Treasury officials have asked the Department for Work and Pensions (DWP) to find even deeper cuts to welfare spending, according to reports.
BBC Newsnight’s Political Editor, Allegra Stratton, has reported that treasury officials have asked Iain Duncan Smith to find £15bn of welfare cuts, rather than the £12bn originally promised in the Tory manifesto.
A treasury source allegedly told Stratton that both child tax credits and working tax credit could be in the firing line for £8bn in cuts.
The botched roll out of Universal Credit is set to continue under the Conservatives, it has been announced today.
Universal Credit is replacing six existing benefits including Working Tax Credit, Child Tax Credits and Housing Benefit, with one single monthly payment.
Described as a “welfare revolution” by Work and Pensions Secretary Iain Duncan Smith, Universal Credit will be made available to new single claimants in Richmond, Kirkwall, Lerwick and Stornoway, from today (11 May 2015).
According to the Department for Work and Pensions, all Jobcentres in the country will be offering Universal Credit to some groups of claimants by spring 2016.
Iain Duncan Smith MP, said:
“Universal Credit is bringing welfare into the 21st Century by restoring fairness to the system and making work pay in a modern labour market.
“We’ve already seen remarkable successes with Universal Credit claimants moving into work faster and staying in work longer.
“As part of our long-term economic plan, today sees the next stage of this welfare revolution with the continual roll out of Universal Credit.”
The new benefit is currently available in one-in-three Jobcentres (260). The government initially targeted the roll out of Universal Credit at the ‘easiest to help’ claimants, such as single people without children. For example, only 96 Jobcentres are currently offering Universal Credit to couples, families and lone parents.
DWP figures show that more than 64,000 people have made a claim. However, this is far short of the one million originally promised by Mr Duncan Smith to be in receipt of Universal Credit by April 2014.
Universal Credit has been dogged with delays and IT problems. DWP officials have already been forced to write off millions of pounds in failed IT software.
HM Treasury officials admitted last year that a potential £633 million could be written off by the time Universal Credit is completely rolled-out across the country and to all groups of claimants.
Children’s charity Gingerbread warned in October 2013 that working single parents will be worse off under Universal Credit. Researchers found that there will be little financial incentive for single parents to increase their hours beyond ‘mini-jobs’.
The charity also found that non-working single parents’ income will be on average lower under universal credit than it is now.
Commenting on the findings, Gingerbread chief executive Fiona Weir said at the time:
“Government claims that universal credit will make work pay, but in fact working single parents will be the biggest losers under the new system.
“The simple fact is that universal credit won’t deliver on its promise to make work pay. Single parents on low wages will be under considerable pressure to extend their hours under universal credit, but our research shows that financially, extra hours often won’t stack up.”
However, the DWP claims that Universal Credit will leave three million families better off and provide a £7 billion boost to the economy.
The department also claims that Fraud and Error will be reduced under Universal Credit, with officials having access to real-time HMRC earnings data.
Universal Credit will enable benefit payments to be calculated more accurately, says the DWP, ‘including topping up claimants earnings when they are on a low income’.
Source – Welfare Weekly, 11 May 2015
George Osborne has refused to categorically rule out rolling child benefit into Universal Credit (UC) to help contribute towards Conservative plans to save £12 billion from the welfare budget.
The Chancellor was asked repeatedly to rule it out and did not, but said that if the Tories had wanted to include child benefit in the new welfare system, they would have done so when it was created.
The independent Institute for Fiscal Studies (IFS) has said that scrapping child benefit and increasing UC for eligible families could save £4.8 billion a year.
But such a measure would mean that 4.3 million families who receive child benefit at the moment but would not be entitled to UC in the future would lose more than £1,000 a year, the IFS said.
At a Westminster briefing, Mr Osborne was asked to rule out rolling child benefit into UC.
The Chancellor replied:
“If you judge us on our approach in this parliament and if we wanted to put child benefit into Universal Credit, we would have done it when we set up Universal Credit.
