The economics of Universal Credit

About The Salvation Army

Across the UK and the Republic of Ireland our 700 churches and community centres offer a place to worship God, to experience belonging and receive practical support.


We support people experiencing homelessness by offering more than a place to stay but also somewhere to regain a sense of purpose and skills for independence. This connects to follow-up support in the community. Through our Employment Plus service located in over 80 centres across Britain we provide help for people to re-enter work overcoming barriers of long-term unemployment. These services are mainly delivered through our community centres so people can work with our staff in a friendly local environment.


Building on a long history of working in this area, The Salvation Army has made tackling modern slavery and human trafficking a global priority. In the UK, as part of this networked response, we manage the Government contract to deliver specialist support for all adult victims of modern slavery in England and Wales. Through this, and in partnership with other agencies and our own networks of volunteers and centres, we have supported more than 10,000 people in 8 years to begin the long journey of recovery from horrific exploitation to building sustainable, independent futures.


Executive summary


The Salvation Army welcomes this timely call for evidence by the House of Lords on the economics of Universal Credit. We expect the next phase of Universal Credit roll out, Managed Migration, to commence later this year, in the autumn.


Now, more so than ever, we need to make sure Universal Credit is a social security system that works for everyone, particularly vulnerable individuals who have complex lives and are furthest from the labour market. Managed Migration is going to affect a significant proportion of people who will need intensive support to move on to a new system and to maintain their claims in the short, medium and long term.

The Salvation Army is concerned that plans for the introduction of Managed Migration are not yet fit for purpose. If things remained unchanged, The Salvation Army is deeply concerned that the expansion will lead to significant and unnecessary hardship for those who need help the most.


One in five claims to Universal Credit are dropped[1], with many people who are pushed out by the system seeking immediate help from The Salvation Army to prevent destitution. Issues with Universal Credit, including the five week wait for a first payment as well as erroneous and delayed payments more generally, are already the most commonly cited reasons as to why people have to use our foodbanks.[2] If immediate action is not taken, we believe that this trend is only likely to increase with ever growing numbers of people left destitute and without support.


In 2019, The Salvation Army conducted research to unpick the reasons why so many people are struggling to make a successful claim for Universal Credit. The research collected data from 160 people across England and Wales on their experiences of claiming out-of-work benefits. The research uncovered that mental ill health is a significant barrier for accessing Universal Credit, and that urgent action needs to be taken to fix this before Managed Migration commences.


In February 2020, we published the findings of the report, after sharing the results with government stakeholders, including the Department for Work and Pensions (DWP). Our findings demonstrate that Universal Credit has not met its original objectives: to simplify the process, to help people into work, and to be flexible to meet people’s needs. The research also shows that the original assumptions underlying the new system are not fit for purpose.


In order for Universal Credit to work for everyone and to deliver on its original aims and ambitions, The Salvation Army encourages the Committee to recommend:





We look forward to any opportunity to speak to the Committee about our research and recommendations.


Were the original objectives and assumptions the right ones for ensuring adequate and fair social security for all? If not, how should they have been different?


The Salvation Army believes that while the original objectives of Universal Credit were commendable, many of the significant problems that were first highlighted even before the system first became operational in 2012 remain unresolved.


We are particularly concerned by the government’s continuous lack of consideration of how vulnerable people engage with Universal Credit. Despite pledges that Universal Credit would be of benefit to all claimants, the needs and experiences of more vulnerable claimants have been systematically ignored throughout Universal Credit’s roll out. In the 2010 Universal Credit White Paper, Annex 1 notes that the most cited concern of the 1,600 respondents to the public consultation, the Green Paper, was “what the reforms might mean for people in vulnerable circumstances and those unable to work” and that “many stressed the importance of putting appropriate safeguards in place for these people.”[3]


Yet, there are no references to vulnerability or safeguards in the White Paper to address these important concerns. This omission is significant. The White Paper does not take into account or respond to the complexity of people’s lives. The impact of this failure includes well known policy failures, including the five week wait, self-employment minimum income floors, and two child limits.


The Salvation Army recommends to the Committee that it open up its inquiry to consider not only which assumptions were right or wrong, but also, what was missing from the original policy. Too often, when it comes to issues around social policy, it is what is forgotten by decision makers that causes the most pain for people, whose needs are not considered, and who are impacted most negatively by the changes.


Our research demonstrates that mental ill health is a significant barrier to access that was missed out during design. Mental health is not considered within Universal Credit, and its impact continues to be missed by both decision makers, as well as those delivering the service.


We need a national rethink from the Department for Work and Pensions on how it supports people’s mental health, including helping those experiencing mental ill health to move on to Universal Credit. Our research identified that only 14.5% of all 160 respondents had no problems moving on to Universal Credit, meaning nearly all individuals identified difficulty in making their Universal Credit claim. Mental ill health was overwhelmingly the biggest barrier to claiming Universal Credit. Almost half (42%) of all the individuals surveyed said that mental ill health was a barrier to successfully claiming Universal Credit. Many people had more than one issue in making their claim. A third of all respondents (32%) identified multiple barriers to claiming Universal Credit.[4]


Importantly, for those who said that mental ill health was a barrier to claiming, their experience of moving onto the new system is especially problematic. A staggering 72% of individuals with a mental health barrier had a second, third, or even fourth compounding barrier to accessing the system.


