Newcastle was chosen as the experiment for the universal credit rollout – and the problems were clear to see, writes Nick Forbes
Over the last two years, Newcastle – 289 miles from London – has been at the forefront of a tragic experiment cooked up in Downing Street.
We were chosen as the first whole city pilot for the implementation of universal credit. For a Labour authority which has done so much to create jobs and promote good quality work, we supported the principles behind it – a benefits system that is easy to use, and which does not punish people by immediately cutting off support when they enter work.
But we also warned up front that there were risks. We thought that the move from weekly to monthly payments had not been explained properly, and that people might struggle to adjust. Our experience of implementing a new council tax support scheme to replace council tax benefit (scrapped by the coalition government) revealed that many people struggled to fill in complicated forms online.
In May 2016, universal credit started its rollout in Newcastle, first at just one Jobcentre Plus, and expanded in early 2017 ahead of a national shift thought at the time to be just months away.
Almost immediately, it became clear families with little or no savings were going to struggle to cope with an immediate loss of money that lasted as long as six weeks.
Even with just three Jobcentres operating universal credit, my council was faced with people turning up at our customer service centres in absolute desperation. We helped people with emergency payments – paying out nearly £50,000 in the first year alone – and that was just for the people that came to us. Council staff started keeping tinned food behind the counter to hand out to those who had not eaten for days.
We knew debt was mounting for many, and we soon started seeing another sign of this. People simply could not afford to pay their rent. By July 2018, rent arrears for council tenants attributed solely to universal credit were £1.4m. We were able to manage this because we control the housing revenue account, but were acutely aware that there would be thousands of people in private rented properties similarly affected but who we were powerless to help.
And the pain does not stop once the waiting period for payments is over. By its very nature, many of those on universal credit are at a difficult stage in their life. Their loss of income does not exist in a vacuum. Instead it compounds the other trappings of deprivation. The debts, the low income jobs, the benefit cuts that keep piling on.
Those who waited for the money to feed themselves sometimes received a short-term advanced payment. The repayments then meant the next 12 months were paid out at a lower level. A six week delay, of no fault of the claimant, goes on to be a year-long punishment. Sometimes this is combined with the Department for Work and Pensions taking other deductions from payments at the maximum levels without considering individual circumstances. We have seen this, incredibly, in historical tax credit overpayments that are deducted automatically from universal credit payments.
We started raising the alarm early on. We wrote to ministers, and invited them to come and see for themselves the impact of universal credit in Newcastle. We gave evidence to select committees and our local members of parliament repeatedly raised questions in parliament. But what we came up against, time and time again, was a government so fixated on implementing a flagship policy it became immune to the real and devastating human consequences.
As a Labour council, we advised how to implement universal credit. We warned when it was not done properly. We stepped in – and continue to do so – to help those badly affected by it. But our power to act is limited. The honest truth is that a good idea has been appallingly executed, with ministers turning a blind eye to the harm and misery that their actions were causing. There is still a chance to learn from these mistakes and while I would not wish Newcastle’s experience of universal credit on any other town or city, I hope that the suffering people have experienced here can even, at this late stage, lead to a change of heart.
Nick Forbes is leader of Newcastle city council and the Local Government Association Labour group
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