The Department of Work and Pensions has announced that Melton will be one of fifteen local authorities who will trial the Universal Credit. In the press release the Minister for Welfare Reform Lord Freud said “Local authority led pilots will provide a unique opportunity for councils to shape the development of Universal Credit.” And that “all the recommended local authorities offer very exciting ideas on how they might help people with their claims for Universal Credit and progress into work.”
The aim of the Universal Credit is to reduce the complexity and cost of administering a range of different social benefits between national and local government agencies. At present benefits are claimed from government for Job Seekers Allowance, but Housing Benefit from the local council.
However, critics argue that the introduction of a national IT system to administer all benefits will drive up costs and become much more complex. John Seddon started a petition in August 2011 calling for “Iain Duncan Smith to ‘rethink the centralised, IT- dominated service design for the delivery of Universal Credit. Evidence from a significant number of housing benefit offices demonstrates that local, face-to-face processing of benefits is cheaper and faster than distant automated telephone and online processing.”
The new system means that local councils will have to administer the benefits systems from their own budgets, based on local rules they set themselves. Tom Clark, writing in The Guardian, points out that “ministers came up with a cost-cutting wheeze to lump council tax rebates outside the new system, and ask every town hall to devise their own rules.”
The Telegraph reported as recently as 13th July 2012 that the “technology underpinning the Universal Credit – the Government’s answer to simplifying the benefits system – has been rushed through in an attempt unveil the new welfare plans by 2013.” According to the report “the All Party Group on Taxation found that the Universal Credit, a single payment intended to replace several different benefits, is reliant on a new HMRC up-to-date “real time” information to track earnings.”
Little is known about how this trial will be conducted in Melton, what will happen to people who are affected by the changes it brings, and what difference it will make to the overall budget of Melton Borough Council.
Rob Watson, Rutland & Melton Labour’s on-line campaign spokesman said “While it is agreed that changes to the benefits systems are easier to bring in when unemployment is falling, the trend in long-term unemployment is continuing to rise. Little is known about how the Universal Credit system will impact on families and households who have a mixture of benefits and low-paid work. The lack of social housing has driven-up the housing benefit bill, with money going direct to private landlords. It is unclear how this system will work and why Melton has been selected as a test-bed.”