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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.

News

Cabinet recommends 5% Council Tax rise

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AT ITS meeting on Monday this week, the Council’s Cabinet decided to recommend a Council Tax rise of 5% for the next financial year.

If the Full Council meeting agrees with its suggestion at its meeting on February 27, the rise will add £1.04per week to the average Band D household Council Tax bill.

Band D is the marker used by Councils across Wales to represent the average home.

Opening budget discussion, Cabinet Member for Finance Cllr Bob Kilmister, praised the level of scrutiny by Council committees and public engagement. The Facebook Live webcasts were particularly successful, the second reaching a record audience for such an exercise. Cllr Kilmister reported one engagement event at Llanteg produced high-quality questions, which demonstrated how the public had engaged with the process and the issues behind the Council’s budget. Cllr Kilmister also expressed satisfaction about engagement with the trades unions, whose written budget submissions are included in the consultation report for the first time.

Discussing the proposed Council Tax rise, Cllr Kilmister said where scrutiny committees expressed a preference, it was for a 5% rise. That figure also received the most support from the public who engaged in the consultation process. The unions wanted a 10% rise to preserve frontline services and avoid staff cuts.

He outlined amendments to aspects of the budgets had been made following committee scrutiny. However, he also reported a potential £1m item of additional expenditure due to the closure of Asian markets to recycling from overseas. The pressure, Cllr Kilmister reported, was UK-wide and resulted from a global reduction in recycling capacity.

Bob Kilmister said he accepted one particular request for amendment, which came from the Council’s Policy Overview Committee and related to funding climate change initiatives, but difficulties existed about the funding commitment without specific projects to which it could be allocated.

Accordingly, the Cabinet approved an amendment to the budget statement resolving to provide sufficient funding necessary to enable progress to be made and will make full use of any external funding opportunities. Sufficient resourcing will include the consideration of suitable Capital Bids and feasibility funding in line with the Capital Programme managed by the Capital Board and if necessary, revenue resource in the coming financial year, if it is necessary to support the work of becoming a Net Zero Carbon County by 2030.

Bob Kilmister underlined the Council’s commitment and his commitment but said a considered approach was needed. He was adamant he would not agree to the diversion of resources from core services, such as education and adult social care. He said projects needed a clear business plan and had to show how benefits would accrue from capital investment and revenue use. Cllr Kilmister said he suspected extra money would come forward once the UK Government set the budget in March, possibly – although not certainly – through grants from the Welsh Government. He cautioned against depending on those grants.

The cost of adult social care and the budget for it was the subject of an impassioned intervention from Cllr Tessa Hodgson. Cllr Kilmister responded that ‘we are at a crisis point in adult social care’. Proposals for funding had to come from central government and come quickly. The current funding model for social care, he said, was not working; central government knew it didn’t work; had known it didn’t work for some time; had done nothing about it.

Making a political point at the end of the discussion, Cllr Paul Miller noted last year, when Pembrokeshire had a poor budget settlement, Conservatives had rushed to condemn the Welsh Government. He cynically observed this year, when Pembrokeshire had one of the best budget settlements, there hadn’t been a positive response to the announcement.

Council Leader David Simpson wound up the debate with some strong words about those of the Council’s Overview and Scrutiny Committees which refused to give the Cabinet a steer on its budget for the coming year. He reflected upon the lack of consultation before budgets under the previous administration where councillors were given information the day before cuts were due to place.

David Simpson said he was frustrated that Council committees and their members, presented with information, sat on their hands when offered the chance to input into the process of budget-setting positively. He made it clear that a steer given at the consultation stage was not a commitment to support the budget in the chamber but a response to the information given to the committee during its questioning of Cabinet members and officers about the coming year’s budget.

The Council Leader took time to single out Cllr Brian Hall for congratulations on seizing the chance as Chair of the Corporate Overview of Scrutiny Committee to give Cabinet a steer by asking members of his Committee to vote on a recommendation to give to Cabinet based on the information they had before them on the day they met. That was the sort of response the Cabinet wanted to help it set priorities for the budget.

Cllr Simpson said democracy was in a chamber of sixty people and not just to be doled out by Cabinet. The budget, he said, ‘is not a Cabinet decision’ and found councillors’ reluctance to participate when invited to do so ‘strange’.

‘That’s life!’ Cllr Simpson observed bitterly to close the discussion.

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Politics

Assembly Committees report on Welsh Budget

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'People are searching for clarity and certainty': Says Finance Committee Chair, Llyr Gruffydd

FOUR National Assembly committees have published reports examining how the Welsh Government intends to spend its £17 billion budget on schools, hospitals, the environment and local services.

EQUALITY, LOCAL GOVERNMENT AND COMMUNITIES COMMITTEE

The Committee is disappointed the Welsh Government’s commitment to ending homelessness in Wales is not backed up by the amount of money allocated to tackling the problem. In fact, under the draft budget, funding will stay the same which equates to a real term cut when taking inflation into account.
The Committee recommends that the Welsh Government increases the allocation of funding to the Housing Support Grant and the Homelessness prevention budget line in the 2020-21 budget to ensure that the Welsh Government’s ambition on reducing homelessness to be rare, brief and unrepeated can be delivered.

CHILDREN, YOUNG PEOPLE AND EDUCATION COMMITTEE

The Committee has raised again this year how vital it is to ensure that enough money is made available to fund schools in Wales. While it welcomes the increase in local authorities’ funding and the commitment given by local government to use it to prioritise school and social care funding, it remains very concerned about school funding in Wales.
The Committee’s report calls on the Welsh Government to robustly monitor this funding and to demonstrate to the Assembly that this money is reaching our schools.

