'Reboot' universal credit, ministers urged
http://www.bbc.co.uk/news/education-33047010 Version 0 of 1. Hundreds of thousands more women would be helped into work if the government "rebooted" its flagship welfare reforms, suggests a think tank report. The Resolution Foundation study supports the principles of universal credit (UC) but calls for far-reaching changes to address "flaws". Suggestions include allowing second earners to retain more of their benefits when they start work. The government said universal credit was helping claimants into work faster. The report follows a nine-month review by the think tank. 'Rudderless tanker' It says that with significant numbers of families due to start claiming UC next year, the start of a new Parliament provides a "perfect opportunity to reflect" on its design. "Failure to revisit and revise policies now... would represent a missed window of opportunity that may not present itself again once the system becomes fully bedded in," it says. The introduction of universal credit began under the coalition government, driven by Work and Pensions Secretary Iain Duncan-Smith. It has, however, been beset by difficulties and "remains a monumental challenge for the newly elected government", according to report chairman Nick Timmins. "For much of its life, it has looked like a rudderless tanker heading for the rocks," writes Mr Timmins in his foreword. Mr Timmins says the report's aim is to suggest updates and reforms to allow UC to cope with changing economic conditions and balance the needs of tax payers and claimants. The authors welcome the stronger incentives to work provided by UC's "work allowances", which allow people to retain their full benefit entitlements as they enter work and earn up to a certain level. But they say some second earners on low incomes will lose out. For example, they calculate, a second earner starting work on an annual salary of £10,600 would see their disposable income rise by £3,600 under UC, considerably lower than the £6,000 rise under the current system. They therefore recommend adding a new "work allowance" to allow second earners to keep more of their benefits, increasing disposable income in this case to £7,000 a year. They also recommend: The report also urges greater efforts to make the system more user-friendly and less bureaucratic. Overall, the authors say, their suggestions could help between 180,000 and 460,000 more people into work. Working poor But, they argue, with nearly two-thirds of poor families already having someone in work, UC should focus more on helping them escape low pay. David Finch, a senior analyst at Resolution Foundation, said that while UC had "many advantages" over the current system, "it hasn't caught up with big changes in the UK's labour market, such as rising in-work poverty". He said: "The government's flagship welfare reform programme needs a reboot so that it can deal with the big labour market challenges of the next decade and beyond, such as helping people escape low pay, rather than trying to tackle the problems of the past." A Department for Work and Pensions spokesman said research showed UC was effective. "Universal credit is simplifying the welfare system to make work pay, and research shows that it's getting claimants back into work faster and helping them earn more," he said. "Our reforms under UC also make it easier to start work if you're a parent, with increased help towards registered childcare costs, no matter how many hours you work. "When fully rolled out, universal credit will make three million people better off, with a £7bn boost to the economy every year." |