Politics
Universal Credit’s Black Hole

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
Plaid Cymru demand for ‘fair share’ from HS2 voted down

THE SENEDD rejected Plaid Cymru calls to demand HS2 be redesignated as an England-only project to unlock billions of pounds of consequential funding for Wales.
Senedd Members voted 42-12 against a Plaid Cymru motion on HS2, a high-speed railway from London to Birmingham, following a debate on March 12.
The project was classified as a Wales-and-England project in 2015 by David Cameron’s UK Government despite not an inch of track crossing the border.
As a consequence, no funding has come to Wales under the Barnett formula but Scotland and Northern Ireland have received a population share of HS2 spending.
Plaid Cymru has made the case for £4bn in compensation based on estimates of the total cost but the Welsh Government has quoted a £400m figure based on spending to date.
Peredur Owen Griffiths, the party’s shadow transport secretary in the Senedd, warned Welsh rail infrastructure has been systematically underfunded by the UK Government.

Calling for an end to “fundamental injustice”, he said: “Wales has received a fraction of the rail enhancement funding it is owed, our infrastructure has suffered from decades of neglect and the UK Government has failed to deliver the fair funding Wales needs.”
The Plaid Cymru politician pointed to an acknowledgment from Heidi Alexander, the UK transport secretary, that Wales has received low levels of funding historically.
“But this underfunding is not just historical, it is ongoing,” he warned. “Westminster, whether red or blue, continues to deny Wales the consequentials it is due.”
Mr Owen Griffiths raised concerns about reports that UK chancellor Rachel Reeves plans to freeze spending on major new rail projects until after the 2029 general election.
Pointing out that Welsh ministers previously called for £5bn in consequential funding, he told the Senedd: “Clearly, the people of Wales cannot trust this Labour party to stick to its word.”
Mr Owen Griffiths criticised the Welsh Government’s “delete-all” amendment, which was narrowly agreed, for “U-turning” on previous policy positions.
He said: “Now, when it truly matters, they have collective amnesia. What has changed? … The only thing that has changed is Labour’s willingness to stand up for Wales when they finally got the chance to do something about it.”
Peter Fox, the Tories’ shadow transport secretary, accused Labour of playing politics. “It must be embarrassing for Labour backbenchers, hence not many here,” he said.

Labour’s heckler-in-chief Lee Waters pointed out: “There’s nobody on your front bench.”
Mr Fox said: “Politicians in both Wales and England were calling for billions of pounds … but now Labour are in power in Westminster, their call is for just a meagre £400m.”
Labour backbencher Mick Antoniw pointed out that the previous Conservative UK Government could have designated HS2 as an England-only project.
Mr Fox, a former council leader, said the Tory Senedd group has stood against its own party on HS2 funding, adding: “It’s a kick in the teeth that you are turning your back.”
His Conservative colleague Gareth Davies warned of a “grotesque imbalance” between spending on rail in north Wales compared with the south of the country.
Labour’s Hefin David remarked: “The closer we get to an election, the poorer the standard of debate happens to be in this chamber. You would swear … that actually there’s been no progress whatsoever on rail in Wales which is manifestly not the case.”

Dr David pointed out that the newest trains in the whole of Europe now run on the Rhymney line through his Caerphilly constituency following an “incredible transformation”.
Welsh Lib Dem leader Jane Dodds said: “I feel these … debates are really the opposition parties putting down a motion and the Welsh Government saying ‘delete all’, and it feels like on this occasion just for the point of doing it and that depresses me beyond belief.”
Labour’s Alun Davies agreed, saying: “I don’t believe that’s the correct way of approaching these debates. We should look for consensus where possible – and that’s coming from me. We should look towards amending motions rather than deleting them.”
Wales’ transport secretary Ken Skates said the Welsh Government took ownership of the core valley lines and “transformed a liability into an asset”.

He told the Senedd: “And now that we have a Labour UK Government we will transform services across north Wales as well, increasing services by 50% next year.”
Mr Skates said a review of Network Rail processes will ensure Wales finally receives a fair share of all future rail infrastructure investment.
Business
‘We can’t carry on as we are’: NRW set to face ‘rough old 12 months’

NATURAL Resources Wales is not out of the woods after making £10m cuts, slashing 250 jobs and receiving a £19m loan to cover an unexpected tax bill, a committee heard.
Llŷr Gruffydd, who chairs the Senedd’s climate committee, warned Natural Resources Wales (NRW) has been in a constant state of evolution and flux for many, many years.
David Henshaw, who chairs the board, said: “We can’t carry on as we are,” with NRW having agreed a target of cutting £10.9m from its budget by April 1.
He told Senedd members NRW’s massively committed workforce has found the “case for change” process really tough, with 256 posts removed and vacancies unfilled.
But he stressed: “Our duty is to face the challenge and actually deal with it.”
Appearing before the committee for scrutiny of NRW’s 2023/24 annual report on March 12, Sir David warned: “It’s going to be a rough old 12 months or so.”
Ceri Davies, acting chief executive, described NRW as being at a pivotal point, with a renewed focus on climate and nature.