“We have got a track record, we have got a plan that’s based on clear principles about making work pay and sharpening work incentives…”
Asked again to rule it out, Mr Osborne replied:
“I’ve just given you an answer. If we wanted to do it we would have done it when we created Universal Credit.”
Asked again, Mr Osborne said:
“I’ve given a very clear answer and you have to be a contortionist to think I’m not giving a pretty clear answer to that.”
The Conservatives’ plans for the next parliament involve saving £30 billion to contribute to deficit reduction, with £12 billion set to be cut from the welfare budget.
But the party has faced criticism from the IFS and Labour for failing to set out how it would achieve the majority – around £10 billion – of those welfare cuts.
The Chancellor said:
“If you look at our track record, the £21 billion we’ve saved in this parliament, you can look at principles we will apply to future such savings.
“We want to go on creating a welfare system which rewards work and the aspirations of families and protect the most vulnerable.”
Universal Credit is the coalition Government’s flagship welfare reform and simplifies the system by rolling a string of benefits and tax credits into one payment.
It is being rolled out in stages after being hit by delays and IT problems but will eventually take in jobseeker’s allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit.
Shadow chief secretary to the Treasury Chris Leslie said Mr Osborne had put middle income families in the firing line.
The Labour frontbencher said:
“The Tories won’t admit where their £12 billion of welfare cuts will come from, but after this press conference it’s now clear middle income families are in the firing line.
“George Osborne repeatedly refused to rule out rolling child benefit into universal credit. This would mean 4.3 million families losing over £1,000 a year, according to the independent Institute for Fiscal Studies.”
Treasury Minister Priti Patel said rolling child benefit into UC was not Conservative policy.
She told BBC News:
“We’re very clear as well, we have made it clear and we’ve said that we need to find £12 billion of welfare savings but it’s not our policy, that suggestion, and that there are other ways in which we can find those savings.”
But Ms Patel would not be drawn on whether the Tories will pay child benefit only for the first two or three children.
Asked if it was a possibility, she said:
“I’m not going to come here and start talking the ins and outs of the spending review because that will all be for the next government.”
Liberal Democrat leader Nick Clegg said he was not surprised by Mr Osborne’s failure to rule out the move as he insisted the change would not feature in his own party’s manifesto.
Speaking in Newtown, Mid Wales, he said:
“It’s no surprise to me that the Conservatives are considering pretty dramatic changes like taking child benefit away from lots of families because they have committed to taking £12 billion away from some of the most vulnerable families in this country.
> And we’ve been helping them for the last five years…
“They have committed to taking the equivalent of £1,500 away from eight million of the poorest families in this country to balance the books; they are not asking the very wealthy, those with the broadest shoulders, to make a single contribution through the tax system in balancing the books.
“Even if they did what is now being floated by George Osborne, they would still have £8 billion or £9 billion to fund. Who are they going to affect next, those with disabilities?
“Which other vulnerable groups will be affected by this unfair plan from the Conservatives?”
Asked whether the Lib Dems would rule out the move, Mr Clegg said:
“Child benefit rolled into the Universal Credit will not be in our manifesto because we are not planning the very, very extensive reductions in support given to the most vulnerable in our society that the Conservatives are.”
> But if anyone’s interested we’ll sell our souls again. Cheaply.
Pressed on whether it would be a measure he would block in coalition as a red line issue, Mr Clegg said:
“There’s no way the Liberal Democrats would ever endorse, of course not, in government or in opposition an approach which takes £1,500 away from eight million of the most vulnerable families in Britain.”
Source – Northern Echo, o7 Apr 2015
The Department for Work and Pensions (DWP) has discretely released dismal Universal Credit statistics on the same day as the latest unemployment figures are announced.
The figures reveal that there were just 31,030 people on Universal Credit by 8th January 2015.
This represents an increase of 17 per cent on the caseload compared to December 2014, but is still far short of the 1million (plus) originally promised by the Work and Pensions Secretary, Iain Duncan Smith MP.
