Friday, 27 July 2018

Universal Credit

Last week I made one of my regular visits to the local Job Centre at Redruth. One of the biggest successes of the last eight years has been the astonishing turnaround in the job market. Britain is working again. When Gordon Brown left office, youth unemployment was a major problem and unemployment was rising. Eight years later, the unemployment rate is the lowest since the early 1970s and level of employment are at an all time high.
In Camborne, Redruth and Hayle, unemployment is now significantly below the national average which is quite a change and reflects the fact that we are attracting new industries to the area. The total number of unemployed claimants for June 2018 was 840. This represented a rate of 2.1% of the economically active population aged 16-64, lower than the equivalent UK average claimant rate of 2.8%.
It is also worth noting that since 2010, the majority of employment growth has been in both full-time and permanent roles so the allegation that all jobs today are on so called "zeros hours contracts" is not correct. In addition, this astonishing turnaround has been achieved while there have been major increases in the minimum wage and also the new roll out of the National Living Wage so that those on the lowest incomes have had a significant pay rise. These changes have had particular relevance in Camborne and Redruth.
However, my main reason for wanting to meet the Job Centre this time was to get a view from the coal face about the new Universal Credit which is now being rolled out in earnest. The idea behind the Universal Credit is to simplify the benefits system so that many former types of support are merged into one single benefits payment. Support will be tapered so that it always pays to work more hours or seek higher pay rather than get by on benefits. It also means that the level of benefit support automatically changes month to month based on how much they earn in real time. So, if someone takes more hours during a busy period they will be better off but they will also have the security of knowing that if their hours go back down a few months later then support will automatically kick back in without them having to fill out a load of forms again.
This is vital because for far too long people have been trapped in poverty by the old system because if they worked too many hours or earned too much then they would lose all their benefits and then find it a fight to get back on the system should things change again. Under the old system it literally was not worth working longer hours or in some cases people would be worse off working more hours. Employers used to complain that people told them they were "not allowed" to work more than sixteen hours a week. That is crazy. The old system disincentivised work and change was desperate required.
However, as with any policy, you have to get the delivery right as well as the concept behind the policy right. Critics have recently cast doubt on the new system so I wanted to work out whether anything was going wrong in terms of the delivery that needed addressing. Just over a year ago there had been concerns that making payments monthly rather than weekly would cause problems. So, changes were made to address that. It is now very easy to get an advance payment to help cashflow in the changeover.
Talking to staff who, in some cases, had been with the Job Centre for over twenty years, they were really enthusiastic about the change. They say that they have been really engaged in the design on the new system. Whereas, in the past, everyone had to come in every week to "sign on', now there is much more discretion for an individual "job coach" to decide how frequently a job seeker should attend the office. There is far more done on a simple online portal which is easy to use and can be used to give advice and support. Anyone who needs help in the job centre to use the online system automatically gets it. There is an assigned case officer who looks after a group of job seekers meaning that trust can develop. The system is easier both for those who need to use it an those who are implementing it. The conflict and tension of the old system has been largely removed.
Reforming the welfare system and supporting people back into work go hand in hand. For too long, too many people were left languishing on benefits and trapped in a life of poverty. Helping them go back to work has been one of the primary objectives of the Government in recent years and the results are showing.
As with any new system there will always be problems that come up which require attention, and lessons were learned from some of the pilots. However, I am now very optimistic about the benefits that the new Universal Credit will deliver for people on lower incomes in Camborne and Redruth.

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