DWP's response to the coronavirus outbreak

DWP should be commended for its rapid response to an unprecedented increase in claims. In particular, the extraordinary work of its front-line staff, whose efforts have led to most claimants receiving their first payment on time, deserves the highest praise.

The surge of new claims following lockdown highlighted some of the existing flaws in the identity verification process. The changes DWP has made to the application process in response to the outbreak—particularly allowing the use of Government Gateway accounts for identity verification—are very welcome. We remain concerned, however, that the online application process continues to be difficult to navigate for people who lack digital literacy, especially people in vulnerable groups. The Department should continue to allow claimants to use their Government Gateway accounts to verify their identity once the lockdown has ended. It should also use this as an opportunity to reflect on what other changes to the process are needed, with a particular focus on the needs of people who are vulnerable and digitally excluded. The Department should continue to allow claimants to use their Government Gateway accounts to verify their identity once the lockdown has ended. It should also use this as an opportunity to reflect on what other changes to the process are needed, with a particular focus on the needs of people who are vulnerable and digitally excluded.

We welcome the fact that 93 per cent of new claimants from 16 March received their first payment on time: a substantial improvement on the previous average. That means, however, that around 7 per cent of new claimants—more than 200,000 people—are still receiving their first payment late. The challenge for DWP now is to improve on these high standards while not compromising on the accuracy of payments. The large numbers of staff deployed to front line posts has undoubtedly contributed to the improvements in timeliness, but this will not be sustainable beyond the short term. The Department should now set out how it intends to improve on, or at the very least maintain, these standards of payment timeliness in ‘normal’ times, with fewer staff in front line roles.

The baked-in wait for a first payment in Universal Credit means that some claimants take out an Advance in order to make ends meet, which must then be paid back within 12 months. These repayments are creating additional hardship at a time when many households are already struggling to get by. We commend DWP’s decision to suspend repayments of other debts, which recognises that these repayments were causing undue hardship. But this will not offer much comfort to the thousands of Universal Credit claimants who are still facing substantial deductions every month to repay Advances. We recommend that DWP assesses and reports on the impact of its temporary suspension of some debt repayments, including the total value of deductions that have been suspended and the impact on households who have been affected by this decision.

We were astonished to hear that the Universal Credit system has been built in a way that makes it all but impossible for repayments of Advances to be suspended in a crisis situation. We recommend that DWP review the Advances system and consider what changes are needed to make it more flexible, so that in times of crisis like these it can react quickly to meet claimants’ needs.

Making a new Universal Credit claim has worked well for huge numbers of people since the start of the coronavirus outbreak. But it has been detrimental for some people moving from legacy benefits, who have inadvertently left themselves worse off as a result—and, in some cases, with no support from the benefits system at all. Encouraged by Government guidance, they made claims for Universal Credit in good faith, only to find themselves trapped in a bureaucratic lobster pot, unable to return to their pre-existing benefits. Worse still, they are also stripped of any entitlement they might have had to transitional protection if they had moved to Universal Credit in future.

We cannot believe that the Government intended that any of this should happen, and the Secretary of State’s commitment to solving this problem is welcome. But it is now nearly two months since MPs began raising this issue on behalf of their constituents, and the time for action is long overdue.

We recommend that the Government urgently take steps to return to their pre-existing benefits, or the equivalent financial position, anyone who has inadvertently left themselves worse off by making a claim for Universal Credit during the coronavirus outbreak. It should also restore their entitlement to transitional protection for any future move to Universal Credit by managed migration.

It was right that the Department, in the initial phase of the crisis, focussed on increasing the rates of Universal Credit and Working Tax Credit. Those changes could be made relatively easily and enabled the Government to get support quickly to millions of people. But that does not mean that the Government should simply ignore the needs of those people who are claiming—through no fault of their own— benefits which rely on outdated and complex administrative systems. Those benefits include support for disabled people, people with health conditions, for carers, and for people with children. Even if it takes the Department several months to make the changes, that would still be better than offering no additional support at all.