The Jobcentre Plus office with the largest caseload was Oldham with 2,640 Universal Credit claimants, followed by Wigan with 1,930.
Of the people on the caseload in January 2015, 32 per cent were in employment and 68 per cent were not in employment.
47 per cent of the Universal Credit caseload in January 2015 has been on the new benefit for less than three months, this compares to 52 per cent in December 2014, 55 per cent in November 2014 and 60 per cent in October 2014.
There are more males on the Universal Credit caseload than females (70 per cent compared to 30 per cent).
Males aged 20-24 make up 24 per cent of the total Universal Credit caseload.
Universal Credit is replacing the following benefits:
- Income-based Jobseeker’s Allowance
- Income-related Employment and Support Allowance
- Income Support
- Working Tax Credit
- Child Tax Credit
- Housing Benefit
63,690 people have made a claim for Universal Credit up to 12th February 2015. The rate at which people are claiming continues to increase as the roll out of Universal Credit continues.
35,620 of the people who have made a claim have, up to 8th January 2015, attended an initial interview, accepted their claimant commitment, and gone on to start Universal Credit.
31,030 people were on the Universal Credit caseload, as at 8th January 2015. Of these, 10,080 (or 32 per cent) were in employment and 20,950 (or 68 per cent) were not in employment.
UK Labour Market, February 2015
- Comparing the estimates for October to December 2014 with those for July to September 2014, employment continued to rise and unemployment continued to fall. These changes maintain the general direction of movement since late 2011/early 2012.
- There were 30.90 million people in work. This was 103,000 more than for July to September 2014 and 608,000 more than for a year earlier.
- The proportion of people aged from 16 to 64 in work (the employment rate), was 73.2%, higher than for July to September 2014 (73.0%) and for a year earlier (72.0%). The employment rate last reached 73.2% in December 2004 to February 2005 and, since comparable records began in 1971, it has never been higher.
- There were 1.86 million unemployed people. This was 97,000 fewer than for July to September 2014 and 486,000 fewer than for a year earlier.
- The unemployment rate was 5.7%, lower than for July to September 2014 (6.0%) and lower than for a year earlier (7.2%). The unemployment rate is the proportion of the economically active population (those in work plus those seeking and available to work) who were unemployed.
- There were 9.05 million people aged from 16 to 64 who were out of work and not seeking or available to work (known as economically inactive). This was 22,000 more than for July to September 2014 and 6,000 more than for a year earlier.
- The proportion of people aged from 16 to 64 who were economically inactive (the inactivity rate) was 22.3%, virtually unchanged compared with July to September 2014 and with a year earlier.
- Comparing October to December 2014 with a year earlier, pay for employees in Great Britain increased by 2.1% including bonuses and by 1.7% excluding bonuses.
Source – Welfare Weekly, 18 Feb 2015
Job Centres in the region are among the first in the country to take part in the national roll out of the Government’s new Universal Credit, which began today (Monday, February 16).
Universal Credit, designed to get people into work more quickly and making it easier for them to earn more, has started in 15 areas, including Hambleton, Ryedale, Hartlepool and York.
Initially the credit, which merges six working-age benefits into one, is being rolled out only for new claims from single people who would otherwise have been eligible for jobseekers allowance, including those with existing housing benefit and working tax credit claims.
At Northallerton Job Centre today there was confusion over how it will work. One single parent, who gave her name as Julie, said she had been told nothing about it.
“It could possibly be a good idea, rather than having separate benefits and dealing with different departments,” she said.
“But I have been told nothing about this, and how it will work. I want to get back to work and I am studying at the moment so if it helps me to get back to work that’s good. But information would be a big help too.”
Another 19-year-old man who is currently claiming jobseekers allowance said he was also in the dark.
A pilot scheme has been tried out in the North-West, which the Government said had been a success
Work and Pensions Secretary Iain Duncan Smith said:
“The evidence shows that under Universal Credit, people move into work more quickly and earn more money, giving them increased financial security.
