Universal Credit: how we got here

The old system was also seen as inefficient and complex. It did not mirror work. The aim was nothing less than the end of poverty.

The report criticised policymakers for viewing poverty “through a financial lens only”.

Instead, wrote CSJ chair and former Conservative leader Iain Duncan Smith, policymakers needed to realise that “the choices you make have a significant bearing on whether you live in poverty”.

"The aim was nothing less than the end of poverty"

Less than a year after the report was published, the coalition government came to power and Mr Duncan Smith was named work and pensions secretary by the new prime minister David Cameron – with a mandate to put his theories to the test.

“The belief was that the solution to poverty was a purely technical one rather than about how much money you can actually get,” says Sam Lister, policy and practice officer and welfare reform expert at the Chartered Institute of Housing. “They completely oversold the advantages of it, and completely underplayed the disadvantages.”

It didn’t take long though for the wheels to begin turning on Universal Credit. It was announced in a consultation in the summer of 2010, adopted in the Spending Review in the autumn, placed into a bill in 2011 and passed onto the statute books in 2012.

But now came the difficult bit: implementing it. There is no understating how seismic a change this was. The government was, as Sue Ramsden, policy leader at the National Housing Federation, explains, taking direct control of housing benefit from local authorities for the first time since the 1980s.

It was also reliant on HM Revenue & Customs gathering live data on people’s earnings – something it did not yet have the capacity to do. Nonetheless, an ambitious timescale was agreed: the service would be fully rolled out by 2018.

“They got carried away,” says Mr Lister. “It came from their own rhetoric that ‘We are simplifying the benefit system’. They are in the sense that they are replacing six benefits with one – but that means you are creating one hell of a complicated benefit.”

As the timeline below demonstrates, the system hit problems quickly – it was only February 2013 when it had to be ‘reset’ due to difficulties with the IT system.

"They are in the sense that they are replacing six benefits with one – but that means you are creating one hell of a complicated benefit.”

For the remainder of the coalition government years it moved glacially – a ‘live service’, reliant on the postal service, the individual processing of claims and a much-maligned helpline to fix problems, focused only on the simplest cases such as new claimants and single, healthy job seekers.

The pace, however, has increased since the 2015 election.

The roll-out of the full service for new claimants and those whose circumstances change began in late-2015 and was completed this week. This brings far more claimants, including vulnerable people and families, into the scope of the new policy. By August 2018, a million households were claiming the benefit. This is up from 17,850 in July 2014.

Alongside this, in the summer Budget in 2015 George Osborne cut billions out of Universal Credit. Though some of these cuts have been undone by Theresa May’s government, the impact has been felt. Reports now mount of increased food bank use, growing rent arrears and destitution among claimants.

This week marks only the end of the first phase. The next is even more vexed – moving existing claimants into the new system in a process known as ‘managed migration’. This will begin in July and, under the current timetable, run until 2023. Some six million people need to be moved onto the new system in that time. Eight years on from its announcement, we remain at the tip of the iceberg.

“They got carried away,” says Mr Lister. “It came from their own rhetoric that ‘We are simplifying the benefit system’. They are in the sense that they are replacing six benefits with one – but that means you are creating one hell of a complicated benefit.”

As the timeline below demonstrates, the system hit problems quickly – it was only February 2013 when it had to be ‘reset’ due to difficulties with the IT system.

"They are in the sense that they are replacing six benefits with one – but that means you are creating one hell of a complicated benefit.”

For the remainder of the coalition government years it moved glacially – a ‘live service’, reliant on the postal service, the individual processing of claims and a much-maligned helpline to fix problems, focused only on the simplest cases such as new claimants and single, healthy job seekers.

The pace, however, has increased since the 2015 election.

The roll-out of the full service for new claimants and those whose circumstances change began in late-2015 and was completed this week. This brings far more claimants, including vulnerable people and families, into the scope of the new policy. By August 2018, a million households were claiming the benefit. This is up from 17,850 in July 2014.

Alongside this, in the summer Budget in 2015 George Osborne cut billions out of Universal Credit. Though some of these cuts have been undone by Theresa May’s government, the impact has been felt. Reports now mount of increased food bank use, growing rent arrears and destitution among claimants.

This week marks only the end of the first phase. The next is even more vexed – moving existing claimants into the new system in a process known as ‘managed migration’. This will begin in July and, under the current timetable, run until 2023. Some six million people need to be moved onto the new system in that time. Eight years on from its announcement, we remain at the tip of the iceberg.