We recommend that, now that the initial surge of Universal Credit claims has mostly been handled, the Department should immediately seek to increase the rates of relevant legacy benefits by the equivalent amount. This increase should be backdated to April 2020, as recommended by the independent Social Security Advisory Committee.

People will be claiming legacy benefits until at least September 2024, the Government’s most recent estimate for completing the rollout of Universal Credit. It is simply not tenable for the Department to continue to operate antiquated systems that prevent Ministers from making timely changes to the rates at which legacy benefits are paid. We recommend that the Department work to increase the speed with which changes can be made to legacy benefit rates.

As a result of the no recourse to public funds condition, many hardworking and law- abiding people are being left without a social safety net and at risk of destitution and homelessness. Although there is no official estimate of the number of people with NRPF, it is likely that the number exceeds 1 million and includes at least 100,000 children. In the midst of a pandemic, the condition leaves people with an invidious choice: stay at home and face hardship, or go to work and risk catching or spreading coronavirus.

We appreciate that, in normal times, applying visa conditions which require people to support themselves financially without being a burden on the state may be a reasonable policy approach. But during a pandemic it cannot be in the public interest to expect people, some of whom are key workers and front-line medical staff, to comply fully with restrictive public health guidance while simultaneously denying them full access to the welfare safety net. Ministers have been telling us for months that they are working on this issue. The Prime Minister himself has promised to see what can be done. But people need support now. In these exceptional circumstances, the Government should immediately suspend NRPF conditions on public health grounds for the duration of the outbreak. Following the various ministerial commitments in the House, the Government should also set out exactly what measures it has taken so far to support people with NRPF, and include details of any ministerial implementation groups or other fora that have been set up to consider this issue.

We cannot understand why the Government does not appear to hold any reliable data on the number of people with NRPF. Without publicly available data, it is difficult to assess how many people are subject to this condition and to determine what support they need. In line with the Prime Minister’s commitment at the Liaison Committee, the Government should collect and publish data on how many people have no recourse to public funds, including an estimate of how many people cannot access public funds because their immigration status is precarious. Given the evidence suggesting that people with NRPF face challenges in accessing accommodation, the Government should also publish an estimate of how many people in this group are homeless.

There is a lack of clarity surrounding what local authority support people with NRPF can access. DWP have told us that the £500 million hardship fund is not listed as a public fund. As noted by organisations who work with people with NRPF, however, some local authorities are not sure about what support they can provide, resulting in inconsistent levels of support across different areas. The Government should publish or at least clarify existing guidance for local authorities on what support they can provide for people with NRPF, including an explicit statement of whether measures such as the hardship fund are classed as public funds or not. The guidance should also state clearly whether local authorities are expected to use existing funding to support people with NRPF, or whether they can reclaim costs at a later date.

We welcome the Prime Minister’s clarification that people with NRPF who have lost income can access support through the CJRS and SEISS, the Government’s schemes for employed and self-employed people (respectively). We encourage the Government to make a renewed attempt to publicise this, so that people with NRPF who are facing loss of income are aware that they can access this vital support.

The Chancellor’s decision to increase Universal Credit payments by £20 a week and to increase LHA rates to the 30th percentile of local market rates is very welcome. But some households will not be able to benefit from these increases. This is because, as a result of the uplifts, they will be hit by the benefit cap. The Child Poverty Action Group Estimates that some 12,500 more families will be affected by the benefit cap because of the increase in the standard allowance, and many more because of the increase in LHA. This comes at a time where many households are seeing increases in costs and decreases in income, and at which opportunities to avoid the cap—by moving house, increasing hours of work or starting a new job—are severely limited by the pandemic.

The Department told us that it expects the numbers of people affected by this problem to be “very small”. It based this claim on pre-crisis, pre-uplift trends in benefit cap data. While it is helpful that the Department collects and uses this data, it seems to have little bearing on the current, exceptional situation. We recommend that the Department publish the details of how it arrived at this assessment.

