Recommendations & Conclusions
11 items
1
Conclusion
Second Report - The Cost of Living
Acknowledged
The Committee welcomes the Government’s swift action and range of measures introduced in response to the cost of living crisis. It is clear that these will offset some of the increased costs for households living in poverty. However, we have heard very concerning evidence about the impact of the crisis …
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The Committee welcomes the Government’s swift action and range of measures introduced in response to the cost of living crisis. It is clear that these will offset some of the increased costs for households living in poverty. However, we have heard very concerning evidence about the impact of the crisis on disabled people, older people, carers and larger families in particular.
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Government response AI summary
The government acknowledges the impact of the cost of living crisis on specific vulnerable groups and describes its communication efforts to ensure people receive their full benefit entitlements, including the Help for Households campaign and a dedicated online hub.
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Department for Work and Pensions
2
Recommendation
Second Report - The Cost of Living
Accepted
We recommend that the Department for Work and Pensions engage with the organisations mentioned throughout this report to assess what further or more direct support needs to be provided to any of these groups as the cost of living continues to rise. We also urge the Government to simplify the …
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We recommend that the Department for Work and Pensions engage with the organisations mentioned throughout this report to assess what further or more direct support needs to be provided to any of these groups as the cost of living continues to rise. We also urge the Government to simplify the support mechanisms to ensure households understand what support they are entitled to and enable them to chase up receipt. (Paragraph 12) The adequacy and uprating of social security
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Government response AI summary
The Department says it already works hard to ensure that people are in receipt of their full entitlement and communicates with the public about benefits through various channels, including paid advertising, stakeholder and employer engagement, and campaigns. They also say they are providing extra financial …
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Department for Work and Pensions
3
Recommendation
Second Report - The Cost of Living
Rejected
We welcome the inclusion of those on legacy benefits in the Government’s support measures. We recognise that there are logistical difficulties in getting the necessary support in place quickly, but the Government does not seem to have taken on board our previous recommendations to improve systems. While we understand that …
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We welcome the inclusion of those on legacy benefits in the Government’s support measures. We recognise that there are logistical difficulties in getting the necessary support in place quickly, but the Government does not seem to have taken on board our previous recommendations to improve systems. While we understand that in this case one-off payments may have been quicker to put in place, and able to reach more people, we agree with the Secretary of State’s opinion from 2021 that they are not the preferred approach. We recommend that other options, such as more responsive benefit uprating, are prioritised in future.
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Government response AI summary
The government says one-off payments are the quickest way to deliver support given the current cost-of-living situation. There is no commitment to prioritising other options like more responsive benefit uprating in the future.
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Department for Work and Pensions
4
Conclusion
Second Report - The Cost of Living
Rejected
The systems that legacy benefits run on are not fit for purpose. It is disappointing that the Department has not adapted its IT systems to allow for flexibility in uprating these benefits to respond to national events. The Department has scheduled and then delayed the migration of claimants from legacy …
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The systems that legacy benefits run on are not fit for purpose. It is disappointing that the Department has not adapted its IT systems to allow for flexibility in uprating these benefits to respond to national events. The Department has scheduled and then delayed the migration of claimants from legacy benefits onto Universal Credit several times and the current date to complete this process for many is the end of 2024, leaving legacy benefits still in use for a considerable period. The Department must be able to uprate legacy benefits swiftly in times of high inflation. The Department should also publish (or at least provide to the Committee) for each benefit the details of the process, complexities and time required for the uprating exercise. We repeat our recommendation that the DWP work to increase the speed with which changes can be made to legacy benefit and state pension rates.
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Government response AI summary
The government rejects making IT changes to uprate legacy benefits because working-age legacy benefits are closing and those legacy claimants will be moved to UC by 2024. They also have no plans to change the up-rating period.
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Department for Work and Pensions
5
Recommendation
Second Report - The Cost of Living
Rejected
While an annual uprating is workable and effective at times of stable inflation, it is not appropriate in more volatile economic circumstances and is causing people real hardship. In the medium-term the Department should reduce the length of time between the inflation reference period and the uprating implementation date to …
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While an annual uprating is workable and effective at times of stable inflation, it is not appropriate in more volatile economic circumstances and is causing people real hardship. In the medium-term the Department should reduce the length of time between the inflation reference period and the uprating implementation date to allow more flexibility in the system, preferably to the previous quarter end or more recent if possible.
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Government response AI summary
The government will not reduce the length of time between the inflation reference period and the uprating implementation date because it is using one-off payments instead and there are IT limitations. They will continue using a consistent period for up-rating as it evens out peaks …
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Department for Work and Pensions
6
Recommendation
Second Report - The Cost of Living
Accepted
Whilst £1.5 billion for the Household Support Fund is welcome, we are concerned that there is no information available to indicate where this funding is going, The cost of living 37 and whether or not it is supporting the most vulnerable households effectively. Discretionary funding should not replace core funding. …
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Whilst £1.5 billion for the Household Support Fund is welcome, we are concerned that there is no information available to indicate where this funding is going, The cost of living 37 and whether or not it is supporting the most vulnerable households effectively. Discretionary funding should not replace core funding. Where the Government continues to use discretionary funds, it should ensure councils are well supported to deliver the funding to the households who need it the most. We ask the Department to publish information on what local authorities have spent this funding on to date by the end of September 2022.
