Report shows significant challenges facing the Universal Credit system

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It’s disappointing and very worrying that a published report from the Work and Pensions Committee says: “The employment support service for in-work claimants of Universal Credit (UC) holds the potential to be the most significant welfare reform since 1948, but realising this potential means a steep on-the-job learning curve, as the policy appears to be untried anywhere in the world.”

The Work and Pensions Committee recommendations in the report are:

Given there is no comprehensive evidence anywhere on how to run an effective in-work service, the DWP will be learning as it develops this innovation. The Committee says:

  • for the reform to work, it must help confront the structural or personal barriers in-work claimants face to taking on more work, such as a lack of access to childcare and limited opportunities to take on extra hours or new jobs
  • the question of applying proposed sanctions is complex: employed people self-evidently do not lack the motivation to work.  The use of financial sanctions for in-work claimants must be applied very differently to those for out-of-work claimants
  • a successful in-work service will also require partnership between JCP and employers to a degree not seen before.

Frank Field MP, Chair of the Committee said:

“The in-work service promises progress in finally breaking the cycle of people getting stuck in low pay, low prospects employment. We congratulate the Government for developing this innovation. As far as we can tell, nothing like this has been tried anywhere else in the world. This is a very different kind of welfare, which will require developing a new kind of public servant.”

This imprudent comment from Field implies that individuals need financial punishments in order to find work with better prospects and higher pay. Yet there are profoundly conflicting differences in the interests of employers and employees. The former are generally strongly motivated to purposely keep wages as low as possible so they can generate profit and pay dividends to shareholders and the latter need their pay and working conditions to be such that they have a reasonable standard of living. It’s not as if the Conservatives have ever valued legitimate collective wage bargaining. In fact their legislative track record consistently demonstrates that they hate it, prioritising the authority of the state above all else.

Workplace disagreements about wages and conditions are now typically resolved neither by collective bargaining nor litigation but are left to management prerogative. This is because Conservative aspirations are clear. Much of the government’s discussion of legislation is preceded with consideration of the value and benefit for business and the labour market. They want cheap labour and low cost workers, unable to withdraw their labour, unprotected by either trade unions or employment rights and threatened with destitution via benefit sanction cuts if they refuse to accept low paid, low standard work. Similarly, desperation and the “deterrent” effect of the 1834 Poor Law amendment served to drive down wages.

In the Conservative’s view, trade unions distort the free labour market which runs counter to New Right and neoliberal dogma. Since 2010, the decline in UK wage levels has been amongst the very worst declines in Europe. The fall in earnings under the Tory-led Coalition is the biggest in any parliament since 1880, according to analysis by the House of Commons Library, and at a time when the cost of living has spiralled upwards.

It’s worth considering that in-work conditionality and sanctions may have unintended consequences for employers, too. If employees are coerced by the State to find better paid and more secure work, and employers cannot increase hours and accommodate in-work progression, who will fill those posts? Financial penalties aimed at employees will also negatively impact on the performance and reliability of the workforce, because when people struggle to meet their basic physical needs, their cognitive and practical focus shifts to survival, and that doesn’t accommodate the meeting of higher level psychosocial needs and obligations, such as those of the workplace. It was because of the recognition of this, and the conventional wisdom captured in the work of social psychologists such as Abraham Maslow that provided the reasoning behind the policy of in-work benefits and provision in the first place. 

In-work conditionality reinforces a lie and locates blame within individuals for structural problems – political, economic and social – created by those who hold power. Despite being a party that claims to support “hard-working families,” the Conservatives have nonetheless made several attempts to undermine the income security of a signifant proportion of that group of citizens recently. Their proposed tax credit cuts, designed to creep through parliament in the form of secondary legislation, which tends to exempt it from meaningful debate and amendment in the Commons, was halted only because the House of Lords have been paying attention to the game.

Last month I wrote about the Department for Work and Pensions running a Trial that is about “testing whether conditionality and the use of financial sanctions are effective for people that need to claim benefits in low paid work.” 

The Department for Work and Pensions submitted a document about the Randomised Control Trial (RCT) they are currently conducting regarding in-work “progression.” The submission was made to the Work and Pensions Committee in January, as the Committee have conducted an inquiry into in-work conditionality. The document specifies that: This document is for internal use only and should not be shared with external partners or claimants.” 

The document focuses on methods of enforcing the “cultural and behavioural change” of people claiming both in-work and out-of-work social security, and evaluation of the Trial will be the responsibility of the Labour Market Trials Unit. (LMTU). Evaluation will “measure the impact of the Trial’s 3 group approaches, but understand more about claimant attitudes to progression over time and how the Trial has influenced behaviour changes.”

Worryingly, claimant participation in the Trial is mandatory. There is clearly no appropriate procedure to obtain and record clearly informed consent from research participants. Furthermore, the Trial is founded on a coercive psychopolitical approach to labour market constraints, and is clearly expressed as a psychological intervention, explicitly aimed at “behavioural change” and this raises some very serious concerns about research ethics and codes of conduct, which I’ve discussed elsewhere. It’s also very worrying that this intervention is to be delivered by non-qualified work coaches.

Owen Smith MP, Shadow Work and Pensions Secretary, commenting on the Work and Pensions Select Committee’s report  into ‘in-work progression’ in Universal Credit, said:

“This report shows there are significant challenges facing the new Universal Credit system, not least how to ensure work pays and people are incentivised in to jobs.  As a result, it is deeply worrying that at the early part of the rollout, huge Tory cuts to work allowances will undermine this aim, as 2.5 million working families will left over £2,100 a year worse off. 

