This blog is by Frank Hammerton, the Business Development Director of Teleperformance Collections.
The British government has championed the idea of Universal Credit for over three years now and the first pilot has just been taking place in Ashton-under-Lyme.
Universal Credit was a policy created by the former leader of the Conservative Party, Iain Duncan Smith (IDS). After he was cast aside as party leader in 2003 he formed a centre-right think tank called the Centre for Social Justice aimed at finding innovative ways to eradicate poverty in the UK.
Despite the reputation of IDS as a politician with views to the right of the Conservative party the Centre for Social Justice became well known for their research into tackling poverty. When IDS became the minister for Work and Pensions in 2010 he immediately set about trying to implement what had been a research project for the previous six years.
The result is Universal Credit. In theory it is a single benefit that replaces six of the main means-tested benefits and tax credits. The aim is to both simplify the benefit system for the government and claimants and also to create a situation where it always pays an individual more to work rather than to remain claiming benefits.
This is an attractive maxim. The electorate hates to hear about people living on benefits alone, so a policy designed to fix the classic benefit ‘trap’ should be popular.
But it has been difficult to get as far as the pilot. The entire system depends on a centralised IT system and increased automation – the ‘customer’ needs to do a lot more work using Internet pages rather than interacting with people who can advise on the benefits being claimed.
This has already led to severe delays in the rollout. Many believe that the system can work in theory, but will fail in practice as the people it targets are less likely to have Internet access and less likely to be familiar with claiming in this way and the cost to transition to an entirely online system, such as this, would wipe out the benefit of changing.
The danger for the claimant though is that as benefits are removed and they are switched over to the UC, rules may shift, their income may suddenly change, and this could lead to an escalation in debt problems because of the actions of the government.
This will be the difference between the theory of a grand unified system and the reality of someone just struggling to pay their weekly rent. The claimant can’t afford a mistake even in the payments made just for one week, but political ambitions and the election timetable may mean that the system has to roll out regardless of whether it is ready or not. I hope they get it right.
Photo by Eric 731 licensed under Creative Commons