Universal Credit roll-out ‘could lead to a significant increase in foodbank use’, charity warns

The Tory Government’s flagship Universal Credit reform is likely to lead a “significant increase in foodbank use”, the UK’s largest foodbank network has warned.

Trussell Trust, who currently operate hundreds of foodbanks across the UK, has published new research suggesting that the next stage in the roll-out of the new benefit will result in a “major increase in the proportion of foodbank referrals”.

Universal Credit is replacing a number of existing social security benefits, including tax credits and housing benefit, as part of the UK Government’s widespread reforms of the UK’s social security system.

The new benefit has faced fierce criticism since it was introduced by the former Work and Pensions Secretary Iain Duncan Smith, not least from the National Audit Office (NAO) whose independent research has found that it fails to deliver value for money for taxpayers.

The independent Resolution Foundation thinktank has warned that Universal Credit is at risk of collapse if widely-reported flaws in the new system aren’t resolved ahead of a mass roll-out starting in July of next year (2019).

And charities have warned that Universal Credit, in its current form, is failing to support claimants with the greatest needs. 

Paul Farmer, Chief Executive of Mind, said:  “Under Universal Credit, even those who are severely unwell and at crisis point are still being required to look for work or risking losing their benefits.

“We’ve also seen a real lack of support for people who aren’t well enough to manage an online claim or monthly payments.

“While some people with mental health problems are able to manage their money well, for others receiving one payment and being responsible for ensuring rent and bills are paid can be problematic.

“Taken together these problems are driving too many people into a cycle of debt, housing problems, and deteriorating mental health.”

Trussell Trust has noticed an increase in referrals to its many foodbanks of people in receipt of Universal Credit between April 2016 and April 2018, especially while people are waiting for their first payment to come through.

The Government has reduced the waiting time for an initial payment from six to five weeks, but Trussell Trust say people are still experiencing financial hardship, particularly among those with the greatest needs.

These findings come as the DWP finalises its plans for the next stage of Universal Credit to take to Parliament later this month.

“Until now, only people making a new application for benefits in certain areas have been able to apply for Universal Credit”, the charity says.

“This next stage – ‘managed migration’ – will see the three million people currently receiving tax credits or benefit payments under the old system sent a letter telling them to reapply for these payments under Universal Credit.”

Anyone who fails to meet the deadline in applying for Universal Credit, for whatever reason, will see their benefit payments stop immediately and will not be assisted by “transitional” protections.

Trussell Trust highlights the fact that research shows that half of people at foodbanks have a disability or health condition, or live with someone that does, suggesting they are already more likely to need a foodbank’s help.

Emma Revie, Chief Executive of The Trussell Trust, explains: “We created our benefits system in this country to free people from poverty, not lock them into it. As we look at the current plans for the next stage of Universal Credit, we’re really worried that our network of foodbanks could see a big increase in people needing help.

“Leaving three million people to wait at least five weeks for a first payment – especially when we have already decided they need support through our old benefits or tax credits system – is just not good enough.

“It doesn’t have to be like this. We know the problems people are likely to face as they move over to the new system, so we can learn from them.

“The Department for Work and Pensions has shown they can act on evidence from the frontline to make a real difference to people who need our benefits system’s vital support. Now is the time for our Government to take responsibility for moving people currently on the old system over, and to ensure no one faces a gap in payments when that moves happens.

“Universal Credit needs to be ready for anyone who might need its help, and it needs to be ready before the next stage begins.”

Trussell Trust is calling on the Government to ensure there is no gap between old and new benefits payments and says the DWP should publish “a schedule for the next stage of Universal Credit, ensuring there are opportunities to review the process and make changes whilst it is underway if needed”.

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