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Politics

Universal Credit’s Black Hole

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A Conservative success story: Foodbanks help both those in work and unemployed

THE UK Government’s drive to cut the benefits paid to those most in need through the introduction of Universal Credit has impoverished the most vulnerable in society and removed universal support from the disabled replacing them with a patchwork of make-do-and-mend solutions which rely on councils to bail out the Westminster Government for its own failings in delivering the new benefit system in a working form.

The series of failures has prompted the National Audit Office, which scrutinises public spending for Parliament, to call on the UK Government to pause Universal Credit’s roll out until it sorts out the mess the reform has caused and is causing.

That call was rejected by the UK Government and led to allegations that the minister responsible, Esther McVey, had misled Parliament both about the NAO report’s content and the success of the Universal Credit roll out.

WELSH GOVERNMENT WARNS ON UC

Plagued by IT issues, incompetence, and the sort of ministerial short-sightedness that regarded the Council Tax as an untrammelled success, Universal Credit’s roll out across Wales has caused Welsh Government Housing and Regeneration Minister Rebecca Evans to write to Esther McVey, the Secretary of State for Work and Pensions, to warn about the impact Universal Credit is having on some of the most vulnerable people in Wales.

Rebecca Evans said: “Foodbank use in areas where Universal Credit has been rolled out has increased by 30% according to National Audit Office statistics, compared to a 12% increase in non-Universal Credit areas. This is extremely worrying.

“A Universal Credit claimant survey from Esther McVey’s own department shows that four in ten claimants were experiencing financial difficulties, and that 46% of new Universal Credit claimants need help to make their claim online.

“I have asked the Secretary of State to make Universal Support for people who claim Universal Credit available as widely as possible to help those people who are experiencing difficulties in managing their finances, and for those who are struggling with digital access.

“The recent National Audit Office report was clear; local authorities, housing associations and landlords are all seeing an increase in rent arrears since the introduction of Universal Credit.

“This chimes with many concerns raised and reported to me by the housing sector in Wales.

“The National Audit Office highlighted that the system is lacking in ways to identify vulnerable people, which makes it difficult to see how they are getting the right support, from the outset when they apply for Universal Credit. I have asked the Secretary of State to explain how she plans to rectify this.

“People who are more vulnerable can be offered alternative payment arrangements through Universal Credit, but we are seeing real inconsistencies in the way this is offered to claimants; the Department of Work and Pensions’ own claimant survey indicated that as many as 48% of those surveyed had to request this themselves, rather than being offered it proactively.

“I am deeply concerned about the flaws of Universal Credit, and its impact on the most vulnerable people in Wales, and I will continue to press the UK Government on addressing these.”

In Carmarthenshire, the Council has already set aside resources to help those plunged into uncertainty and financial chaos by the Tory policy, while across Wales Universal Credit recipients have experienced delays in payments and cuts to the benefits they receive leaving many in dire financial straits. In some cases, local authorities are stepping in to bridge the gap, but others are left unable to pay their rent and face eviction as a result. Some landlords are now refusing to take Universal Credit claimants owing to the defects in the payments system, penalising those in need for the incompetence of the DWP.

UNIVERSAL CREDIT FAILING

By the end of this parliament Universal Credit (UC) is expected to be fully rolled out. This new integrated benefits system for people both in- and out-of-work will shape the living standards of the lowest income families in the UK.

Part of the rationale for UC was making sure people are better off working. It is right that families should be able to better their living standards through work, yet in the UK today, the majority of people experiencing poverty live in working households.

Working poverty is highest among lone parents and couples with children with only one earner or where no one works full time.

Among households in working poverty that do not have all adults in full time work, over four in 10 have children of primary school age or below; two in 10 have children under the age of three. Some three in 10 contain a family member with a disability.

Bevan Foundation Director, Victoria Winckler, said: “Universal Credit has been in the pipeline for more than five years, but it is only now reaching all parts of Wales. The number of claimants is starting to go up quite quickly and we are beginning to see the impact of it on individuals, families and communities.”