The stresses and impact of Universal Credit on people’s mental health apply to everyone. The stresses of both being out of work and moving on to Universal Credit are holding people back and adding significant strains on many people’s mental health. Just 17% of all individuals surveyed agreed with the statement that claiming benefits was simple. We need to make the system easy to access, so people can get on and start successfully to look for good work. 74% of all 160 respondents said being out of work caused them stress, with just as many agreeing that being out of work was causing them increased anxiety.


We urge the Committee to consider our findings on the impact that Universal Credit is having on mental health, including how lack of consideration in its design is impacting the most vulnerable.


How well has Universal Credit met its original objectives?


Our research demonstrates that Universal Credit has not met its original objectives, particularly regarding expectations on financial and digital independence, identification of people who need greater help, or personalised support.[5]


Financial and digital independence

Universal Credit demands a greater level of financial and digital independence from claimants than the legacy benefits system. For example, payments are monthly, meaning that people are more responsible for budgeting money over longer periods of time. Engagement with Universal Credit is also digital by default, meaning people need to be able to independently engage with the online system. In recognition of these new expectations and ways of working, the original 2010 Universal Credit White Paper makes

clear that “whatever the period of payment, there will be appropriate budgeting support to ensure

recipients are supported effectively.”[6] It also suggests that Universal Credit will “maximise use of online channels to provide straightforward and accessible information about claims and better job search support whilst providing focused help for those unable to use online channels that in order for people to manage online claims”.[7]


Taken at face value, the White Paper strikes an important balance between the new expectations placed on claimants under Universal Credit and the obligations of the system to provide support for those who might struggle to adapt to these new expectations. By contrast, numerous research projects, including those conducted by The Salvation Army, have shown that in practice Universal Credit has consistently and systematically failed to offer people, particularly the most vulnerable, the necessary and appropriate support to successfully engage with the new system.[8]


We know that two of the main barriers preventing vulnerable people from successfully engaging Universal Credit are digital and financial exclusion. Universal Credit is not accessible for those with limited digital skills. More importantly, too many individuals do not have continued access to computers to sign up and maintain their claims. 52% of people with a long-term health condition need help to access the online application.[9]


Our report reflects these national findings. 52% of all 160 respondents said that they were not confident using computers, and 49% said that they were not confident budgeting. Moreover, we are particularly concerned that people who self-identified as needing help, were not receiving basic support from Jobcentres. For those who said they struggled to use a computer, only 40% were offered help from their Work Coach to access support or training to navigate digital systems, leaving 60% of individuals who need support without. For those with issues with budgeting, the picture is even starker. Of the individuals who said they struggled to independently manage their budget, less than 30% got any support from their Work Coach.


The 2010 Universal Credit White Paper demonstrates that government knew it had an obligation to invest in digital and financial skills support.[10] However, asides from limited investment in programmes like Help to Claim, this has not yet happened. In order for government to meet its original objectives, there needs to be a regional rethink from Jobcentres on how to consistently deliver basic support, including digital and budgeting support for new claimants. Lower caseloads as well as better use of Claimant Commitments would help Jobcentres implement these needed changes.


Identification for help: caseload and capacity


Unlike legacy benefits, Universal Credit is designed around personalised support. A core component of this personalised support means staff delivering frontline work are given significantly more responsibility and agency. No longer simply in charge of administering benefits, Work Coaches are responsible for delivering personalised employability and employment support. Unlike legacy benefits, a core component of Universal Credit is that it is supposed to be dynamic and deliver continuous interventions to help people move into work. Work Coaches are now responsible for helping people tackle the range of barriers they face in moving into work. Every person’s journey and needs are unique, but these barriers can include a collective range of issues including substance misuse, housing, childcare, offending, lack of formal and informal skills, mental and physical health, domestic violence and debt. A core component in the design of Universal Credit assumes that Work Coaches are the front line of

delivering this “valuable face-to-face back-to-work support”[11].


Universal Credit assumes Work Coaches are now the front line, responsible for identifying and helping people with any barriers they may face. However, this objective is not being met. With a full 30% of claimants finding the process “fairly” or “very” difficult and needing specialist intervention nationally,[12] government needs to make sure that the right systems are in place. Unfortunately, the design of Universal Credit makes it impossible to deliver this core objective. Work Coaches are not able to identify those who need help, and our research demonstrates that this is due to impossibly large caseloads.


