Select committee: Economic Affairs Committee
Conclusion 26
2nd Report - Universal Credit isn't working: proposals for reform
Published 31 Jul 2020
Paragraph 117
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 significant cuts to the social security system over the last decade mean that a catch-up increase in funding is needed urgently to ensure that Universal Credit is fit for purpose. Even when the recent increases in Universal Credit are taken into account, it is a less generous benefit than intended by its original proponents. Without the Government putting more money into the system, Universal Credit will continue to be beset by the problems that we have set out in this report. The recommendations below set out a pathway for making Universal Credit an adequate and fairer system which would provide greater security for claimants.
From: Economic Affairs Committee, 2nd Report - Universal Credit isn't working: proposals for reform, paragraph 117, 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".