Channel 4 - not necessarily the advisers' favourite TV company since the ghastly Benefits Street - is promising us half an hour on the Universal Credit debacle this evening. I may be jumping the gun to post about this benefit ahead of the show, but while preparing some notes for a talk on UC, it struck me that the fiasco we have now could easily have been avoided and the 'good bits' of UC already introduced if this ridiculous concept of 'Pathfinder' areas had been scrapped and an altogether different approach to bringing in changes adopted.
Here's my alternative plan. If we accept that it would actually be helpful to claimants to combine some benefits into one to save a new claim having to be made every time there's a change from sickness to health, part-time worker to carer etc (and I think we all do), that's surprisingly easy. What we now call Income-based Jobseekers Allowance and Income-related Employment and Support Allowance are no more than mutated forms of Income Support, which once provided means-tested support for jobseekers and the sick as well as lone parents and carers. It even encompassed what we now call Guarantee Pension Credit.
It cannot surely be beyond the wit of even IDS's minions to stitch IS, IbJSA and IrESA back together as Income Support, with multiple routes to entitlement. Do this, and you're already half way to Universal Credit - and without any expensive new IT. It could literally happen overnight and nobody would notice the difference, except the poor souls currently caught floundering about between ESA and JSA while they challenge a 'fit for work' decision.
On a technical point, I would dump the separate ESA components and use the existing IS 'disability' and 'enhanced disability' premiums to supplement the personal allowances of people in the WRAG and Support groups respectively, with transitional protection for any losers, though most claimants and couples will stand to gain.
Stage 2 is to tackle earnings disregards. IDS claims his reforms will 'make work pay', but he's left these untouched, like all of his predecessors since 1988 (there's a previous post from 27th March 2014 on this very point) while we wait for UC to come to the rescue. Nothing at all stops these from being uprated now. If you want to 'make work pay', make it! Put the disregard for a single person up from the insulting £5 per week to something vaguely credible - a day's work at the minimum wage, at least? What could be easier? I don't recall the system going into meltdown when the capital limits were made more generous.
Bringing Tax Credits back from HMRC and into this system is much more challenging but again, if we remember that personal allowances for children used to be an integral part of Income Support, to make them so again and to use these personal allowances and income disregards as the basis of in-work benefit calculations would seem the logical starting point - it is, after all, the basis of Housing Benefit. Key to this being seen as 'fair' would be a reasonable 'taper' applied to excess income. The current 65% for HB and UC, which diminishes additional earnings by more than half of their value and exceeds the top rate of income tax, is not 'reasonable'. Full credit for childcare costs should also be on our wish list.
As for housing costs, that is where I find myself in a quandary. The 'easy' option is to allow actual costs (subject to some restrictions on excessive rents and high mortgages) as part of the 'applicable amount' and let the DWP do the calculations, but there are arguments for keeping HB separate and under Council control. Local authorities are in a far better position than the DWP to spot landlord fraud; they know how many homes there are in a particular street, how many rooms in any given HMO. And what about discretionary payments? I am unclear on where or how (or if) these will be administered under UC.
As for payment - why not let claimants choose their payment interval? If they are used to budgeting on a monthly basis, tick for that; if weekly payments are more managable, tick for those. Let them choose to have their landlord paid direct too, if they want. Why is 'choice' the mantra for the middle-classes, whether we're talking education or healthcare, but benefit claimants are denied it to the point where they now face the prospect of pre-paid storecards for 'sensible' purchases only.
However we tackle any reform, a key factor in keeping the system 'fair' should be that it is not a 'postcode lottery', which is precisely what we have with UC. Claimants in neighbouring Councils currently have entirely different regulations applied to their claims, more or less generous disregards to part-time earnings. People in identical circumstances claiming a few days apart as UC 'rolls out' get paid different sums at different intervals, but both receive letters telling them they are getting 'what the Government says you need to live on.' The same problems plague PIP.
This isn't 'simplification' - it's a scandal. It will be interesting to see what Channel 4 makes of it.