Despite the number of people set to be affected, there’s been no up-to-date assessment of how the change will affect people in Wales.

Victoria Winckler continued: “The evidence from other parts of the UK is mixed. Some claimants cope well with the transition to monthly payments and the requirement to try to find work or increase the number of hours they work. But others struggle, getting into arrears with bills, debt and even having to rely on food banks.”

BENEFIT CHANGES HIT WORKERS HARD

Serious problems have now emerged in the treatment of the self-employed because of the way their earnings are recorded under universal credit. The issues have arisen because a “minimum income floor” (MIF), based on the national living wage, is used to calculate universal credit payments each month.

Because self-employed workers’ earnings fluctuate from month to month, they sometimes fail to meet the minimum figure and lose out compared with salaried counterparts. They are also only given a year to get their businesses off the ground before the MIF kicks in.

Ministers argue that the system has been designed to encourage people to increase their work and move into better jobs. However, the new report warns that some people have little choice other than self-employment. Ministers also ignore the fact that – for many – better jobs at higher wages are simply not available.

In addition, independent research has established that Universal Credit is – if anything – even worse value for money when it comes to administration costs than the system it replaced.

Having blown £817m on an IT infrastructure project which is unfit for purpose and now redundant, the current running costs per Universal Credit claim run at around £700. The claim made for Universal Credit was that it would reduce costs per claim to £173. There is no sign and little prospect of that target being hit.

DWP DEAF TO REASON

The National Audit Office report into Universal Credit is even more damning.

The NAO says: ‘We think that there is no practical alternative to continuing with Universal Credit. We recognise the determination and single-mindedness with which the Department has driven the programme forward to date, through many problems. However, throughout the introduction of Universal Credit local and national organisations that represent and support claimants have raised a number of issues about the way Universal Credit works in practice.

‘The Department has responded to simple ideas to improve the digital system but defended itself from those that it viewed as being opposed to the policy in principle.

‘It does not accept that Universal Credit has caused hardship among claimants, because it makes advances available, and believes that if claimants take up these opportunities hardship should not occur. This has led it to often dismiss evidence of claimants’ difficulties and hardship instead of working with these bodies to establish an evidence base for what is actually happening. The result has been a dialogue of claim and counter-claim and gives the unhelpful impression of a Department that is unsympathetic to claimants’.

The report continues: ‘The Department has now got a better grip of the programme in many areas. However, we cannot judge the value for money on the current state of programme management alone. Both we, and the Department, doubt it will ever be possible for the Department to measure whether the economic goal of increasing employment has been achieved. This, the extended timescales and the cost of running Universal Credit compared to the benefits it replaces cause us to conclude that the project is not value for money now, and that its future value for money is unproven’.

A BLEAK PICTURE FOR THE POOREST

Chief Executive of Child Poverty Action Group Alison Garnham said: “It was sobering enough to learn from the DWP’s own survey last week that four in ten people claiming universal credit have financial problems many months into their claim. Now we have an NAO report confirming just how miserable the experience of claiming universal credit is for hundreds of thousands of people who rely on it. Organisations working with claimants have been saying the same to the DWP for many, many months.

“The picture the NAO presents is justifiably bleak. On the ground, new claimants can’t even be sure they will be paid in full and on time. And how many people will be helped into work by the benefit is far from clear.

“There are clearly fundamental design and delivery problems in universal credit which must be fixed but it has also had its funding dramatically reduced so its capacity to deliver on the original aims has been compromised. The big work allowance cuts in particular have made it harder for claimants to increase the rewards from work.”

Joseph Rowntree Foundation Chief Executive Campbell Robb said: “We all want to live in a society where everyone receives support when they need it, and where there is an anchor to keep people from being swept into poverty. Universal Credit should, in principle, offer that support.

