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A Northern Alliance is forming against the implementation of the Universal Credit, underpinned by fears that the new benefit system will negatively impact those most in need.
Liverpool City Region Metro Mayor, Steve Rotherham, has condemned plans by the Government to implement its Universal Credit benefit changes this winter. The changes, piloted in April of this year, would implement a single means-tested payment to replace six existing benefits and tax credits, such as housing benefit, child tax credit and income support, for those of working age.
Under the new system, it will take six weeks for an applicant to receive their first payment. Families are already suffering with these new delays and local authority response is hampered by continued austerity. This comes against a backdrop of chaos, acute hardship and increased homelessness in areas where the Universal Credit benefit system has been piloted.
The Metro Mayor commented, “It is simply wrong for the Government to be going ahead with the roll out of Universal Credit when the pilots have resulted in hardship and misery.
“It is not even excusable to describe these as teething problems as there are profound design faults and injustices at the very core of the new system.”
A recent survey found that 89% of Local Authorities had voiced concern that the roll out of Universal Credit might exacerbate homelessness further, mainly due to the movement away from the direct payment of rent and the new online application process.
In a report released by the Institute of Fiscal Studies last year, the proposed changes will see 3.2 million households subjected to lower benefit entitlements. Furthermore, overall benefit spending under Universal Credit will be reduced by £2.7 billion a year.
The same report notes that 2.2 million households will see an increase in benefit entitlements. However, the average income gain for these households is still less than the reduced income that many households will be subjected to under the new system.
Metro Mayor Rotherham was joined by other Northern leaders in his condemnation of Universal Credit. Last week, the Greater Manchester’s Reform Board (GMRB) agreed that the halting of the Universal Credit roll out was fundamental to reducing rough sleepers and homelessness across Manchester.
Mayor Andy Burnham made a plea to the Government, stating, “This is not a political point. I am speaking for the entire board – the entire public sector in Greater Manchester – when I make this plea to the Prime Minister and Government. You must suspend the roll out of the Universal Credit benefit. It was a unanimous view in the meeting that Universal Credit will make the homeless and rough sleeping problem here dramatically worse."
This comes as the Greater Manchester Combined Authority announces new funding in the form of a £1.8 million Social Impact Bond – a Government backed bond funded by the private sector. This funding will be used to implement actions suggested by the GMRB. These include ensuring better health and social care for those living on the street, such as developing outreach programmes, registering those who wish to be with a GP, and ensuring no patient is discharged from hospital onto the street, as well as opening all 41 of Greater Manchester’s fire station to support homeless people.
The beginnings of a northern alliance against Universal Credit seem to be emerging. Metro Mayor Rotherham has pledged to raise the matter directly with Government Ministers. However, while actions such as those taking place in Greater Manchester will seek combat the homeless epidemic, the additional cuts to benefits that the Universal Credit changes will implement, combined with continued austerity, might make the tackling of homelessness and poverty an even tougher battle.