Work Coaches have a very difficult job, and we know that they are capable people who come to work every day to meet the large demands expected from them under Universal Credit. However, in our experience, it is impossible to deliver this key ask of identifying and delivering tailored support when staff don’t have the time or resources to work with customers. We need a rethink at the local level on how Work Coaches deliver support, including investment in lower caseloads to support staff to properly identify and support vulnerable claimants. Caseloads of 130[13] are simply too large to provide the necessary individualised and tailored employment support that many people require. The government must reassess the size of Work Coach caseloads to allow them the time and space needed to work with people effectively. The Salvation Army has seen success when staff have caseloads that don’t reach any higher than 50 across our delivery of various employment support programmes. This allows the time for staff to know their customers, while delivering value for money.


National research continues to demonstrate the impact of the high caseloads Work Coaches face.[14][15] In our research, follow-up group discussions with respondents demonstrated that Work Coaches lack of capacity to deliver individualised support was clearly identified as having a detrimental effect on claimant’s ability to successfully navigate Universal Credit and move into work. Respondents spoke about rushed appointments, with a focus entirely on signing their Claimant Commitment, and not enough time spent on individual need. The key objective of Universal Credit to deliver tailored support is not being met, and is having significant impact on customers trying to navigate the complex system.


Personalised Support: lack of tailored Claimant Commitments


Lack of identification and tailoring support is making Universal Credit more difficult to manage. This lack of identification and inability to deliver flexible support is not new[16]. Just under 2 million households are expected to go through the Managed Migration process, of which 50%-60% will be in receipt of Employment and Support Allowance (ESA). Most of these individuals will require flexibility and tailored support to both sign up and manage their claims on an ongoing basis.[17] The Salvation Army is concerned that unless the Department for Work and Pensions can fully outline how it will identify and support these individuals, that lack of tailored flexibility will put many at significant risk of falling into crises during migration.


Under Universal Credit, Claimant Commitments are supposed to be tailored to best support people to manage their claim and move into work. Claimant Commitments are meant to introduce and implement the flexibility outlined in various pieces of Universal Credit guidance, to ensure that personal circumstances are taken into account so people are able to manage their claims. However, nationally, we know that more than half of Claimant Commitments have not been appropriately tailored in a way that will best help the person. Nationally, only 54% of claimants said their Claimant Commitment took into account their personal circumstances.[18] Without personalised support that recognises need, The Department for Work and Pensions will be unable to help people succeed on Universal Credit.



We need a rethink on the individual level on how claimants engage with Universal Credit, including a rethink of how Claimant Commitments are used to ensure that individuals are accessing the right support based on tailored needs. Recent findings from the Social Security Advisory Committee indicate that the type and volume of employability activities within a person’s Claimant Commitment should be tailored depending on what seems appropriate, achievable and reasonable given the claimant’s circumstances.[19]


Government need to rethink how Claimant Commitments are utilised to track not only how people are engaging with Universal Credit and employment search requirements, but also how Work Coaches are identifying need and signposting to relevant support.


This rethink does not mean reinventing the wheel. Our research[20] highlights is already strong work being done in the employment sector that both work coaches and Jobcentres can utilise, and we encourage the committee to speak to us further about our experience as a provider of these vital services.




While we understand that for many people who are not vulnerable or are close to the labour market, Universal Credit claims can be straightforward,[21] we nevertheless believe that social security only works when it works for everyone.


As a society, we only succeed when everyone has the opportunity to succeed, and we are concerned that there are still key, fixable issues that are holding people back.


Our research finds that in order to make Universal Credit work, there needs to be:






We look forward to any opportunity to speak to the committee about our recent research and the recommendations for the committee’s work.


For further information about any of the information contained within this response, please contact:


27 February 2020


[1] What needs to change in Universal Credit, All-Party Parliamentary Group on Universal Credit, July 2019

[2] ‘Millions at risk of Universal Credit Lock out warns The Salvation Army’, The Salvation Army, February

[3] Universal Credit: welfare that works for everyone, Department for Work and Pensions, November 2010

[4] Understanding Benefits and Mental Health, The Salvation Army, February 2020.

[5] Universal Credit: welfare that works for everyone, Department for Work and Pensions, November 2010

[6] Ibid

[7] Ibid

[8] Universal Credit: from disaster to recovery? Institute for Government

[9] Universal Credit Full Service Survey, Department for Work and Pensions, June 2018.

[10] Evaluation of the Universal Support Delivered Locally Trials, Department for Work and Pensions, July 2016

[11] Universal Credit: welfare that works for everyone, Department for Work and Pensions, November 2010

[12] Universal Credit Full Service Survey, Department for Work and Pensions, June 2018.


[14] The Future of Jobcentre Plus, Work and Pensions Select Committee, November 2016.

[15] Supporting Disabled People to Work, National Audit Office, March 2019.

[16] SSAC Occasional Paper 21, Social Security Advisory Committee, September 2019.

[17] Welfare Trends Report, Office for Budget Responsibility, January 2018.

[18] Universal Credit Full Service Survey, Department for Work and Pensions, June 2018.

[19] The Effectiveness of the Claimant Commitment in Universal Credit, Social Security Advisory Committee, September 2019.

[20] Understanding Benefits and Mental Health, The Salvation Army, February 2020.

[21] Helping Hand? Improving Universal Credit, Bright Blue, 2019.