Select committee: Economic Affairs Committee
Conclusion 25
2nd Report - Universal Credit isn't working: proposals for reform
Published 31 Jul 2020
Paragraph 116
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)
The Government undertook the most significant social security reform for a generation at the same time as making substantial cuts to public spending, including wide ranging cuts to the social security system, in order to reduce the deficit. Cuts to Universal Credit have been partially restored but they, along with problems of design and implementation, have had lasting consequences by increasing poverty and hardship among many claimants. Universal Credit’s promise of increased generosity now rests on higher take-up by claimants. The reputation of Universal Credit is poor and higher take-up is not guaranteed. The DWP should start publishing take-up estimates in order to assess how successful Universal Credit has been in achieving the increased take-up that is assumed to flow from simplification .
From: Economic Affairs Committee, 2nd Report - Universal Credit isn't working: proposals for reform, paragraph 116, 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".