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| Amber Rudd's departure from DWP is bound to be deeply destabilising | |
| (32 minutes later) | |
| Amber Rudd’s departure from the Department for Work and Pensions (DWP) brings to six the number of secretaries of state it has got through in less than four years: an alarming top job turnover rate in any organisation, but particularly destabilising in what is not only the government’s biggest spending department but one of its most politically sensitive ones. | Amber Rudd’s departure from the Department for Work and Pensions (DWP) brings to six the number of secretaries of state it has got through in less than four years: an alarming top job turnover rate in any organisation, but particularly destabilising in what is not only the government’s biggest spending department but one of its most politically sensitive ones. |
| The DWP has a budget of about £185bn a year – outstripping NHS expenditure by about £20bn and almost double what is spent on schools. Its business is paying retirement pensions, as well as disability, unemployment and housing benefits. | |
| It ought to be a staid administrative department, but thanks to a near decade of botched welfare reform and divisive benefit cuts, it has become a constant source of political controversy. | |
| Rudd’s resignation refocuses attention on these myriad problems. At their centre is the much-criticised universal credit, the DWP’s flawed but ambitious plan to digitise and streamline the sprawling benefits system. It has cost billions, proved a nightmare to implement and is six years behind schedule, while its design flaws – the notorious five-week wait for a first benefit payment, for example – have delivered chaos and misery to thousands of unlucky claimants. | Rudd’s resignation refocuses attention on these myriad problems. At their centre is the much-criticised universal credit, the DWP’s flawed but ambitious plan to digitise and streamline the sprawling benefits system. It has cost billions, proved a nightmare to implement and is six years behind schedule, while its design flaws – the notorious five-week wait for a first benefit payment, for example – have delivered chaos and misery to thousands of unlucky claimants. |
| The DWP is currently engaged in a not always successful attempt to patch up universal credit’s multiple deficiencies. | |
| It is coping with other staggering policy failures too: poorly designed and ineptly administered disability benefits – the notorious “fit for work” tests, for example, that have seen the DWP become a byword for callousness and bureaucratic cruelty. | It is coping with other staggering policy failures too: poorly designed and ineptly administered disability benefits – the notorious “fit for work” tests, for example, that have seen the DWP become a byword for callousness and bureaucratic cruelty. |
| Coming soon: the great universal credit deception | Aditya Chakrabortty | Coming soon: the great universal credit deception | Aditya Chakrabortty |
| There have been a suite of nasty policies seemingly designed to impoverish families – such as limiting benefits to the first two children. And all against the backdrop of a four-year austerity freeze on benefits, which has been the main contributor to more than £30bn being stripped from the budgets of poorer households in recent years. | |
| The failures of universal credit have been a gift to an opposition keen to show the Tories do not care about the poor. It has fuelled a never-ending stream of stories illustrating how its classic opaque, computer-says-no digital bureaucracy has driven already-struggling people into destitution and despair: the humiliation of reliance on food banks, the stress of debt and rent arrears, the looming threat of eviction. | The failures of universal credit have been a gift to an opposition keen to show the Tories do not care about the poor. It has fuelled a never-ending stream of stories illustrating how its classic opaque, computer-says-no digital bureaucracy has driven already-struggling people into destitution and despair: the humiliation of reliance on food banks, the stress of debt and rent arrears, the looming threat of eviction. |
| When Rudd arrived at the DWP, she took many by surprise. Unlike her predecessor, the abrasive Esther McVey, who was loth to admit to any shortcomings at all in the government’s flagship social security policies, Rudd straight away set a different tone. | |
| “After so many ideologues, she seemed a force for good,” said one charity campaigner. “She was a cheerleader for universal credit, but her eyes were open to its problems, she listened to other views and she had the ability to think afresh.” | |
| Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment and benefits, and tax credits) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work. | Universal credit (UC) is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment and benefits, and tax credits) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the system and increase the incentives for people to move off benefits into work. |
| The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults means it is six years behind schedule and rollout will not be complete until 2023. | The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults means it is six years behind schedule and rollout will not be complete until 2023. |
| The original design set out a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. | The original design set out a minimum 42-day wait for a first payment to claimants when they moved to UC (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears and evictions, hunger (food banks in UC areas report notable increases in referrals), use of expensive credit and mental distress. |
| Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks. | Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. Housing benefit will now continue for an extra two weeks after the start of a UC claim. However, critics say the five-week wait is still too long and want it reduced to two or three weeks. |
| Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives. | Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean UC is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move to UC, reducing work incentives. |
| Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. | Landlords are worried that the level of rent arrears accrued by tenants on UC could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. |
| And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship. | And there is concern that UC cannot deliver key promises: a critical study found it does not deliver savings, cannot prove it gets more people into work, and has plunged vulnerable claimants into hardship. |
| Straight off, she admitted that not all was well with universal credit (a departure from the standard DWP line that everything was going swimmingly). She accepted that the long wait for a first benefit payment helped drive people to food banks (unbelievably, the DWP had flatly denied this for five years). She ended the barbarous and unnecessary three-year benefit sanctions introduced by Iain Duncan Smith (though she resisted calls to end all sanctions). | |
| Campaigners point out that she was alert to the sexism and misogyny built into universal credit. She overhauled the unworkable upfront childcare payments that prevented many mothers from returning to work. | |
| She accepted (in opposition to the established DWP view) that a malfunctioning benefit system drove desperately poor women to prostitution, and agreed to a review of single household payments of universal credit that were a potential gift to abusive partners. | |
| These were not major structural changes. But Rudd at least recognised, says one observer, that “social security and universal credit is a big deal, that if you get it wrong it can end up as your poll tax”. | These were not major structural changes. But Rudd at least recognised, says one observer, that “social security and universal credit is a big deal, that if you get it wrong it can end up as your poll tax”. |
| The latest turmoil at the top does not bode well: universal credit is about to be rolled out to 3 million more people, including vulnerable claimants on employment and support allowance, and working families on tax credits. | The latest turmoil at the top does not bode well: universal credit is about to be rolled out to 3 million more people, including vulnerable claimants on employment and support allowance, and working families on tax credits. |
| Multiple dangers lie ahead: an insular, slow-moving DWP that needs careful political management but has no clear political steer. A minority government which does not see social security as one of the “people’s priorities” for public investment, despite rising poverty and growing destitution. A long period of Brexit-related political turbulence preventing any serious reform of social security. The outlook is not sunny. | |
| Amber Rudd | Amber Rudd |
| Universal credit | Universal credit |
| Pensions | Pensions |
| Esther McVey | Esther McVey |
| Iain Duncan Smith | Iain Duncan Smith |
| Benefits | Benefits |
| analysis | analysis |
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