Select committee: Economic Affairs Committee
Conclusion 1
2nd Report - Universal Credit isn't working: proposals for reform
Published 31 Jul 2020
Paragraph 10
Economic Affairs Committee The economics of Universal Credit All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Conclusion (the committee's words)
We launched this inquiry with the intention of examining how well Universal Credit’s original aims and objectives were being achieved. We started with no preconceptions on whether Universal Credit was working as it should, whether it required reform or whether it should be replaced with something new. We received overwhelming evidence that Universal Credit is not broken irredeemably and that replacing it with a new system would cause significant upheaval and disruption to claimants. However, it requires substantial reform. Based on the evidence we received, it is our view that the original aims and objectives of Universal Credit are broadly correct. However, there are substantial problems with its design and implementation that have undermined the security and wellbeing of the poorest in our society.
From: Economic Affairs Committee, 2nd Report - Universal Credit isn't working: proposals for reform, paragraph 10, 31 July 2020
Government response
The government responded to the whole report on 13 October 2020 (deadline 30 September 2020).
Summary written by Accountability Index from the government's response. It is not the government's own words.The Government 'notes' the Committee's recommendations and says it is 'surprised by several of the Committee's observations', and in the areas covered below it does not take forward the main design changes proposed.
- On payment design, the Department says it "will not be taking this recommendation forward" on a three-month fixed award, and "will not be introducing this choice by default" of monthly or twice-monthly payment. It cites accuracy risks and preparation for monthly paid work.
- The Department states that "in 2021 we will be increasing the time over which an advance can be repaid to from 12 to 24 months". It "rejects" the proposed non-repayable two-week initial grant, citing fraud risk.
- The Department "does not accept" the recommendations on the two-child limit and on reducing the taper rate. It says it "keeps the taper rate under review".
- It "intend[s] to keep childcare support integrated as part of UC" and "does not publish estimates of UC take-up rates". On the benefit cap, it "acknowledges" the recommendation and says the statutory review "will happen at an appropriate time".