Agenda item

The following Motion was proposed by Councillor England and seconded by Councillor Barry:

1. This Council notes that Universal Credit, the single monthly benefit payment which replaces the six current working age benefits, has now been implemented across most of the country, but has yet to be rolled out to all benefits claimants in Dacorum.

2. This council further notes that within Dacorum the number of people affected is likely to be in the thousands and is concerned that the full implementation of Universal Credit in Dacorum is likely to prove seriously detrimental to the health and wellbeing of those thousands of local residents.

3. In recognition of this and of the fact that the move to full implementation of Universal Credit in other parts of the country has resulted in considerable financial hardship for many of those people moving onto this new system of benefit payments; council requests that before the full roll-out of Universal Credit across the Borough of Dacorum, measures are found to alleviate hardship caused by -

a. The five week wait for claimants to receive their benefits.

b. Payments going to one named member of a household.

c. The rent element of benefit being included in payments to Claimants

4. To support the measures taken to alleviate hardship, the council requests that an additional financial provision be included in the budget for 2020/2021 to provide for hardship payments and/or loans.

5.  In addition, Council requests that the Leaders of the Political Groups of the Council write to the Secretary of State for Work and Pensions to urge that amendments to Universal Credit be introduced that will -

a. End benefit sanctions as there is no evidence that sanctioning helps people into work.

b. Allow all new claimants to apply for Universal Credit in job centres supported by trained job centre staff rather than forcing new claimants to apply on-line.

c. Abandon the in-work conditionality for part-time or low paid workers.

d. Increase the overall level to which Universal Credit is funded.

A recorded vote was held:

18 for (Councillors Hollinghurst, Ransley, Townsend, Pringle, Link, McDowell, Claughton, Allen, Stevens, Taylor, Symington, Barry, Freedman, Woolner, England, Tindall, Hobson and Uttley)

28 against (Councillors Beauchamp, Williams, Sinha, Johnson, Peter, Barrett, Arslan, R Sutton, Bassadone, Timmis, Rogers, Durrant, Silwal, Adeleke, Guest, Wyatt-Lowe, Hearn, Riddick, Douris, Griffiths, Elliot, Anderson, Banks, G Sutton, Birnie, Chapman, Suqlain Mahmood and Sobaan Mahmood).

Therefore the Motion was lost.

The following Motion was proposed by Councillor England, and seconded by Councillor Barry:

1. This Council notes that Universal Credit, the single monthly benefit payment which replaces the six current working age benefits, has now been implemented across most of the country, but has yet to be rolled out to all benefits claimants in Dacorum.

2. This council further notes that within Dacorum the number of people affected is likely to be in the thousands and is concerned that the full implementation of Universal Credit in Dacorum is likely to prove seriously detrimental to the health and wellbeing of those thousands of local residents.

3. In recognition of this and of the fact that the move to full implementation of Universal Credit in other parts of the country has resulted in considerable financial hardship for many of those people moving onto this new system of benefit payments; council requests that before the full roll-out of Universal Credit across the Borough of Dacorum, measures are found to alleviate hardship caused by -

a. The five week wait for claimants to receive their benefits.

b. Payments going to one named member of a household.

c. The rent element of benefit being included in payments to Claimants

4. To support the measures taken to alleviate hardship, the council requests that an additional financial provision be included in the budget for 2020/2021 to provide for hardship payments and/or loans.

5.  In addition, Council requests that the Leaders of the Political Groups of the Council write to the Secretary of State for Work and Pensions to urge that amendments to Universal Credit be introduced that will -

a. End benefit sanctions as there is no evidence that sanctioning helps people into work.

b. Allow all new claimants to apply for Universal Credit in job centres supported by trained job centre staff rather than forcing new claimants to apply on-line.

c. Abandon the in-work conditionality for part-time or low paid workers.

d. Increase the overall level to which Universal Credit is funded.

Councillor England read the following statement:

“Universal credit has been in the headlines again and again since it was first announced in 2010.

The UC project has cost many times more than originally predicted and implementation has taken far longer than expected. There are clearly many problems.

We as a Council can do our part to help get to solutions: We know our community best, so on behalf of the residents of Dacorum it’s right that we add our voice to the wider lived-experience that the status-quo with the coming of UC in present form is not working as imagined, for our people and needs further changes before it is rolled out to Housing Benefit and Tax Credits transfers here.

As a major stock-holding Authority, Dacorum is a big landlord, facing the full effect of the impact of UC on rent arrears if people lose control of their budgeting.

It is important that we try to use the perspective of a UC Claimant:

The design of universal credit is supposed to “mimic” the world of work, where most people are paid monthly in arrears.

The rationale for introduction of UC was to simplify a complex system of multiple payments, but ten years after the idea was originally presented, the major effect has been to complicate the lives of mostly low-paid, often crisis-hit individuals, who have suddenly lost confidence and are without the resilience they would possess if they were in easier circumstances.