“It is very impressive that we have seen these results so soon and that this is having a real impact on people’s lives. This is a cultural change which will alter the landscape of work for a generation.”
But Labour’s shadow work and pensions secretary Rachel Reeves said no one believed the promises that the new system would work.
“Labour wants universal credit to work and we’ll call in the National Audit Office to do an immediate review of this failing programme to get a grip of the spiralling waste and delays.”
Source – Northern Echo, 16 Feb 2015
Part-time workers claiming Universal Credit face punitive in-work benefit sanctions, it has been reported today.
Universal Credit claimants in part-time employment could see their Housing Benefit slashed, if they fail to increase their working hours to 35 hours per week on the minimum wage, reports Inside Housing.
The trial, quietly introduced through secondary legislation, will affect around 15,000 new Universal credit claimants earning less than £12,000 a year.
Sanctions currently only affect unemployed people in receipt of Jobseeker’s Allowance (JSA) or Employment and Support Allowance (ESA).
If the trial is rolled out across the country, thousands of hard-working people could see their in-work benefits docked for the very first time.
> From one point of view this could be a good thing – because it will bring home to people who previously didn’t give a damn about, or even supported, benefit sanctions for the unemployed, just what is going on.
Universal Credit merges a number of existing benefits into one single monthly payment. This includes Housing Benefit, Working Tax Credit, Child Tax Credit, Income Support, JSA and ESA.
However, the Government’s flagship project has been beset by delays and problems with its IT systems. Official figures show 26,940 people were claiming Universal Credit by 11 December 2014.
The DWP is speeding up the roll-out of Universal Credit across Britain, in an apparent bid to prevent Labour from calling a halt to its introduction if they win the next general election.
> Labour could – and should – still scrap it if they win… but will they ?
Under the new mandatory pilot, which launches in April 2015, in-work Universal Credit claimants face the prospect of weekly sanctions – starting at around £29 per person.
Those affected by the trial will be offered ‘support’ from Jobcentre Plus to increase their pay and working hours. Failure to comply could result in sanctions.
> So just how do you increase your hours (unless you’re the boss) ? And its not much incentive to take a job like that if you know you’ll still be at the mercy of Jobcentre work coaches.
Source – Welfare Weekly, 11 Feb 2015
HMRC are to stop paying Working Tax Credit and Child Tax Credit to people claiming to the new Universal Credit, it has been revealed.
Previously, when people were moved to Universal Credit their tax credits accounts with the HMRC would remain open until the end of the tax year.
Tax credit payments will now form part of a households total Universal Credit award. Those who have not yet been moved (claiming) Universal Credit will continue to have their tax credits paid by the HMRC.
The changes, revealed in October’s issue of the DWP’s Touchbase magazine, come into force from this month (October) and will affect all existing and new Universal Credit claimants.
From this month, the HMRC will begin contacting affected claimants to inform them that their tax credit payments will stop, and give details on what they need to do.
The DWP say that claimants who are already getting tax credits do not need to contact the HMRC, while they wait for the changes to affect them. But they must report any changes in their circumstances as soon as possible, to ensure they receive the correct amount within the Universal Credit system.
People will be moved to Universal Credit ‘at different times’ depending on where they live, their circumstances and what benefits they are currently claiming. Work and Pensions Secretary Iain Duncan Smith recently announced plans to accelerate the roll-out of Universal Credit across the UK.
Tax credits will eventually be scrapped to form part of Universal Credit, as will a number of existing benefits including Housing Benefit and Income Support.
The HMRC is also changing the way it recovers overpaid tax credits. People who have been overpaid tax credit, largely due to HMRC blunders or accidental claimant error, may have their tax credit award reduced to repay outstanding debts. Depending upon a person’s circumstances this may include one or more previous claims.