“The UK already has a problem with destitution, with more than one and a half million people in 2017 left unable to feed themselves, stay warm and dry, keep a roof over their heads and keep clean.

“There are major design flaws in the rollout of Universal Credit which have been left unfixed. Delays and sanctions leave people without enough to live on, and they struggle to pay off debt from advance payments. That’s not right. This system needs an urgent overhaul so that people’s essential needs are met without trapping them in long-term poverty.

“It is also concerning that the NAO can find no clear evidence that Universal Credit will help to boost the number of people finding work. The system needs to support people experiencing in-work poverty too, which is currently rising for families with children. By increasing work allowances, the Government can help 2.5 million working families and prevent a further 310,000 people from being pushed into poverty.”

As Labour MP, and veteran campaigner for the rationalisation of welfare benefits, Frank Field pointed out to Esther McVey in the House of Commons last week: ‘40% of claimants finding themselves in financial difficulty, 25% unable to make a claim online, and 20% overall, but two thirds of disabled claimants, not being paid on time and in full’.

Accusing Ms McVey of ‘dissembling’ to Parliament, further probing revealed that Ms McVey had not even bothered to read the NAO report which she had so assiduously rubbished and which had been signed off by her own Department.

Politics

WG ends right to buy

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HOUSING association and local authority tenants in some parts of Wales have until January 26 to use the Right to Buy and associated Schemes after which they will be abolished in Wales.

People who are eligible and wish to buy their own home must have completed an application form available from their landlord or the Welsh Government website and submitted it to their landlord before the upcoming deadline of 26 January 2019.

Housing and Local Government Minister Julie James said: “We passed the Abolition of the Right to Buy and Associated Rights Act to protect the stock of social housing in Wales from further reduction, so it is available to provide affordable housing for people who need it. This legislation is one of a range of actions we are taking to increase the supply of housing in Wales.

“Between 1981 and 2016, over 139,000 local authority and housing association homes were sold under the Right to Buy. This has led to many people, many of whom are vulnerable, waiting longer to access a home they can afford. Abolishing the Right to Buy is also giving social landlords more confidence to invest in building new social housing by removing the risk of these homes being sold after only a few years.

“We are committed to creating 20,000 more affordable homes by 2021 and we are supporting social landlords to help us to achieve this.”

Right to Buy has already been suspended in Anglesey, Carmarthenshire, Denbighshire, Flintshire, Powys, Swansea and Cardiff. Following the one year allowed under the Act to exercise their rights, the Right to Buy and associated rights will finally be abolished throughout Wales on the 26 January 2019.

Further information is available from housing associations and local authority housing teams. Information on the legislation and how it will affect tenants is available on the Welsh Government website

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Politics

Brexit bots increased division

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A RESEARCH collaboration from academics at Swansea University and the University of California, Berkeley suggests that information automated software agents or ‘bots’ were used to spread either ‘leave’ or ‘remain’ social media stories during and after the Brexit referendum which drove the two sides of the debate further apart.

Research by Professor Talavera Professor, and PhD student Tho Pham from the School of Management, in collaboration with Professor Yuriy Gorodnichenko, at University of California, Berkeley, focused on information diffusion on Twitter in the run-up to the EU Referendum.

Professor Talavera said: “With the development of technology, social media sites like Twitter and Facebook are often used as tools to express and spread feelings and opinions. During high-impact events like Brexit, public engagement through social media platforms quickly becomes overwhelming. However, not all social media users are real. Some, if not many, are actually automated agents, so-called bots. And more often, real users, or humans, are deceived by bots.

TWITTER ANALYSIS
Using a sample of 28.6 million #Brexit-related tweets collected from 24 May 2016 to 17 August 2016, researchers observed the presence of Twitter bots that accounted for approximately 20 per cent of total users in the sample. Given the preponderance of re-tweets from bots by humans, a key question is whether human users’ opinions about Brexit were manipulated by bots.

