Written evidence from Policy at Jubilee+ [UCW0048]
About Jubilee+
Jubilee+ is a national charity that equips and empowers local churches to support those who are trapped in poverty or are vulnerable in their communities. We work with churches across the UK of all denominations, but especially the so-called ‘new churches’. Many of the churches we work with are highly or moderately engaged in supporting people who are vulnerable or trapped in poverty, but we also help churches to get started with social action and social justice too. Jubilee+ was founded in 2011, registered charity number 1159799. In addition to equipping churches through training, networking around key issues, and conferences, we also conduct research into the impact of church-based activities and have written three books on poverty in the UK: The Myth of the Undeserving Poor (2014, Grosvenor House); A Church for the Poor (2017, published by David C Cook); and A Call to Act (2020, to be published by David C Cook later this year). In addition to working with churches, we also work with a number of Christian and secular charities, such as JRF, Trussell Trust, TLG, CAP, CMA, Hope into Action, Frameworks Institute, etc.
We are deeply concerned – as are many of the churches we represent – about the impact of the five week wait and its implications in regards to food poverty, medium/long-term debt, and mental health, in particular.
We met with Amber Rudd a number of times when she was Work & Pensions Secretary, and at our most recent meeting on 14 June 2019 we believe there was a willingness to acknowledge the harmful impact of the five week wait and, indeed, to reduce it.
1. To what extent have the mitigations the Government has introduced so far (e.g. Advance payments) helped to reduce the negative impact of the five week wait for UC claimants?
- What problems do claimants still experience during the five week wait?
The majority of the churches we work with and represent have found that Advance payments have proven helpful in some cases but problematic in many more. For example, King’s Church in Hastings has seen a steady increase in ‘low income’ becoming the primary reason for referrals to its foodbank, where ‘low income’ is often due to Advance repayments, which are deducted from UC payments over a 12-month period.
Wolverhampton Foodbank (known as The Well) has seen a 67% increase in referrals specifically from the organisation commissioned to run council housing stock – many of the council tenants are adversely affected by the five week wait.
Lowestoft Community Church reports a common theme among foodbanks across the country of people using overdrafts, credit cards and even loan companies to tide them over. Likewise, Barnabas Community Projects, which is run by Barnabas Church in Shrewsbury, reports that the five week wait has a detrimental impact upon claimant’s long-term finances because of the debt that is incurred during the five weeks. In fact, when Barnabas put in place a strategic plan to support those moving onto Universal Credit during the five weeks, this led to a surge in referrals from the DWP.
A project working with women caught up in the sex industry in Bristol has in place an emergency fund to bridge the five week gap for women who are able to exit the sex industry and apply for UC.
Very common themes about Advances from churches engaged in a variety of social action, from running foodbanks to debt centres to anti-slavery projects, across the UK include:
- Significant numbers of people are reluctant to take Advances because they don’t want to be in debt, or because they realise it will make life harder for the following 12 months as they live on less for longer, so they struggle to get by for the five weeks, often realising part-way through that they will not be able to manage for the full five weeks – it is usually in the middle or second half of the five weeks that people are referred to church-based projects that can support them;
- Some people end up being referred to foodbanks and other crisis support projects repeatedly during the 12 months following the five week wait, because they simply cannot make ends meet while repaying their Advance.
A further problem that has been identified by the DWP themselves is the loophole in the Advance system that enables vulnerable people to be exploited – this is to do with the ability to amend your own details online after initiating your claim, meaning you can falsify information to be awarded a larger Advance. Those exploiting people are informing them of the loophole that enables them to be given an Advance of £1,500. They take a cut of this, having told the claimant it can never be traced. However, once it is discovered, the claimant has to repay the full Advance, even though they have given a percentage away. A DWP source informed us that as of December 2019 there were 95,000 outstanding cases of benefit fraud, when staffing levels are such that they can only manage 10,000. (NB it is unknown how many of the 95,000 cases are due to the type of exploitation mentioned above, nevertheless the loophole is a significant problem.)
2. What is the best way of offsetting the impact of the five week wait?
The five week wait was intentionally designed into the UC system in order that it should mimic work – the idea being that it takes one week to process a claim, but the additional time is to help claimants adjust to being ‘paid’ monthly.
However, in seaside settings such as Lowestoft and Hastings, significant proportions of the workforce are employed in seasonal employment, casual labour and shift-work that does not pay monthly.
Also, the design of UC to mimic work in this way is predicated on an underlying assumption that people claiming UC have never experienced being paid monthly and need to ‘learn’ what this is like. This is a false premise for many people claiming UC.
Jubilee+ believes that reducing the five week wait entirely would be the best course of action and the most beneficial, and that its benefits outweigh the cost implications to doing so.
However, if this is not possible, there are two clear options available to the Government that could offset the impact of the five week wait:
- A means-tested grant scheme, whereby claimants are assessed and, based on need, are allocated a grant that does not have to be repaid;
- A means-tested Advance repayment scheme, whereby a claimant’s ability to repay is assessed, and they then repay at an affordable rate.
Future concerns
Jubilee+ and the churches we represent are deeply concerned about the huge number of new UC claimants during the coronavirus pandemic who will experience the five week wait (at least). Church-based projects supporting those in poverty are already reporting an increase in first-time recipients of food parcels and other crisis interventions. Many such projects are already stretched beyond capacity. The medium-term impact of coronavirus on UC and subsequently on what are mostly volunteer-led services could cause a crisis in church-based support in the coming months. Whereas we have previously been able to cover the impact of the five week wait and support those who fall into difficulty because of it, our capacity to do this if numbers increase dramatically could be limited. We may not be able to plough in the level of financial and human resources required to pick up the pieces of this flaw in the system if the need escalates.