Those affected will receive letters from the HMRC informing them of the overpayments. The amount deducted from their tax credit award could be as much as 25%. Those who have already made an arrangement to repay with the HMRC will not be affected.
Touchbase also reveals that Atos and Capita have employed more staff to increase the number of assessments they do for the new disability benefit, Personal Independence Payment (PIP).
The reports used by assessors have also been improved, claim the DWP, and changes have been made to the PIP IT system. DWP say that PIP decision-makers have doubled their output since April 2014.
They also claim that disabled people will not have to wait more than 16 weeks for a PIP assessment by the end of 2014.
The news comes after charities and politicians raised concerns over a growing PIP assessment backlog.
Source – Welfare Weekly, 13 Oct 2014
South Tyneside Council has been accused of ‘discriminating’ against the unemployed over its council tax charges.
The authority is one of the few councils in England to demand those receiving job seekers’ allowance (JSA) still pay 30% of their annual council tax bill.
All other North East councils request lower contributions, including Northumberland County Council which charges nothing to single unemployed people in receipt of JSA.
South Tyneside says it has been one of the hardest hit authorities nationally by reductions in Government funding, and although it has frozen council tax since 2010 it has been unable to keep bills low for all groups.
But Peter Watt lives in a one bedroom flat in Priory Road, Jarrow, and has been out of work for almost four months.
The 38-year-old’s annual band A bill of £967.53 is reduced by a 25% reduction for living alone and again by 70% for being unemployed, but still stands at £217.69, which he says is too high.
He said: “South Tyneside Council is about the only council I am aware of in the country that charges 30% to the unemployed – a group that cannot afford it. Neighbouring councils don’t do it so how can this one?
“They tell me they are trying to protect three groups of people – the disabled, OAPs and households with children under the age of five – and I have nothing against that but it does seem like they are discriminating against people without jobs.
“My JSA is £71.60 per week and it is there to help people seek jobs – not to bail out South Tyneside Council. I did have a job briefly but it was on a zero hours contract so I wasn’t entitled to working tax credit.
“I was being paid £200 a week and the council took £130 for the council tax and a furniture package I got with the house. I was left with £70 for bus fare, food and all my bills so I had to quit to survive.”
Mr Watt continues to search for security jobs, and has even applied to South Tyneside Council for a position.
He added: “I plan to appeal against the fees at a valuation tribunal.“I am so short on cash that when I am cold I use my sleeping bag rather than the heating, I do my cooking in the microwave or deep fat fryer because it uses less power, I don’t wash up with hot water until all my dishes are dirty, and I haven’t turned my electric fire on for two years.”
A South Tyneside Council spokesman said: “Council tax contributes to the funding the Council needs to provide vital public services.
“In 2013, South Tyneside Council introduced a Local Council Tax Support scheme to replace the Council Tax Benefit scheme which was abolished as part of the Government’s Welfare Reforms.
“The changes resulted in the Council losing more than £1.7m in Government support, a shortfall the Council had to meet while still protecting the Borough’s most vulnerable residents.
“Band A residents who are not in the protected groups, but are unemployed and live alone, currently receive up to a maximum 70% discount on their Council Tax and are required to pay £4.18 per week.
“We are, of course, concerned when residents find it difficult to pay and would urge anyone in this situation to contact us as soon as possible so that we can explore flexible repayment arrangements that take their circumstances into consideration.”
Source – Newcastle Evening Chronicle, 06 Oct 2014
When David Cameron stands up in all his hypocrisy and tells you that tearing apart the basic safety net that guaranteed people would not be left in hunger or destitution is part of his “moral mission”, even die-hard Tories should agree that the country has taken a turn for the worse.
When he defends an administration that has become so punitive that applicants who don’t get it right have to wait without food for months at a time, by claiming he is doing “what is right”, even die-hard Tories should agree that the man who claims he is Prime Minister has diverged from reality.
That is precisely what he has done, and you can bet that the Tory diehards will quietly go along with it because they think it is far better for other people to lose their lives than it is for their government to lose face.
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