Written evidence from PCS Union [UCW0055]

1. PCS represents around 180,000 staff in the Civil Service and related agencies, bodies and contractors. Within this, we represent around 50,000 staff in the Department for Work and Pensions (DWP).

2. Thousands of our members are involved in delivery of Universal Credit (UC) in the national Jobcentre network and in the 24 UC Service Centres handling telephone calls from claimants. Our members are currently classed as key workers as part of the Government’s response to the coronavirus outbreak.

3. PCS has been calling for Universal Credit (UC) to be scrapped in its entirety due to the damage being caused by the elements that make up the policy. This includes the benefit cap, two-child limit, monthly lump-sum payments and the low level of payments across UC.

4. Underpinning these elements of UC is the significant reduction in the amounts of the various benefits that make up UC. Compared to the old legacy benefit system, low-income families in areas with high unemployment will be worst affected by these cuts and disabled benefit claimants have been hit especially hard. The Disability Benefits Consortium stated that a disabled claimant on UC will be £1,200 worse off per year and a family with at least one disabled member will be £4,300 worse off[1].

5. Notwithstanding the huge problems these elements are causing for claimants, we feel that the in-built five-week wait is one of the most harmful. This five-week wait has pushed and is pushing already destitute and vulnerable claimants into further financial hardship.

6. As the rollout of UC has progressed, an increasing number of claimants have been pushed into poverty. According to the Trussell Trust’s State of Hunger Report, the number of food parcels delivered by their network over the past years has increased by 73%. The same report revealed that throughout 2018 and 2019, 61% of foodbank users cited awaiting new claims and first payments as the reason for having to use a foodbank[2].

7. The five-week wait is one of the most pressing issues for UC claimants and this is a particularly pressing issue in the wake of the Coronavirus crisis, with over a million people claiming UC in the past month.

8. In the very short-term, we are asking that the Government listens to the calls being made by PCS, other trade unions, charities and other support organisations for advanced payments to be turned into non-repayable grants.

9. Beyond this, the five-week wait and the other detrimental elements of UC should be scrapped completely and the Government should then work collaboratively with claimants, those supporting claimants and those delivering UC to develop a new system that is less punitive and fairer.

Impact of five-week wait

10. The impact of the five-week wait policy is two-fold: there is a direct impact on all claimants who have to wait a minimum of five weeks for the first payment. The second impact is the repayment of Advance Payments (AP) that claimants have to make, should they choose to take one. This means that claimants are immediately pushed into debt right at the beginning of their claim.

11. This is completely counter to the principles that underpin the welfare state. If a person finds themselves out of work or they need to care for a disabled family member or they become ill themselves, pushing them into debt right at the outset of their claim is completely unjust.

12. Research from the charity StepChange shows that 47% of their clients have fallen behind on rent due to the delay in payments and AP deductions. And 65% of their clients also cut back on meals and have relied on family and friends for financial assistance[3].

13. An answer to a parliamentary question from Chris Stephens MP showed that in August 2019 alone, over £50 million was deducted from UC claimants in AP repayments[4]. This is on top of deductions totalling £44 million made for arrears and overpayments. These families will have been some of the poorest in the country and forcing them to repay their advance will be doing very little to help them improve their financially precarious position.

14. Although the maximum amount a claimant can have deducted from their UC payments to repay APs has been reduced to 25%, and the length of the repayment schedule is to increase to 16 months next year (currently 12 months), claimants will still be having at least of a quarter of their monthly UC payment reduced.

15. For a large proportion of claimants, the amount being deducted will be much more, StepChange reports that 40% of their clients have two or more deductions and 15% have three or more. These deductions are putting immense pressure on household incomes, with 93% experiencing financial hardship as a result[5].

16. The initial five-week wait is pushing people into financial difficulty and the deductions for APs is making it even harder for claimants to become financially stable.

17. There is a clear case for the five-week wait to be scrapped and the Government should be doing much more to prevent new claimants from being immediately pushed into poverty.

Delivery of UC

18. PCS represents around 50,000 staff members that work in the Department for Work and Pensions (DWP). Overall, PCS represents 180,000 staff in the civil service and related areas.

19. PCS members are on the frontline of delivering UC and they work incredibly hard in what are very difficult and challenging circumstances. They deal with claimants daily face to face, by phone and online. This gives us an important voice when it comes to DWP policy.

20. On the issue of the five-week wait and advanced payments, the DWP Permanent Secretary, Peter Schofield, stated during a DWP Select Committee in late March that “to make a change [to the system] requires reprogramming, resetting or manual processes which we simply, at those levels of volumes, wouldn’t be able to manage”[6].

21. Despite this answer being given in the context of the Coronavirus outbreak and the calls being made for the temporary switching of advance payments into non-repayable loans, we still think this is relevant. It is our understanding that processes are already in place that would allow for relatively quick IT fixes to be made to enable the temporary suspension of some or all UC deductions.

22. We feel that there is clear scope for a fix to be made that will allow for, at first, the temporary suspension of deductions for AP deductions. While this temporary suspension is in place, we would call on the Department to then provide a permanent fix to the problem of the five-week wait. It is also our understanding that removing the five-week wait from the UC system would, again, be a relatively simple process.

23. We want to work with the Government on this hugely important issue and we hope they will be willing to utilise the experience of DWP staff in delivering the changes necessary.

Coronavirus impact

24. The Coronavirus outbreak has illustrated how problematic the five-week wait is. Millions of people have been thrown out of work and will now be in the process of claiming UC. After the economic upheaval of suddenly becoming unemployed, we don’t think it’s right to expect these people to wait at least five weeks for their first payment.

25. Between mid-March and early April, nearly one million new claims for UC were made: this is a twenty-fold increase. Mainly due to Coronavirus, 40% of staff are also not working[7] and despite the best efforts of staff, this is putting huge pressure on a system that was already struggling to cope.

26. Before the Coronavirus outbreak, an average 85% of new claims were paid within the five weeks, according to DWP Permanent Secretary, Peter Schofield[8]. It’s clear that the unprecedented demand for new claims, combined with the reduced workforce, will mean that the department is unlikely to continue processing new claims at this rate.

27. Therefore, on top of the hundreds of thousands of claimants waiting the first five weeks and having to deal with the financial hardship associated with that, there is likely to be hundreds of thousands more who will have to wait longer than five weeks. This issue of delayed payments will affect all new claimants and the repayment of advances for those who choose them will be significant.

28. The Coronavirus has highlighted the problem faced by new UC claimants and we hope the Government will listen to the demands being made for the APs to be made into grants with a view to removing the five-week wait altogether.

We welcome the opportunity to submit evidence to the Work and Pensions Select Committee, we acknowledge the significant work which has been carried out by your members throughout this difficult period and we would like to further support out submission by giving oral evidence to members of the committee in the near future.

April 2020