“If Universal Credit is to be returned to its original intentions of supporting and encouraging people in to work then Stephen Crabb needs to change his mind and reverse the Tory cuts to working families urgently. 

“It’s also problematic that the committee found there is insufficient information available after a year of piloting in-work conditionality, especially given the complete mess that has been made of the existing sanctions regime.  The DWP should move quickly to make available as much information as possible, to ensure the roll out of Universal Credit is properly scrutinised.”

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Pictures courtesy of Robert Livingstone

Related

Benefit Sanctions Can’t Possibly ‘Incentivise’ People To Work – And Here’s Why

Study of welfare sanctions – have your say

The politics of punishment and blame: in-work conditionality

It’s time to abolish “purely punitive” benefit sanctions


This post was written for Welfare Weekly, which is a socially responsible and ethical news provider, specialising in social welfare related news and opinion.

 

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10 thoughts on “Report shows significant challenges facing the Universal Credit system

  1. I note the Committee say “a successful in-work service will also require partnership between JCP and employers to a degree not seen before.” In the event there appears to be no need for any partnership to develop or even be considered. The arrived-at legislation creates a situation where the only way for employers to ensure their staff will be available for work and not continually being called in at all hours by the DWP, this to suffer ongoing harassment from their ‘job coaches’, is to pay them so much they’ll not be subject to in-work conditionality at all. This will necessarily include those working part-time. How many businesses owners, indeed, how many politicians realise this, remains to be seen. The consequences for the economy too remain unclear.

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  2. It also doesn’t address the basic premise of this capitalist system – that someone is always at the bottom of the pile, not through any fault of their own, but because this unfair system does not provide fair opportunities for everyone.

    Liked by 1 person

  3. Don’t know if you’re aware of this document Kitty – Essay by Jonathon Rutherford

    http://www.midmoors.co.uk/Unum/unum_in_uk.pdf

    This charts the origin and development of this particularly pernicious neoliberal brand of welfare legislation and consequent practice that has now become the default approach for DWP treatment of the unemployed per se. Frank Field was a main player then as was Lord Freud, particularly dull and unintelligent men. Initially, the pseudo ‘bio-psychosocial model’, so called, was adopted and applied to the now notorious ESA medical assessments by New Labour and was enthusiastically embraced by the Conservatives on their return to office in 2010. Originally applied to those in receipt of the then new ESA, the ‘behavioural change’ approach, including the heinous and counter-productive sanctions regime, has been adopted wholesale by the DWP and applied to all people in receipt of benefits.

    This article illustrates why the whole bio-psychosocial model is bogus (based on a discredited social theory as espoused by Talcott Parsons) and adopted originally by Health Insurance companies in the States to deny sick people their genuine medical claims. The DWP have long since been using the same discredited (and since deemed illegal in the States) approach to deny people their benefit entitlement here! Much of the history of this is known by many but certainly not in sufficient quantity so as to provide impetus to challenge the latter day application of this grotesque equivalent to phrenology and to seriously investigate why this snake-oil pseudo-science has been the underpinning basis for Welfare reform here?

    Hardly surprising then that all costs associated with Welfare ‘reform’ is spiraling since the underlying crack-pot ideology is essentially institutionalised brutality and bullying based on a discredited ideology. This, coupled with a private-sector led welfare to work ‘payment by results’ approach has seen billions wasted on systems and practices that plainly don’t work, on fraud, on a multitude of Benefit decision appeals that regularly get overturned by perfectly reasonable tribunal judges who see through the willing stupidity of ATOS and the DWP, on increased bureaucracy, on a UC IT system that will never work given the complexities involved – and all for what? Because the government see fit to prosecute a service designed to kick people up the arse because they happen to commit the crime of finding themselves unemployed! As you say, the structural reasons for unemployment are totally ignored. As all reasonable people know the simplest way to combat unemployment is to take steps to create meaningful employment, but instead we have brutish unintelligent political leaders intent on pushing through their ugly agenda, blithly ignoring the huge damage, suffering, pain, even death in many cases, it unnecessarily causes to perfectly innocent, genuinely disadvantaged unemployed people. If this isn’t a definition of insanity then I don’t know what is.

    Anyway, rant over. Keep up the great work Kitty!

    Liked by 1 person

    1. Now I didn’t know that Talcott Parsons, a conservative functionalist sociologist, contributed to the biopsychosocial model, now that I do, it does make sense. But it is absolutely pseudoscience and psychopolitics. Thanks for the paper 🙂

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  4. I have just watched the Select Committee spoken about in this article and what struck me most was the subdued demeanor of the opposition MP’s on the Panel.

    A Stark difference to the previous Committee who were very willing and able to challenge and discredit the DWP members and their ideological driven policies.

    Reading comments above, I wonder if FF is some sort of plant.

    Every time I hear him at one of these sessions, I pinch myself and ask myself yet again is he truly not a Conservative?

    I really believe we have been stitched up by having him appointed.

    He does appear to be unintelligent and far too willing to please, but the fact that he appears to have a firm grip of the Chair, makes me question how unintelligent he really is.

    He guides questions and cuts in when he feels things may get less than polite.

    It really does grieve me to see him openly praising this grotesque agenda.

    We need to find a way to get him removed.

    He is a discrace to the Labour Party.

    He appears to be batting for the other side.

    Liked by 1 person

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