Empirical analysis shows that information about Brexit is spread quickly among users. Most of the reaction happened within 10 minutes, suggesting that for issues critically important to people or issues widely covered in the media, informational rigidity is very small. Beyond information spread, an important finding is that bots seem to affect humans.

However, the degree of influence depends on whether a bot provides information consistent with that provided by a human. More specifically, a bot supporting leaving the EU has a stronger effect on a “leaver” human than a “remain” human.

‘ECHO CHAMBER’
Further investigation shows that “leavers” were more likely to be influenced by bots compared to “remainers”. These results suggest that dissemination of information is consistent with what is frequently referred to as an ‘echo chamber’ – a situation in which information, ideas, or beliefs are amplified or reinforced by communication and repetition inside a defined system, revealing that the outcome is that information is more fragmented rather than uniform across people.”

Professor Talavera said: “Social bots spread and amplify the misinformation, thus influencing what humans think about a given issue. Moreover, social media users are more likely to believe (or even embrace) fake news that is in line their opinions. At the same time, these users distance themselves from reliable information sources reporting news that contradicts their beliefs. As a result, information polarisation is increased, which makes reaching consensus on important public issues more difficult.”

“It is now vital that policymakers and social media should seriously consider mechanisms to discourage the use of social bots to manipulate public opinion.”

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Politics

WG gets help on regional development

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THE ORGANISATION for Economic Co-operation and Development (OECD) will lead a new project to support the development of regional economic development policy in Wales, Economy Minister Ken Skates and Brexit Minister Jeremy Miles have announced.

The Paris-based experts will use their extensive international experience of regional economic development to provide rigorous challenge and advice to the Welsh Government as it implements its new Economic Action Plan and develops new plans for Regional Investment in Wales after Brexit.

As world leaders in their field, the OECD’s input will help ensure that Wales’ future regional economic development model embeds international best practice.

The internationally-renowned body has provided advice to the Welsh Government before. In 2014, it produced a major report to help improve schools in Wales. In subsequent years it has also supported Welsh Government work on schools reform.

This new project will see international experts visit Wales and discuss regional economic challenges and opportunities with partners. This, in turn, will help the Welsh Government to develop a new toolkit for action as well as clear international benchmarks to monitor performance.

Minister for Economy and Transport Ken Skates said: “Our new Economic Action Plan is a major public policy reform and I want to ensure we receive the very best advice and strongest international challenge to help us achieve our economic ambitions.

“The changes we have outlined through the Economic Action Plan to boost regional economies across Wales are profound, as is our ambition for stronger regional partnership working in Wales to boost inclusive and sustainable growth. There is no-one better to help us deliver this than the OECD.

“We have asked the OECD to advise us on ways to strengthen regional economic governance, build capacity, and support more joined up economic policymaking, including through developing a practical toolkit for both us and our partners to use to support those changes.
“We must ensure Wales remains competitive and that we benchmark ourselves against the best and learn from great ideas and new innovation across the world.”

Minister for Brexit Jeremy Miles said: “EU regional investment has helped improve our economy, but Wales needs further investment to address the structural economic challenges we continue to face. We continue to press the UK Government for the £370m annually we receive for our European Structural and Investment funds in Wales in keeping with promises made during the referendum campaign that Wales would not be worse off and for regional economic development in Wales to remain with the Welsh Government after we leave the EU.

“Our project with the OECD will play an important part in Wales’ development of the right policy and structures for a successor regional investment approach to replace EU regional funds, closely aligned to our Economic Action Plan. We are not looking to simply replicate the EU model in Wales, and are committed to creating a new, made in Wales approach that reflects international best practice, builds on Wales’ distinctive legislative and policy landscape, and delivers for our people, businesses and communities.

“This partnership with the OECD will help strengthen that work and give confidence to our partners that new and dynamic partnerships can be formed to innovate and link policies in fresh and imaginative ways.”

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