This vision is unrealistic for a poor person who has lost their job and urgently needs support. It also fails to recognise that many low earners are paid more frequently—only half of them are paid every month.

Under the old, multi-benefit system many faced a "cliff edge", (coming off benefits) where people on a low income would lose a big chunk of their benefits in one go as soon as they started working more than 16 hours.  OK, that was not great..

But the cliff edge hasn’t be re-moved – it has just been moved – to a really hard place!

In the new system, benefit payments are reduced at a consistent rate as income and earnings increase - for every extra £1 you earn after tax, you will lose 63p in benefits.

But cuts the system has been made significantly less generous since it was announced. Originally the gradient was designed to be much more gradual and more sensitive, at 36p in the pound.

People do not calculate decisions this way – we are not like economists; people over-respond to potential losses instinctively, and are under-incentivised by, er, “incentives”, or tapering.

Claimants also struggle with a process that has to be done online, with little more than half registering a claim without help. Then they wait five weeks to get their first payment. Many have no savings so request an advance and start off in debt.

By contrast, anyone claiming “old” out-of-work benefits would get help sooner and then receive it every fortnight.

The housing-support component of UC is subject to the same rigid monthly timetable, whereas the benefit it is replacing should be paid within two weeks of a first claim and allows a variety of payment periods.

Recalculated each month, UC injects continuing uncertainty into the lives of those receiving it, making it harder to budget. If their pay is temporarily higher than expected one month, the benefit is cut the next. A similar problem can arise merely from the timing of different pay cycles: if wages come weekly, there are some months when workers get an extra payment of income.

Moreover - Transferring onto universal credit from the old system will mean a loss of at least £1,000 a year for 1.9 million adults, and a gain of at least £1,000 a year for 1.6 million adults, according to an April 2019 report by independent think tank the Institute for Fiscal Studies.

Those with the lowest incomes stand to lose the most. Even if there are winners as well as losers, you have to look hard at who they are.

Dacorum’s share of those numbers is likely to be 4,000 negatively-affected people (plus employment and demographic churn). (150k pop of Dacorum divided by 68m = 0.0022 = 0.22% of 1.9m)

This all comes back to the choice between incentivising choices – working WITH people or enforcing them. But enforcement costs money and people!

When people are in receipt of benefits, they spend them in the local community, so benefits contribute to the local economy. When income stops for 5 weeks, the local economy is hurt.

What can we do, what should we do, as a Council, (now)?  (Motion, points 3 a-c)  

Relying on the knowledge we have, I think we need to ask the DWP for the following changes:

A - The five-week wait does not work. (Low paid people are much more likely to be receiving wages weekly) The Liberal Democrats have said we would like to see the Govt reduce the much-criticised five-week wait for claimants to receive their first UC payment to just five days.

B – We should remove the risk of UC being used to perpetrate Domestic Abuse. 21^st Century Households are more complex than the system is equipped to meet. People are individual – and economic domestic abuse is enabled by the one person per household rule. If there is an attempt to replicate a self-sufficient working household, at least two people could be earning independently, so why cannot Universal Credit work the same way?

C – (I do appreciate that Dacorum has an Officer focussing on this.)

If we know that rent needs to be paid direct, does that mean we now just do it, like they do in Scotland and Northern Ireland? I accept that there are some mitigating activities being undertaken here in Dacorum, but only when there is already evidence of a concern, so some people could slip through the net. Perhaps the PH can clarify?

(point 4)

If the Government chooses not to address the issues mentioned in part 3 of this Motion, provision needs to have been made in our Budget, to provide hardship payments or loans.

By doing so, we can hope to keep local people positive and bring some balance to this situation.

Will the Council earmark a Reserve for hardship payments – and shouldn’t we – in doing so - ask the Government to fund it (because it is patching-up their own surgery?)

There are four more potential “asks” suggested in this Motion. (5 a-d) (Idea was this gave scope for Tories to amend to their strength of requests)

a. End benefit sanctions as there is no evidence that sanctioning helps people into sustainable work. The CAB is calling for people to be supported, not sanctioned. We all know that the way out of a hole is a helping hand, not a spadeful of dirt..

b. We should allow all new claimants to apply for Universal Credit in job centres supported by trained job centre staff rather than forcing new claimants to apply on-line. Channel-shift is not appropriate in a crisis and should be applied very sensitively. We could undertake this ourselves, and we should, because our community will be the better for it.

c. We must, as a critical friend, call on the Government to abandon the in-work conditionality for part-time or low paid workers. This is a new phenomenon of the benefits systems as it relates to Tax Credits, so could mean that if you refuse extra hours.. or do not continually seek extra hours, you could be penalised… (if the taper was put back to the original levels, people would be positively incentivised..)

d. The nub is: UC is under-funded; Govt needs to Increase the overall level to which Universal Credit is funded.