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Government response AI summary
The government states that they are clear that Local Authorities are best placed to decide how best to support local people in need, within the clear expectations set out in the Household Support Fund guidance and they have published the Management Information (MI) for all …
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Department for Work and Pensions
7
Recommendation
Second Report - The Cost of Living
Rejected
The Housing Support Fund was designed to be a short-term measure but is now in its third funding cycle. While we all hope to see far more stability in the economy in coming years, the need for such funds highlights that benefits are already set at subsistence levels for most, …
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The Housing Support Fund was designed to be a short-term measure but is now in its third funding cycle. While we all hope to see far more stability in the economy in coming years, the need for such funds highlights that benefits are already set at subsistence levels for most, leaving no capacity for individuals to cope with short term shocks. A more responsive uprating system would help to address this. We recommend that, by the end of this Parliament, the Government review the adequacy of benefit levels and publish its findings. This should include a specific review of the adequacy of disability benefits and should consider whether it is appropriate to continue to rely on discretionary funds and one-off payments.
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Government response AI summary
The Government does not intend to conduct a specific review into the adequacy of benefit levels, stating there is no objective way of deciding what an adequate level of benefit should be.
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Department for Work and Pensions
8
Recommendation
Second Report - The Cost of Living
Acknowledged
The reset of Local Housing Allowance to cover the 30th percentile of rents was a welcome intervention at the start of the COVID-19 pandemic, but the increase has since been eroded by rising housing costs. Some parts of the country are experiencing acute shortages of affordable housing, and we have …
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The reset of Local Housing Allowance to cover the 30th percentile of rents was a welcome intervention at the start of the COVID-19 pandemic, but the increase has since been eroded by rising housing costs. Some parts of the country are experiencing acute shortages of affordable housing, and we have heard this is leaving some unable to move on from temporary accommodation. DWP should work with other Departments to make housing more affordable for those on low incomes, as it did in 2020. This must include an increase to Local Housing Allowance to ensure that it supports people on low incomes to access secure, affordable housing in their local area. (Paragraph 31) Benefit cap
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Government response AI summary
The government describes measures to improve access to home ownership and states that LHA rates are not intended to cover all rents in all areas and are forecast to continue at their current level through to 2025-26, but this will be reviewed annually.
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Department for Work and Pensions
9
Recommendation
Second Report - The Cost of Living
Acknowledged
We welcome the decision by the Government to exempt the cost of living payments from the benefit cap so that those most in need of support can receive it. This decision suggests, however, that the Department knows that the cap is set too low to effectively cover households’ now spiralling …
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We welcome the decision by the Government to exempt the cost of living payments from the benefit cap so that those most in need of support can receive it. This decision suggests, however, that the Department knows that the cap is set too low to effectively cover households’ now spiralling costs of living. Regardless of the changes made when the Fixed Term Parliaments Act was repealed, it was clearly not the intention of the original legislation that the benefit cap go more than six years without even being reviewed, let alone adjusted for inflation. The benefit cap should be reviewed urgently—and certainly no later than the end of 2022—to ensure it is in line with average household incomes and increasing rent/energy/food costs—the results of this review should be published. Furthermore, the cap must be uprated this year. (Paragraph 39) Deductions
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Government response AI summary
The government acknowledges the recommendation for reviewing the benefit cap and states that the Secretary of State is reviewing further advice on this.
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Department for Work and Pensions
10
Recommendation
Second Report - The Cost of Living
Rejected
Deductions from the Department are contributing to hardship for struggling households, who are already trying to tackle rising costs. We have heard that for some, deductions are pushing them into destitution and leading them to depend on food banks. The Government has urged creditors to accept reduced monthly payments or …
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Deductions from the Department are contributing to hardship for struggling households, who are already trying to tackle rising costs. We have heard that for some, deductions are pushing them into destitution and leading them to depend on food banks. The Government has urged creditors to accept reduced monthly payments or write off debts, but isn’t following its own advice. We recommend that deductions are paused, and then only restored gradually as the rate of inflation 38 The cost of living reduces, or when benefits have been uprated to reflect the current rate of inflation. If the Government is not willing to pause deductions then it must increase awareness of existing options such as short-term pauses, and ensure that those who are struggling can get accessible and practical debt advice. The Government should also consider the Committee’s recommendations on deductions and debt in our 2020 ‘Universal Credit–the wait for a first payment’ report. We would welcome a response by the end of 2022. (Paragraph 55) Pension Credit
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Government response AI summary
The government does not believe pausing deductions by default is in the claimant’s best interest, as the impact of any future benefit uprating would clearly be diminished if it coincided with the re-introduction of any paused deductions. However, DWP will work with claimants to review …
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Department for Work and Pensions
11
Recommendation
Second Report - The Cost of Living
Rejected
Pension Credit provides vital support for pensioners, yet some 850,000 eligible households do not claim it. The rising cost of living means this must now be urgently addressed. The Government’s efforts are focused on a communications campaign. The Committee heard, however, that this was unlikely to be enough. We recommend …
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Pension Credit provides vital support for pensioners, yet some 850,000 eligible households do not claim it. The rising cost of living means this must now be urgently addressed. The Government’s efforts are focused on a communications campaign. The Committee heard, however, that this was unlikely to be enough. We recommend that the Government work with key stakeholders, including local authorities, to develop a written strategy to increase take-up by the end of 2022. This should include a plan for the most effective ways to identify households likely to be eligible and support them to claim. The Government should also explore ways to simplify or automate parts of the claiming process. The strategy should have clear aims, including a target for take- up, as well as a timeline of actions to be taken to achieve this and confirmation of how the strategy will be funded. The Government should provide an annual update to the select committee on achievements to date and any amendments to the strategy. (Paragraph 66) The cost of living 39
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Government response AI summary
The government does not consider that a written strategy or targets for take-up of Pension Credit are required, given the work it is already doing and that automatic awarding is not possible based on current data.
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Department for Work and Pensions