Universal credit ‘in danger of failing to deliver’

The new universal credit system risks failing to deliver on its key objectives, according to a joint report from the TUC and the Child Poverty Action Group. Nine out of ten families, it estimates, will gain nothing following the new system's introduction.

Key points

  • Taken in isolation, universal credit is a 'real advance' on the current social security system. Claimants will deal with one rather than multiple agencies, and face a much simpler claims process. They will also have a much clearer idea how much they stand to gain from finding paid work.
  • But the generosity of universal credit has often been overstated by government ministers. Many of those households who do stand to gain from its introduction will see any benefits offset by recent social security cuts, such as the annual benefits cap and the limit on uprating. As a result only 10 per cent of families will see a net gain. Incomes will actually fall for around half of households, compared with what they would have received under the benefit and tax credit system the coalition government inherited.
  • In addition, there are weaknesses in the universal credit model itself. Many complexities and disincentives will remain that need to be addressed before national roll-out of the new system begins in October 2013.
  • In particular, there should be a second earner disregard to ensure that non-earning members of a couple have the same work incentives as primary earners. And support for childcare should be increased from 70 per cent to at least 80 per cent of costs for all, thereby going some way to reduce the barriers to employment for parents.

Source: Lindsay Judge, Will Universal Credit Work?, Trades Union Congress and Child Poverty Action Group
Links: Report | TUC press release | Public Finance report


Publication date: 
May 11 2013