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How councils are shaping the biggest social security shake-up in history

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Making one of the biggest changes to the welfare system since its inception in the 1940s was never going to be easy.

universal credit guide graphic


When work and pensions secretary Iain Duncan Smith announced the coalition’s aim to replace six benefits with one ‘universal credit’ in 2010, the government expected councils to play a minor role in its rollout.

How wrong it was.

As LGC has discovered on a tour of two authorities that have been in the vanguard of implementing the credit, councils play a fundamental role in pinpointing the problems and solutions to this shake-up of social security work.

The input of these two pathfinder authorities - Oldham and Wigan MBCs - has even prompted welfare reform minister Lord Freud to link the success of the credit to a collaborative approach between his officials and councils.

“[Allowing] local stakeholders and local authorities to shape overall reform represents a cultural shift for the department in designing and implementing policy,” he says in an exclusive comment piece.

universal credit statistics


Judging by national newspaper headlines prompted by some of Lord Freud’s welfare reforms’ most public problems, his government has and will need all the help it can get to smooth the regime’s rollout.

The project so far has been dogged by delays and criticisms, including a faltering IT system and a budget that has spiralled upwards.

According to the Major Projects Authority, a government arm that keeps tabs on ministers’ high-cost ambitions, the pricetag for implementing the credit has risen £3bn since 2013 to £15.8bn.

While Mr Duncan Smith predicted one million claimants would be claiming the credit by April 2014, fewer than 90,000 were drawing it in July, according to official figures released this month.

Despite these setbacks, the DWP is committed to universal credit going live nationwide by next April.

So how have councils helped the DWP shape the implementation of the largest social security reform in its history?

Oldham found that its council tax benefit and the universal credit IT systems were not working well together. This resulted in the authority being left in the dark about whether claimants should qualify for the support benefit and forced officers to suspend some claims.

Working with the DWP, Oldham was able to create a new form that will help all local authorities calculate how much council tax benefit universal credit claimants are entitled to.

Another change resulted from feedback from First Choice Homes Oldham, a housing association to which the authority has sold all of its homes.

Since June, the association has trialled a so-called ‘trusted’ landlord regime, which lets named landlords identify tenants they consider to be a risk of being unable to manage their finances.

These tenants’ housing benefit is then paid to their landlord directly instead of being included in the universal credit.

According to Kirsty Johnson, business partner for new business in customer services at Wigan MBC, the initiative came about after such tenants were found to have been evicted as a result of missed rental payments.

Under current rules, known as ‘alternative payment arrangements’ , landlords must apply to the DWP to have rental payments sent to them direct and only when a tenant has failed to pay their rent for two months.

While landlords awarded ‘trusted’ status would be free to decide which tenants are put on APA, they could be stripped of this privilege if found to be adopting a blanket approach.

Mark Symmonds, universal credit project manager for Kier Business Services which provides Oldham’s revenues and benefits service, said DWP officials had been “incredible in listening to us and implementing some of the recommendations we have given them”.

Councils have also pinpointed problems and solutions to the support system offered to claimants.

Oldham, for example, seconded a ‘personal budgeting support’ officer to its Jobcentre Plus in response to a lack of referrals when the post was based at the council.

Emma Alexander, executive director for commercial service at the authority, said its support officer helped ­jobcentre staff to “ask the right questions” to see if claimants needed assistance with their finances.

“They can also speak with claimants on the same day,” she added. “As a result we have started to get more referrals - people who genuinely needed that support and benefited from it.”

While the PBS post has been funded in Oldham because of the council’s role as a pathfinder authority, all other councils must negotiate resources for implementing the credit with the DWP through ‘delivery partnership agreements’.

Funding routed through these agreements is expected to be rolled into a grant after the switchover to universal credit is complete. From early 2017, existing claimants of all benefits will be moved onto universal credit when their circumstances change.

This step will swell caseloads exponentially, increase the risk of people claiming housing benefit twice - through fraud or error - and drive up the cost of administering the system.

On top of this complexity, councils will play a role in managing a £12bn programme of cuts and changes to social security promised by the Conservative government in its manifesto.

It all makes for a tough and uncertain few years for local authorities.

Lesley O’Halloran, assistant director for customer services at Wigan MBC, pointed out that the government is yet to set a clear timetable for the full rollout of the credit to all benefit claimants.

“When you’re planning your business, considering your housing benefit staffing levels and doing your future modelling in terms of the changes, it can cause problems. You can’t plan and don’t know what your future funding will be like,” she added.

“On the other hand when you’re delivering something like this it’s better you do it slowly and correctly.”

The DWP told LGC a “gradual migration” of existing claimants to the credit would begin in early 2017.




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