Autumn Budget 2017: Universal credit wait cut to five weeks

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Chancellor Philip Hammond acknowledged concerns about the rollout of universal credit in his speech today.

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There has been widespread concern that delays to universal credit are pushing families into debt

Recognising that there had been ‘genuine concerns about the operational delivery [of universal credit] on both sides of the House’, the Chancellor axed ‘a seven-day waiting period applied at the beginning of a benefit claim so that entitlement to universal credit will start on the day of the claim.

'We have looked at reducing the delay at the end of the first month assessment period. But to do so would mean compromising the principle of payments being made on the same day of the month. A key feature of the system which is very important for claimants in managing their budgets. So to provide greater support during the waiting period we will change the advances system to ensure that any household that needs it can access a full month’s payment within five days of applying.

‘We will make it possible to apply for an advance online. And we will extend the repayment period for advances from 6 months to 12 months. Any new universal credit claimant in receipt of housing benefit, will continue to receive it for two weeks. This is a £1.5bn package to address concerns about the delivery of the benefit.’

The red book, published after the speech, also reveals that the rollout of universal credit is being slowed down.

‘To support these changes the Government will roll out universal credit more gradually between February 2018 and April 2018, and roll-out to all jobcentres will be complete in December 2018.’

Commenting, chief executive of Child Poverty Action Group Alison Garnham said, ‘We were the first to sound the alarm over the waiting days for universal credit, so we’re pleased the Chancellor has acted to remove them and put in place new arrangements for receiving advances as part of an emergency rescue package, but this should have been the budget that ushered in much needed structural reform of Universal Credit to revive the central promise to strengthen the rewards from work and that didn’t happen.  

‘Our new analysis finds while effective tax rates may have improved for some families, big falls in family income caused by cuts and changes to universal credit have left many worse off overall, overwhelming any gains from increases in the national living wage, personal tax allowances and help for childcare. Families on universal credit who want to get better off through earnings gained little from today’s budget. 


‘What happens to universal credit will shape the future for children in low-income and just managing families. The budgets of ordinary families will not be fit for the future until the work allowances in universal credit have been restored to support parents who want to bring home higher wages.’

The Children's Society said that the changes did not go far enough.

Chief executive Matthew Reed, said, ‘The six week waiting period for universal credit has been plunging families into hunger, destitution and problem debt. Cutting this by a week and extending advance payments – which immediately get families into debt – simply does not go far enough and it will leave too many parents desperately trying to find a way to feed their children and pay for other essentials. 


‘We believe that the longest anyone should have to wait to receive their entitlement to universal credit is two weeks and that, from then on, claimants should get payments weekly if that’s what they want.

‘In his speech, the Chancellor said that the Government was introducing universal credit to ensure that “work always pays”, but  the Government’s proposal to remove entitlement to Free School Meals from those earning over £7,400 per year tears this promise to shreds.

‘Not only is this a missed opportunity to ensure that the hundreds of thousands of children living in poverty in working families get a free school meal, but it will also create a huge disincentive for families earning just under to this threshold to take on extra hours, destroying the main reason for introducing universal credit in the first place.’


Children’s services

Mr Reed added, ‘Local children’s services are reaching breaking point, leaving more and more children with nowhere to turn when they need help. The amount of central government funding provided each year for council children’s services has been cut by £2.4bn since 2010, with more cuts to come. With nothing in today’s budget to address this, we are deeply concerned about the consequences for some of society’s most vulnerable children in the face of such a huge funding gap.’


 
Eleanor Briggs, head of policy and research at Action for Children, said, ‘Children up and down the country are missing out on the help they and their families need, but we heard nothing in today’s budget that indicates help may be on the way.
 
‘We know the gap between demand and resource for children’s services is growing. Since 2010, funding has fallen by £2.4 billion while the number of child protection investigations has more than doubled. Failing to invest in early help and prevention services will only see this situation get worse, costing the Government even more in the long run.
 
‘But today there was silence on this situation when what we needed to see was action. If the Government is to deliver effective help for children and families, ministers must take the lead and ensure councils receive the funding they need to invest in early help and stop problems escalating to crisis point.’

Anna Feuchtwang, chief executive of the National Children’s Bureau, said Philip Hammond had ‘shown little concern for the plight of the nation’s children. In his budget speech, the chancellor only directly mentioned children once, aside from setting out additional support for school pupils in Maths and IT. This sends the clear message that if you aren’t a potential voter, the Government won’t make your welfare a priority.’

‘Councils across the country are facing increasing demand for children’s social care, yet the government has ignored their warnings and done nothing to inject funding into services already cut to the bone. Four in ten of the local councillors responsible for providing children’s social care say that a lack of resources is preventing them from fulfilling their statutory duties to children, including those at considerable risk of harm and abuse. ‘We should be stepping in early to help these children and families, but this budget will force councils to provide social care on an emergency basis only.’
 
‘The Chancellor has pledged reforms to universal credit and tax thresholds but these will not prevent us hitting record levels of children in poverty in the next five years. In particular, this budget did not address the devestating impact of benefit cuts on the families of disabled children, many of whom are struggling to make ends meet.’
 
‘While schools will welcome additional money for maths and IT, we know that pastoral support is being cut as schools struggle with falling budgets. Children with mental health issues, those going to school hungry and those at risk of abuse and neglect have fundamental barriers to their education that funding for academic learning does nothing to address.’

Councillor Richard Watts, chair of the Local Government Association’s Children and Young People Board, said, it was ‘extremely disappointing’ that the budget had not provided any extra funding for children’s services and warned that councils had reached ‘a tipping point’.
 
“The Government has been warned repeatedly that ongoing funding cuts have left councils struggling to provide the support that vulnerable children and families need, with major charities and independent experts joining the LGA’s call for additional resources to be provided urgently to help keep children safe.
 
'This vital service is rapidly becoming unsustainable. A further £2 billion funding gap will have opened up in just over two years’ time, and this gap is likely to grow even larger unless immediate action is taken to address the growing demand for child protection services.
 
'Last year, 90 children entered care every single day. It was the biggest annual increase witnessed since 2013. This has to be a wake up call to government that unless there is an injection of funding to support crucial early intervention services, many more vulnerable children and families will need formal support from council child protection services in the years to come.
 
‘Last year, 75 per cent of councils were forced to overspend their budgets by millions to ensure children at immediate risk of harm were protected. We’ve reached a tipping point where this service can no longer be ignored. It is absolutely crucial that the forthcoming Local Government Finance Settlement addresses this funding gap.'

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