ministers have denied there was a problem, but now they’ve backtracked. Ministers’ incompetence has been shown up in this humiliating move.
“Government embarrassment is matched only by the fact this climb-down does not go far enough to include reservists, whose families could also be hit.
”The Government’s defence plans now rely entirely on increasing reservist numbers, yet we are not protecting those who protect our nation.
“Not for the first time, Ministers should listen to Labour and the service community.”
My line in the Sunday Times story on yet more chaos in the bedroom tax – now even some families with small dining rooms will be hit.
“The Bedroom Tax is now in total chaos. This week the Prime Minister showed he hadn’t got the first idea how the scheme works and now we learn in some parts of the country even dining rooms will be hit. The whole thing is a complete mess. Ministers must get a grip of this shambles fast, before it’s too late.”
Liam Byrne MP, Labour’s Shadow Work and Pensions Secretary, responding to today’s PAC report criticising the Government’s handling of the Work Capability Assessment, said:
“This damning report exposes the chaos and confusion at the heart of the Tory-led Government.
“Help for disabled people needed careful change yet Iain Duncan Smith has behaved like a bull in a china shop and now we see the price for the taxpayers and thousands of vulnerable people.
“David Cameron and Iain Duncan Smith have botched the Work Programme, lost a grip on Universal Credit and it’s now clear they’ve lost control of yet another reform costing multi-millions and causing millions huge distress.
“We warned the Government against a ‘big bang’ roll-out of this sensitive test in 2011. We said ‘get it right first’ but instead, ministers went hell for leather forcing thousands to jump through hoops which their own advisors said were wrong and costs the country £110 million a year.
“The Government has got to listen to Labour’s call for fast and fundamental change of the test before any more money is wasted and any more people are hurt.”
You can always tell when this government is in trouble because they look for someone else to blame, someone else to attack.
So it is no surprise that after being forced to admit that his economic plans have been a disaster, George Osborne lashed out.
No growth, more debt, higher unemployment, and guess who is paying the bill? It’s certainly not the millionaires he just gave £100,000 tax cut to. It’s Britain’s strivers that are once again taking the hit.
Last month they admitted their Work Programme is worse than doing nothing, leaving millions locked out of work and pushing the benefit bill through the roof – an eye-watering £13.6bn higher than expected.
To pay down the price of that failure they are raiding the budget of their own Universal Credit programme which was supposed to make sure you’re always better off in work. Instead the scheme will lock in George Osborne’s ‘striver’s tax’.
Universal Credit is now set to be a car crash for 2.8 million families who will be worse off than under the current system. That’s nearly 50% more than when plans were first published.
The very people this government has let down are being asked to pick up the tab for Ministers’ failure. 300,000 families on middle and modest incomes will lose £3,600 a year – that’s £300 a month.
We were promised a welfare revolution but Universal Credit is descending into universal chaos. Instead of fixing welfare reform, this government is now just flogging working families.
Two and a half years in the government doesn’t seem to have a clue about the big questions its got to get right. If ministers don’t wake up and get a grip soon then universal credit is going to continue its rapid descent into universal chaos, spelling disaster for millions of Britain’s families.
The Select Committee’s criticisms include:
Risk of failure to identify vulnerable people
“We are concerned that the Government’s proposed exceptions process will be too slow in identifying people who may struggle to adapt to monthly payments and who may fall into debt or suffer further hardship.”
“We also recommend that the Government moves quickly to publish a clear definition of “vulnerable” groups within Universal Credit for whom it will not be appropriate to include housing costs in their benefit payment. It also needs to establish a robust process for proactively identifying claimants who are struggling to manage their housing costs so that they can be properly assisted before they fall into arrears and face eviction.”
Risk of failure to provide more generous support for disabled adults and disabled children
“The Government has clearly stated its intention that Universal Credit will provide more generous support for disabled adults and disabled children than it does for people in similar circumstances who are not disabled. We have not yet received sufficient evidence that the current plan for additional disability elements ensures this is the case.”
“We recommend that the Government addresses concerns about the system of disability additions within and outside Universal Credit, particularly where these affect disabled children and severely disabled people, to meet its commitment to provide generous support to those particularly vulnerable groups of claimants and to ensure that there is no diminution in their overall benefit package which includes their entitlement under Universal Credit.”
Increasing the complexity of the benefits system
“We believe that the Government’s decision to localise council tax support under a proliferation of local schemes, rather than including it within Universal Credit, will work against its objective of simplification of the benefits system. It will introduce local variation, add additional complexity to earnings incentives and has the potential seriously to undermine the objectives of Universal Credit in terms of enabling claimants to see clearly the financial benefits of taking up a job or working more hours.
Risk that the Government may miss its ambitious implementation timetable
“The Government has set a very ambitious implementation timetable for Universal Credit. Ministers emphasised that, because implementation will be phased over four years, there will be plenty of time to get it right. While it is true that system enhancements can be developed and refined over time, we believe that the basic structure and the essential elements of service delivery and support must be shown to be in place before the major roll-out of Universal Credit begins in October 2013.”
“We consider that the implementation timetable is ambitious and that there is significant further work to be carried out to ensure that the needs of the most vulnerable claimants can be met. The Government should reflect on the possible consequences of the scale of the proposed changes for some of the most vulnerable people in society and, if those consequences cannot be adequately addressed, should consider modifying its implementation timescale accordingly.”
Lack of clarity over those who cannot claim Universal Credit online
“DWP has been unable to present us with any clear plans for how the Universal Credit service will be delivered to those people who cannot make an online claim. Nor is it clear what DWP’s target of 50% online claims in 2013 actually means; if there is to be no paper form then all claims will have to be online and the target is presumably an indicator of how many claimants will need telephone or face-to-face support.”