We recommend that the Department carry out a full analysis of the numbers and characteristics of households which will be newly subject to the cap as a result of measures taken during the Coronavirus crisis. The Department should also assess the impact of the cap on the financial resilience and likelihood of hardship experienced by these claimants.

For some, the combination of benefit increases and the cap may actually result in them being worse off, because it increases the amount of deductions that the Department can take from their benefits. We are sure this cannot have been the Department’s intention. We recommend that the Department take steps to ensure that the benefit cap, in combination with increase to benefit rates, does not leave households worse off than they were before the crisis.

Medical professionals are facing unprecedented strain during this pandemic. At the same time, lockdown conditions have left people without their usual support, making it harder for them to navigate health assessments alone and to obtain the medical evidence they need to support their claim. The Department clearly recognises both problems: but front line experiences suggests that there may be a gap between Ministers’ expectations and reality on the ground. We recommend that DWP communicate clearly to its own staff and to its contractors that they should take a proportionate and flexible approach to evidence, which demonstrates the appropriate level of trust in claimants, recognising how difficult it may be for claimants to access medical evidence and appropriate support. We recommend that the Department collaborates with the NHS and relevant professional bodies to ensure that healthcare staff can provide claimants with the evidence they need, while ensuring this does not put undue strain on medical professionals.

The Department has made significant changes to support new claimants to access the benefits system. However, we have heard from respected charities and support organisations that people who started their claim before coronavirus are facing substantial delays. The Department has given us no clear answers about the extent to which this is happening. In fact, it has not even acknowledged the concerns. We recommend that the Department investigate reports of significant delays faced by people whose claims began before the coronavirus outbreak, and publish its findings. It should also monitor and publish data on the time taken to process these claims, on an ongoing basis.

In January 2020, a third of PIP claimants and half of ESA claimants who challenged the DWP through a Mandatory Reconsideration had the decision changed in their favour. Between April 2013 and September 2019, two thirds of PIP and ESA decisions that were taken to a tribunal were overturned in favour of the claimant. That means that, for the majority of people who appeal, they have to spend weeks living on far less support than they are entitled to. Delays in the appeals process were already unacceptably long before coronavirus, and the pandemic has only exacerbated them. For people who do reach a tribunal, remote hearings make it harder than ever for them to put their case forward. We recommend that the Department assesses the impact that the coronavirus outbreak has had on the length of time taken by the Mandatory Reconsideration and appeals processes. In light of the evidence of increased delays, we recommend that the Department pay people who are appealing a PIP decision an assessment rate, as they do for ESA claimants.

People who have had to go to tribunal to establish that they are entitled to PIP have already gone through a stressful and difficult process. For some of them, those difficulties have been compounded by DWP’s initial refusal to extend some awards made by tribunal. The Department says that this problem has now been resolved. We encourage Ministers to continue to engage with support organisations to ensure that, in practice, people are not facing difficulties in having their PIP awards extended.

The Department has told us that the time taken to process new claims has reduced since the outbreak. That is welcome in principle. But we also know that significantly fewer people have made claims for Personal Independence Payment. The reasons for that are not yet clear, but it may suggest that people are being deterred from making new claims and may be going without the support they need as a result. We recommend that the Department investigate why the number of claims for PIP has fallen so dramatically, and take steps to identify and address any barriers to claiming.

We know that offering claimants the option of recording assessments improves trust in the system, and leads to fairer decision-making with fewer appeals. Many expert organisations, and our predecessor Committee, have been calling for audio- recording of assessments for some time. The Minister’s enthusiasm for this policy is welcome—but it is now time that the Department’s contractors got on with delivering it. We recommend that the Department work with its contractors as a matter of urgency to offer audio-recording of assessments by default, subject to the claimant’s consent, no later than September 2020.