There needs to be an investment of at least £5 billion in improving the wider benefit system. People are a valuable resource when well-fitted in a role, so actually every successful intervention to help people find their way of contributing, is a win-win.

LDs have argued to prioritise tackling the crisis of child poverty by abolishing the cruel two-child limit for Universal Credit and ending the unfair benefits cap.

Universal Credit hasn’t even started to be problematic in Dacorum yet, but it has already increased rent arrears.

It yokes together traditional out-of-work benefits with the more recently introduced tax credits that aim to prop up working incomes. Yet the systems are poles apart in how they operate. Integrating them requires a monthly adjustment of payments that introduces financial instability into the lives of those least able to cope with it.

The fact that UC, where introduced, has coincided with the rising use of food banks and rent arrears is no accident. The new benefit is neither simple nor clear for claimants, and—unlike before—they now have all their eggs in this single baffling basket.”

Councillor Hollinghurst agreed with the points raised by Councillor England. He pointed out that work in today’s modern world has changed, people used to be paid weekly. There is now a large GIG economy which is hard for people whose income changes week to week. The economy is going reasonably well at the moment but a downturn could mean that people employed in the GIG economy find themselves with low level income and we could be faced with a tsunami of UC claims because of the five week wait.

Councillor Pringle thanked Councillor England for a comprehensive presentation of problems caused by UC. Lots of people claiming UC are in work but on a low income. Any one of us could end up on UC, this is not happening to other people, this is all of us. Whatever the intent may have been to introduce UC, it is quite clear from reports that they are actually draconian measures leading to misery and people feel they are being punished for being in poverty. Northchurch had no food bank usage until UC introduced and 19 families now have had to use one. It is not just food parcels but hygiene parcels as well and children are going to school and being bullied for being in poverty. The bravest thing to do is admit that this needs to be amended or changed to help not hinder people.

Councillor Banks said she spent some time in the customer service unit observing the team and how they work. She said she observed 18 calls and 8 were specifically to do with UC. These people seemed to be confident with the process and Councillor Banks said she asked them for their views and not one had a complaint about UC. One gentleman had an issue with going online, but the job centre were able to help. This experience will hopefully balance some of the criticisms. Some of the general public are understanding the process.

Councillor Barry said she supported this motion. This was not a criticism of how Dacorum as a borough has been working with UC as we have a good housing team. It is concerning that since UC has been brought in, food bank usage has increased. Youth workers giving out food vouchers and this should not be their role. The process should be made simpler, currently not thinking about people moving over to UC who have been previously used to regular payments and now having to wait 5 weeks. 5 weeks isn’t how people get paid when in employment. The stress of this is causing mental health problems. Councillor Barry said she had friends on UC who have had to use their savings to pay off their rent arrears due to the 5 week waiting. This motion says to make it better and she echoed Councillor Pringle that it could be any of us.

Councillor Williams said he shared some concerns on aspects of Universal Credit. He said we were a large landlord and had over 10,000 properties, some of which will have tenants in receipt of UC. He explained that since the General Election and prior to this Motion he has raised these issues with the Hemel Hempstead MP to ask what the Government is doing to address the issues. He didn’t feel it was appropriate for the Borough Council to be budgeting for UC payment support. Whilst he had sympathy for people suffering these issues he couldn’t support the motion. 

Councillor England said he had attended a climate change conference today and the key thing to come out was how different each local authority is from each other. It is good to see that the Leader is aware and conscious of the issues. We should be asking the government who have introduced this policy, you are causing problem and local authorities can’t budget for that problem out of their own resources. It is stressful to lose a job without having to deal with UC.  He said he understood the idea that we want to put some rigour into the process for those that do not take it seriously. He appealed to people in the room that this isn’t achieved by sanctioning but by getting alongside people and showing them that they have something to offer to society. If we unlock that, we will be better off as a society. There is an opportunity here as UC has not been fully rolled out in Dacorum. This motion is not suggesting that we do anything, but that we say something and we need to say something.

A recorded vote was held:

18 for (Councillors Hollinghurst, Ransley, Townsend, Pringle, Link, McDowell, Claughton, Allen, Stevens, Taylor, Symington, Barry, Freedman, Woolner, England, Tindall, Hobson and Uttley)

28 against (Councillors Beauchamp, Williams, Sinha, Johnson, Peter, Barrett, Arslan, R Sutton, Bassadone, Timmis, Rogers, Durrant, Silwal, Adeleke, Guest, Wyatt-Lowe, Hearn, Riddick, Douris, Griffiths, Elliot, Anderson, Banks, G Sutton, Birnie, Chapman, Suqlain Mahmood and Sobaan Mahmood).

Therefore the Motion was lost.