Damning report says Universal Credit failing 'most vulnerable' | Rent Income Excellence Network news

Damning report says Universal Credit failing 'most vulnerable'

A new report has delivered a scathing attack on Universal Credit, saying it "is failing millions of people, particularly the most vulnerable".

The report comes from the Lords' Economic Affairs Committee, which has blamed Universal Credit for "soaring rent arrears and the use of food banks."

The Committee say "urgent investment" is needed for Universal Credit to provide people with "adequate income".

It adds: "The temporary increase in the standard allowance in response to the Covid-19 pandemic shows that the previous level of awards was too low. The increase should be made permanent."

The report also claims that Universal Credit is being used to "recover debt" - pointing toward the £6bn of tax credit debt. 

It says on this point "tax credit debt should be written off as it is unlikely to be repaid."

The report makes more suggestions for government in how it can positively amend Universal Credit, tackling the five week wait and payment issues.

It says: "The five-week wait for the first Universal Credit payment is the main cause of insecurity. This wait entrenches debt, increases extreme poverty and harms vulnerable groups disproportionately. The Government should introduce a non-repayable two-week grant to all claimants.

"The way payments are calculated can result in large fluctuations in income month-to-month, making it extremely difficult for claimants to budget. The level of awards should be fixed at the same level for three months.

"There should be a mechanism to enable claimants to have an early reassessment if their circumstances change."

There is also particular criticism levelled at the sanctions regime, with the Committee saying they should only be used as a "last resort".

It adds: "The UK has some of the most punitive sanctions in the world, but there is limited evidence that they have a positive effect. Removing people's main source of support for extended periods risks pushing them further into poverty, indebtedness and reliance on food banks.

"There is a substantial body of evidence which shows that sanctions harm people’s mental health. The Government should evaluate the current length and level of sanctions. It should also expedite its work on introducing a written warning system before the application of a sanction."

Lord Forsyth of Drumlean, Chair of the Economic Affairs Committee, said: "Most people, including our Committee, broadly agree with the original aims and objectives of Universal Credit. However, in its current form it fails to provide a dependable safety net. It has led to an unprecedented number of people relying on foodbanks and not being able to pay their rent.

"The mechanics of Universal Credit do not reflect the reality of people’s lives. It is designed around an idealised claimant and rigid, inflexible features of the system are harming a range of claimant groups, including women, disabled people and the vulnerable.
"Universal Credit needs more money to catch up after 10 years of cuts to the social security budget. It requires substantial reform to its design and implementation, the adequacy of its awards, and how it supports claimants to navigate the system and find work.

"The five-week wait for a first payment must be replaced by a non-repayable two-week grant to all claimants. The monthly payment calculations which can result in big fluctuations to claimants’ incomes should be fixed for three months. Historical tax credit debt needs to be written off.

"The punitive nature of Universal Credit has not worked. It punishes the poorest by taking away their sole source of income for minor infractions. It needs rebalancing, with more carrot and less stick, particularly as large numbers of claimants will have ended up on it because of events completely out of their control."


Universal Credit and welfare reform are key topics covered by our Rent Income Excellence Network. To find out how you can get involved in the network, please visit the network page.