We were disappointed to hear that the Department has made very little progress on the accessibility of its communications since our predecessor Committee’s inquiry in 2018. It is unacceptable at any time for the Department to fail to provide accessible communications to disabled people. But at a time when many people cannot access support in person, it is all the more important that the Department should be recording and meeting people’s communication needs. We were grateful for the Permanent Secretary’s assurance that this would happen—but the Department’s past performance does not fill us with confidence. We recommend that the Department set out, in response to this report, the steps it has taken—and any future plans it has, with dates by which it expects work to be complete—to ensure that its communications with disabled people take account of their communication needs.

Concerns about face-to-face assessments for PIP and ESA are not new. The necessity of suspending those assessments during the coronavirus outbreak offers the opportunity for DWP to “test and learn” from new approaches which might work better for some claimants. We recommend that DWP considers whether any of the changes made to the assessment process in response to coronavirus could usefully be made permanent, for some or all claimants.

Being diagnosed with a terminal illness is already difficult and distressing—not only for the person themselves, but also for their loved ones. The benefits system should support people in that situation, not exacerbate their distress. Nor should it place unreasonable burdens on medical professionals at any time, still less during a pandemic. But we have heard evidence that DWP’s guidance to terminally ill people, support organisations, and clinicians has been unclear and confusing. That must change.

We welcome the Minister’s assurances that the Department is taking a sympathetic approach to claims made under the Special Rules for Terminal Illness, and that there is no requirement to provide a DS1500 form. That message has not yet been communicated effectively. We recommend that the Department publish clear guidance for claims made under the Special Rules for Terminal Illness, including the fact that a DS1500 form is not required. It should also make clear, including on its own website, what alternative forms of evidence DWP would accept.

We were disappointed that the Department was not able to confirm to us how quickly claims made under the Special Rules for Terminal Illness are being processed. We recommend that the Department publish the average processing times, by month, for claims made under the Special Rules for Terminal Illness.

Concerns about how well the Special Rules for Terminal Illness are working are not new. The Department has been conducting a review since July 2019 and we look forward to seeing its results soon. We expect to return to this issue, and in particular to seek the views of medical professionals, in our future work on health assessments in the benefits system.

Many self-employed people have been hit hard by the coronavirus pandemic. Some, but not all, will be entitled to support from the Government’s Self-Employed Income Support Scheme. Even those who are entitled to support under that scheme have had to wait several months for payment. As a result, increasing numbers of self- employed people are turning to Universal Credit for support—often for the first time.

The temporary suspension of the Minimum Income Floor is a welcome indication that the Government has recognised the problems it can cause for self-employed people, especially those with volatile monthly incomes. We recommend that, before the Minimum Income Floor is reintroduced, DWP should publish a review of the operation of the MIF and the impact it has had on self-employed Universal Credit claimants.

Even with the temporary suspension of the Minimum Income Floor, self- employed people still need to grapple with some of Universal Credit’s other rules. Even experienced advisers have at times found it difficult to navigate some of the complexities. As a result, some people may have missed out on support to which they were entitled. The Government will also recognise that many self- employed people have not received any Government financial support from either Universal Credit or the various coronavirus grant or loan schemes. The Treasury Committee has estimated that more than a million people have missed out on government support during the pandemic. We recommend that DWP enhance its communications to self-employed claimants, to ensure that self-employed people, and organisations giving advice, understand its policies clearly. The Department should also work closely with advice organisations to monitor how well self-employed people understand their entitlement to benefits and whether other problems of eligibility are arising. It should also work with other Government Departments, and with the devolved administrations, to ensure that people who claimed Universal Credit in the early stages of the pandemic do not lose out from support schemes which were made available later and which they could not have foreseen.

The impact of coronavirus has been felt acutely by people in precarious and low paid work. It is inevitable that some of them will have found themselves ineligible for both the Coronavirus Job Retention Scheme and the Self-Employed Income Support Scheme. The impact of coronavirus makes it even more important than ever before to clarify the law on employment status, to protect people’s rights at work. We recommend that the Government bring forward the Employment Bill for parliamentary scrutiny as soon as possible, to increase the legal protection available to people in low-paid work and the gig economy.