She told the committee NRW has been trying to focus more on areas where it is uniquely best placed to deliver such as flood risk, biodiversity, water quality and regulatory work.
“It’s with a heavy heart that we give up some things,” she said.
Ms Davies added that NRW implemented a recruitment freeze, to minimise redundancies as far as possible, which has impacted on current staff.
“But we’re coming out of that now,” she said. “We’re supporting our staff through that and … we will be very shortly releasing opportunities for us to reinvest and to take on new staff.”
The Conservatives’ Janet Finch-Saunders questioned why NRW has an interim chief executive and a chief executive, asking how long the situation will continue.
Sir David replied that chief executive Clare Pillman has been off sick, saying: “She’s on the road to recovery, I think, so that’s why Ceri has been wonderfully acting up for us.”
Ms Davies has been acting up in the £150,000-a-year role since at least November, according to board papers.
Asked about funding in 2025/26, finance director Rachael Cunningham said NRW will have a total forecast budget of £298.3m – representing an annual increase of about £32.5m.
Carolyn Thomas, who chairs the petitions committee, raised public concern about NRW’s plans for its Nant yr Arian, Coed y Brenin and Ynyslas visitor centres.
Her Labour colleague Julie Morgan said the visitor centres are “much more than just a cafe”.
Sir David stressed: “These forests and places are not being closed, let’s be clear … what’s been looked at is the closure of cafes and shops which cost about £1m a year.”
He added: “We weren’t doing massive business in these shops and cafes, they were a big lossmaker … given the challenges of the budget, we had to look very seriously at it.”
On a 6% cut to enforcement, Ms Davies explained NRW has instead prioritised prevention. “When we’re in the enforcement territory, the damage has already been done,” she said.
She told the committee NRW will continue to take action on significant offences as a deterrent, with a 30% increase in enforcement in 2023/24.
Pressed about the Welsh Government having to cover an estimated £19m tax bill for NRW due to off-payroll working, Sir David said a long list of public bodies face a similar situation.
“It’s an issue which has been very difficult for us,” said Sir David, a former chief executive at Liverpool Council. “And there are some questions we need to ask ourselves.”
He added: “Should we have been more aware earlier? Probably, yes. But actually would it have made much difference…? Probably not. We’ve made clear that in terms of employment now, we have none of the issues … so that’s been settled.”
Ms Cunningham declined to provide detail on the extent of liability accepted by NRW following February’s board meeting “because that’s in the hands of HMRC”.
Education
‘When you’re in a hole, stop digging’: Cardiff University urged to rethink cuts

CARDIFF University chiefs have been urged to “reflect and think again” about colossal cuts, with the local Senedd Member saying: “When you’re in a hole, stop digging”.
Jenny Rathbone warned Cardiff University has been engulfed in an existential crisis that could threaten the future of the biggest and best-resourced university in Wales.
In January, the university announced plans to cut 400 jobs and courses – including nursing, languages and music – as well as merge departments such as maths and computing.
Ms Rathbone, who represents Cardiff Central, said the university is home to Wales’ only planning school and the country clearly needs a pipeline of planners.
And, raising a 4,000-name open letter signed by mathematicians across the world, she pointed out that the university provides specialist teachers who are difficult to recruit.
Ms Rathbone asked: “Where then will the brilliant mathematicians of the future come from unless they have inspirational teachers?”

She added: “If we don’t have a modern foreign languages department … what impact will it have on … inward investment and selling Welsh goods and services to other countries?”
Leading a short debate on ensuring Wales has a thriving university sector, Ms Rathbone told the Senedd: “I accept that no change is not an option. Cardiff University is currently subsidising its day-to-day operations from its reserves to the tune of £31m a year.”
The former Islington councillor argued all universities are struggling with the UK Government “killing off the golden goose of higher fees for foreign students”.
Ms Rathbone said the university’s debt now stands at £321m, according to latest accounts.
She warned: “Clearly, this is not doing Cardiff’s reputation any good. And individual schools of excellence are horrified that they may be bundled into new colleges.”
She told Senedd Members: “I’ve spoken to a wide range of Cardiff academics and I’ve yet to find any support for the university’s academic future proposals.”
She added: “I hope the vice-chancellor and her executive board will reflect and think again, because, when you’re in a hole, stop digging.”
Calling for a “team Wales” approach as in Scotland, she argued more collaboration between universities on common principles is crucial to ensuring Wales has a thriving sector.
“Cardiff clearly has to make some changes,” she said. “They can’t spend money that they haven’t got. But clearly, these proposals have got to be agreed in social partnership with their main stakeholders, principally their staff.”
Calling for genuine consultation, Labour’s Julie Morgan, whose son-in-law works at Cardiff University, was dismayed by the extent of cuts across Wales.
“Young people are our lifeblood and this is cutting off opportunities for them,” she warned, saying she has been inundated with letters from distressed staff living in Cardiff North.
Plaid Cymru’s Cefin Campbell, a former lecturer, called for a cross-party review to address a “broken” financial model, with universities grappling with a deficit of £70m.

The shadow education secretary said universities face a further £20m hit from national insurance increases as well as a loss of up to £80m due to changes to student visas.
Responding to the debate on March 12, Vikki Howells, who was appointed higher and further education minister in September, pointed to Medr’s five-year plan published on Wednesday.
Medr, which was established in August, is responsible for funding and regulating post-16 education and research – including colleges and sixth forms unlike its predecessor Hefcw.
Ms Howells, a former teacher at Caerphilly’s St Cenydd Comprehensive, said the Welsh Government increased tuition fees for two years running and has provided an extra £28m for Medr this year.

She told Senedd Members: “Medr is absolutely adamant in its belief that no university in Wales is at risk of going under and we also are not looking at any mergers at all, either.”
Ms Howells, who studied at Cardiff University, stressed that a 90-day consultation on the proposals remains open, with a final decision expected to be considered in June.
She urged universities, colleges and schools to get behind Medr’s collective vision for a more joined-up, inclusive and collaborative tertiary education sector.
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