CLIMATE CHANGE, ENVIRONMENT AND RURAL AFFAIRS COMMITTEE

In the light of the Welsh Government declaring a climate emergency, the Committee was expecting a transformative budget showing how investment was being prioritised to address the issue. But members concluded the budget was business as usual and that it was unacceptable for the Welsh Government to continue to plead ignorance about the cost and potential benefits of its decarbonisation policies.
From next year the Committee expects the Welsh Government to change the way it does things – the draft budget should be accompanied by detailed information about the carbon impact of the allocations in it.

ECONOMY, INFRASTRUCTURE AND SKILLS COMMITTEE

The Committee‘s report looks to get beyond the headline figures of the Draft Welsh Budget by looking at issues including rail funding, research and development funding and how the Welsh Government is planning to support regional economies in Wales.
The Committee calls for greater transparency on the funding for KeolisAmy, the company who operates the Wales and Borders rail franchise as TfW Rail Services, as well as their performance targets and the penalties they face for poor service.
During the scrutiny process, Kirsty Williams AM, the Education Minister, admitted that the Welsh Government did not know how much it spent on research and development funding. The Committee has called for a review, especially as a significant amount currently comes from the EU.

The Committee has also called for the release of research behind the Welsh Government’s new Regional Economic Frameworks and Regional Indicative Budgets which will be used to develop regional economies across Wales.

HEALTH, SOCIAL CARE AND SPORT COMMITTEE

The Committee believes that this draft budget fails to show a shift towards mainstreaming prevention and service transformation. Going forward, the Welsh Government needs to demonstrate how its funding allocations will support long term sustainable change in the delivery of integrated health and social care services. The Committee expects to see a greater strategic focus on transformation and prevention in future budget rounds.
The reports follow an overview of the draft budget from the Finance Committee which raised concerns around climate change, poverty and Brexit.
Chair of the Finance Committee, Llyr Gruffydd AM, said: “We are in unprecedented times as we approach Brexit and, risks and opportunities aside, what people are searching for most of all are clarity and certainty.
“The Welsh Government expects EU Structural funds will be replaced by the UK Government. But agriculture sits outside of this so the Committee would like assurances farming payments will continue as normal until a new funding structure is brought in.
“Nobody should be worse off as a result of leaving the EU.”

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Politics

Welsh councils fail audit requirements

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Maenclochog: A small council had big problems

JUST two-thirds of Wales’ town and community councils met the statutory deadline for publishing their audited accounts
The timescales for councils to publish their accounts are set out by law, and yet only 486 of Wales’ Town and Community councils (66%) met this deadline in 2019.
There are 735 community and town councils in Wales. As a tier of local government, they are elected bodies, with discretionary powers and rights laid down by Parliament to represent their communities and provide services for them.
As at 30 November 2019, while a further 51 audits had been completed, 38 community councils still had not submitted accounts for audit. The number of qualified audits is still too high at 218 councils. This is according to a report issued today by the Auditor General for Wales.
The audit arrangements for community councils are designed to provide residents with a reasonable level of comfort that public money is being handled effectively. With councils handling more public money than ever, it’s increasingly important that councils follow the process set out in law.
However, the Auditor-General’s report shows that the number of councils failing to submit their accounts on time has risen compared to last year.
The failures have led to 218 qualified audit opinions to date, which means 218 councils either failed to comply with their statutory requirements or misstated information in their annual return. While this is less than last year, this number may rise once work on the remaining councils has been completed.
There are circumstances in which issues are of such significance that the Auditor General brings these to the attention of the public. During 2019, twelve such reports were issued in the public interest due to significant failures in the management of public funds by local councils.
MAENCLOCHOG A CASE IN POINT
One of the reports issued in 2019 concerned Maenclochog Community Council, where the Wales Audit Office identified a worrying series of governance failures for the financial years 2015-16 and 2016-17.
Maenclochog’s Community Council, with an annual precept of £4,000, is one of the smallest Community Councils in Wales. However, in spite of its small budget, councillors – who are ultimately responsible for ensuring public money is fully accounted for – failed to check proper accounting records had been maintained. The absence of bank statements reconciled to items of expenditure meant that the Wales Audit Office couldn’t provide an opinion on whether or not the annual accounts properly present the Council’s receipts and payments.
As a result, the WAO qualified the Council’s accounts for both 2015-16 and 2016-17.
The Auditor also mad a swingeing criticism of councillors for failure to ensure compliance with basic governance requirements. The Maenclochog report discloses that in the two financial years covered by the report, councillors had signed off on statements that they had fulfilled their statutory duties when they had done no such thing.
While the then clerk’s tardiness was a significant factor in the Council’s failure to comply with its statutory responsibilities, the Auditor points out council members sitting at the time bear responsibility for the Council’s failure to file accounts on time, or at all, until the WAO intervened in January 2018.
Since that time, a new clerk has been appointed to the Council, while the failures took place in a period which bridged the 2017 community council elections.
The report found no evidence that the Council took any steps concerning the overdue accounts. The Council’s minutes do not record any concerns related to the delayed submission of the 2015-16 or 2016-17 accounts.
The Auditor concluded, therefore, individual councillors did not understand their responsibilities about the accounts.
There was also no evidence the Council had prepared a budget either for 2015-16 or 2016-17, as required by law.
AREAS FOR IMPROVEMENT
Auditor General, Adrian Crompton said: “Local councils are expected to play an increasingly important role in the delivery of public services and local communities. While I am delighted to see the positive response from some councils to our recommendations from last year,
“I am disappointed that some councils still receive qualified opinions for multiple reasons. I recommend that all councils consider the issues raised in this report and reflect on whether any of the issues may apply to them.”

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