The coronavirus pandemic has affected the whole country. But it has not affected everyone equally. People whose incomes were already precarious or low have found themselves tipped over the edge. Disabled people, women, families with children and people living in already disadvantaged areas have all been disproportionately affected.

The Department’s role in processing benefit claims has, understandably, taken centre stage. But its Ministers also have wide responsibilities for addressing poverty, for the Government’s strategy on disability issues, and for delivering support through the benefits system for disadvantaged groups. It must be able to demonstrate that its response to the coronavirus pandemic is contributing to those aims.

We recommend that-the Government commission an independent analysis and assessment of the impact of the coronavirus outbreak on levels of poverty and household debt. This should include an assessment of the impact on: • groups with protected characteristics under the Equality Act 2010; • different regions of the UK; • different employment statuses, including people on zero hours contracts and the self-employed. This work should include an analysis of the impact of the measures that DWP has taken so far, and of the likely impact of its future plans. It should address not only the impact on individuals and households, but also on local authorities and the voluntary sector.

We recommend that the Department monitor and publish data on job losses amongst people with protected characteristics, with a particular focus on disabled people. We also recommend that the Department launch a publicity campaign aimed at workers and employers, particularly emphasising how Access to Work can be used to support flexible working for disabled people.

We were surprised to hear that none of the staff who process Universal Credit claims were able to work remotely before the coronavirus pandemic started. In normal times, remote working can be particularly beneficial for disabled people and for people with caring responsibilities. In the current crisis, it can be essential to providing a safe working environment. We recommend that DWP continue its efforts to increase the number of its staff, especially frontline staff, who can work remotely. It should also set out a plan for continuing to offer remote work as an option for staff even after the provision of face-to-face services can resume.

As the Department begins to plan for re-opening Jobcentres, it is essential that the safety of its staff is a priority. We recommend that the Department, in response to this report, set out its plans for managing a return to offering face-to-face services while ensuring the safety of claimants and its own staff.

We commend the remarkable work DWP staff have done to provide essential financial support to millions of people. Alongside an unprecedented increased in their workload, DWP staff have coped with a major logistical shift to remote working, and with significant changes to already complicated policy. Ministers have rightly spoken warmly of this contribution. In our view, however, DWP’s frontline staff deserve some more concrete recognition. We urge the Department to set out, in response to this report, its plans for recognising and rewarding the extraordinary work done by its staff. We note the request made by the PCS union for a pay increase.

HSE has received thousands of concerns from people concerned about safety at work during the pandemic. It has required just one business to close. It has not, however, inspected a single care home since 10 March 2020. Without records of the number of businesses that have closed voluntarily after an intervention by HSE, it is impossible to get a clear picture of the impact its work has had. We recommend that HSE consider how it could improve the detail and transparency of its reporting, to send a clear message to the public that raising concerns with HSE does result in action against employers where necessary.

The Prime Minister has made clear that spot checks will play an important role in making sure people are safe at work during the pandemic. It is less clear, however, how many spot checks will be required, how the employers subject to a spot check will be selected, whether and how HSE is expecting to work with local authorities on spot checks, or how HSE and local authorities will be able to increase the volume of spot checks conducted after a long period of performing a reduced number of checks.

We recommend that HSE sets, or is set by central government or DWP, specific targets for the number of spot checks it will complete to see whether people are being kept safe at work, and whether risk assessments are in place and are appropriate. The volume and results of these spot checks should be publicly available, and it should be made clear what risk considerations were used to determine the businesses subject to these checks. Clarity should also be provided on the role local authorities will play in spot checks, and the types of businesses on which local authorities can perform spot checks.

