Resolution Foundation Warn of Universal Credit Dangers


The Resolution Foundation, an independent think-tank chaired by the former Conservative Minister David Willetts, has today issued warnings about the universal credit benefits system.

David Finch, an author of the report produced by the Resolution Foundation, said:

“There’s a risk that people, particularly single parents, get trapped at quite low levels of pay and fail to progress. So while there may be an incentive for them to get into work, that incentive for them then to boost their earnings and progress in work is weak”.

The report made three key recommendations:

“1 – Ensure that the incentives UC creates are focused on those most likely to respond and in most need of support. With the employment picture vastly improved over recent years and levels of worklessness in households dropping dramatically, UC must be refocused to meet the living standards challenge of the future rather than the past.

2 – Embrace the challenge of tackling low pay and progression. Despite the welcome stride taken forward with the implementation of the National Living Wage, in-work poverty and low pay look set to remain key challenges in the coming years – UC must be ready to meet them.

3 – Take the chance to reassess the way in which the UC system itself functions and the processes people must go through when making their claim. As currently designed, UC piles extra burdens on recipients, these could be eased. Making people’s lives more difficult may make them resistant to the change UC brings. Requiring recipients to provide complex information so the system can calculate entitlements risks creating errors and mistakes that could cause implementation to stumble.”

The universal credit system is still being expanded and Stephen Crabb, the new Work and Pensions Secretary, said in a statement:

“All new single jobseekers across the country can now receive modern and improved personalised support through Universal Credit – marking an important milestone in the delivery of our welfare reforms.

Universal Credit is transforming welfare and is central to our vision for our society where people of all backgrounds can earn a decent wage and provide for their families, with claimants moving into work faster and earning more than under the old system. Our focus now is on continuing its expansion to all claimants”.

Lord Freud, the Welfare Reform Minister, added:

“The driving force of our reforms was to create a welfare system that allows people to break free of dependency and move into work.

Universal Credit is that system – it is giving people the confidence, self-esteem, and security that only a job and a pay-packet brings. Across the country nearly a quarter of a million people are claiming Universal Credit and tens of thousands of them are now in work”.