The Health and Safety Executive has seen a 9.4% fall in its taxpayer funding since 2015 16, with knock on effects for the amount of money it can spend keeping people safe at work. Even before the coronavirus pandemic, it was having to make important – decisions on prioritisation of expenditure, and it has now seen a substantial increase in its workload. The Government’s provision of extra funding is welcome, but it is likely only to be a sticking plaster. What is needed is a clear medium- and long-term plan for future funding of the HSE.

We recommend that the Department for Work and Pensions and the Health and Safety Executive (HSE) clarify and publicise the role that the HSE will play in keeping workers safe during the pandemic, whether through employer spot checks, involvement in the risk assessment process, or any other responsibilities. The Department and the HSE should then establish the level of funding HSE needs to implement this new and future inspection regimes, and make sure that it receives that funding. The level of future funding needed by HSE should be reassessed at regular intervals.

HSE concedes that the number of occupational deaths it has recorded through RIDDOR reporting is likely to be significantly lower than the reality, particularly in NHS settings. We are not persuaded that its efforts to tackle under-reporting have gone far enough or fast enough. In early June, it was still working on new guidance.

We recommend that the Health and Safety Executive (HSE) quickly adopts a more proactive response to ensuring that the risks and deaths linked to workplace coronavirus exposure are properly recorded by care homes, NHS bodies, and other workplaces where there is a high risk of exposure to the virus.

We were also concerned to hear that workplace safety concerns raised with HSE and with local authorities are not being formally compiled into a single dataset. Doing so could assist the Government in ensuring people are going back to work in a way that is as safe as possible. We also recommend that HSE and local authorities should consult and consider ways in which their relationship could be strengthened, and in particular how their more knowledge and information could be shared more consistently and comprehensively.

Businesses and their staff have been under immense pressure in recent months, and the continuing need to pay pension contributions must feel like an additional burden. The flexible approach taken by the Pensions Regulator seems to strike the right balance: acknowledging the difficulties faced by many employers, while protecting pension savers as far as possible at a time when market conditions mean that contributions are particularly valuable.

It remains to be seen how well this approach works in practice. It may be that some conscientious employers, whose businesses and employees might benefit from a temporary pause in pension contributions, feel reluctant to rely on an assurance from the Regulator that it will not enforce the requirements. We recommend that the Pensions Regulator communicate its expectations clearly to all employers, especially smaller businesses, which may find it harder to make use of the short-term flexibility. We will be monitoring the impact of the Pensions Regulator’s approach over the coming months, and in particular how well it is working for small businesses.

Employees cannot legally be encouraged by their employer to opt out of their pension contributions, but many people may opt out voluntarily if their incomes fall because of the pandemic. We recommend that the Pensions Regulator consider whether employees who do opt-out during the pandemic should be helped to re- enrol earlier than would happen normally under auto-enrolment. We recommend that the Pensions Regulator consider whether employees who do opt-out during the pandemic should be helped to re-enrol earlier than would happen normally under auto-enrolment.

A solvent employer is the best way to fund a defined benefit pension scheme. We therefore support the more lenient approach taken by the Pensions Regulator during the pandemic to employers seeking to reduce deficit reduction payments for defined benefit pension schemes. Nevertheless, following our predecessor Committees’ experience with BHS and Carillion, the Pensions Regulator must remain alert to the risk of unscrupulous employers not in financial difficulty seeking to take advantage.

If an employer is making deficit reduction contributions at a lower rate because of the pandemic, no reasonable person would expect them simultaneously to be paying dividends to shareholders and bonuses to senior executives. We recognise that there may be a small number of exceptions to this, but we would expect them to be wholly exceptional. We urge the Pensions Regulator to keep a close eye on this area, and to raise the alarm if it detects abuse.

We welcome the apparent alertness that the Pensions Regulator, the Money and Pensions Service, and the Financial Conduct Authority have shown to the increased risk of pension scams. They have tried proactively to warn pension savers about the risks they face. But, in a period of many competing messages from public bodies, we are concerned that their messages may not reach enough of the people who are vulnerable to scams. We urge the regulators to work together to monitor the effectiveness and reach of their communications. We urge the regulators to work together to monitor the effectiveness and reach of their communications.

This focus on preventative warnings is both necessary and welcome. But the fact remains that some people will, sadly, fall victim to scammers. In most cases, they are unlikely ever to recover the money they have lost. We intend to undertake detailed work on pension scams in the near future.

The Secretary of State has not provided any persuasive reason for her refusal to share the Department’s economic downturn plan and its pandemic flu plan with the Committee. In our view, this falls short of the open and constructive engagement which Government departments ought to offer to select committees. We reiterate our request that the Secretary of State share these plans with us so that we can scrutinise them.

The Department for Work and Pensions faces a major challenge as it prepares to support a significant increase in unemployed people after years of record employment levels. A one-size-fits-all approach is not likely to be effective at getting people quickly into meaningful work. The Department will need to work particularly hard to engage those choosing not to claim benefits or rely on other forms of Government support.

A range of groups will be affected differently by the coronavirus pandemic. We urge the Department to tailor its employment support to meet the differing needs of these groups, with a particular focus on: young people, people with caring responsibilities, older workers, disabled people and people previously on lower pay.

We support the Prime Minister’s intention to deliver an apprenticeships guarantee as part of the Covid-19 jobs response. Large scale employment programmes need planning well in advanced before they can be effectively operational. We recommend that DWP outline its planned employment programmes, including any jobs guarantee, to deal with a possible major economic downturn caused by Covid-19 before the summer recess.

The Flexible Support Fund is an existing framework which can be used to put the right provisions in place quickly. For many years, however, it has been underused, and smaller providers have found it difficult to access. We recommend that the DWP consider using the Flexible Support Fund to significantly upscale its provision and, in the short-term, provide additional guidance to Jobcentres on how the FSF can be most effectively be used. The Department should work with stakeholders to understand and address the barriers that have prevented effective use of the FSF in the recent past.

DWP already works with a range of organisations to provide employment support and the response to coronavirus should be no different. Central Government cannot provide the response on its own. We recommend that DWP publish a short strategy statement setting out how it intends to engage with business, the third-sector and local government to provide a coordinated employment response to an economic downturn.

When the Chancellor announced the temporary increase in March 2020, few of us imagined that we would still be in the grip of the coronavirus pandemic nearly a year later. Since March, the number of people claiming Universal Credit has risen from 3 million to around 6 million. The numbers of job vacancies remain far below their pre-pandemic levels. Removing the increase now, while the impact of the pandemic is still being keenly felt, would plunge hundreds of thousands of households, including children, into poverty. For the millions already living in poverty, it would drag them down into destitution. We urge the Government not to end the temporary increase in Universal Credit and Working Tax Credit, as planned, on 6 April 2021.

We share the Secretary of State’s view, echoed by evidence from front line support organisations, that a steady income is the best way to support people. Like her, we are concerned that one-off payments could increase the risk of fraud. We are also concerned about the risks that one-off payments can create for some vulnerable people, including people with some mental illnesses.

We were encouraged to hear from the Secretary of State that one-off payments are not DWP’s preferred approach, but they nevertheless seem to be an option that the Government is actively considering. We urge the Government to abandon any plans for a one-off payment to claimants of Universal Credit and Working Tax Credit.

We stand by our recommendation—made in October 2020—that the increase in Universal Credit should be maintained, with annual inflation-based increases. But we recognise that, in the short term, the Chancellor faces some very difficult decisions about the public finances amid a great deal of uncertainty about the future. We have considered carefully whether the increase should last only for the duration of the effects of the pandemic, but we are conscious that the Chancellor in his Budget statement will need to make a specific announcement. We therefore recommend that, if the Chancellor cannot yet commit to making the increase permanent, he should at the very least extend it for a further 12 months. The Government should then announce its future plans for the rate of Universal Credit no later than the Autumn Statement 2021, to give claimants enough time to plan and budget.