Getting Ready to Deliver Universal Credit Jeremy Groombridge CB Director, Universal Credit Programme, DWP

Transcription

1 Getting Ready to Deliver Universal Credit Jeremy Groombridge CB Director, Universal Credit Programme, DWP February 2013

2 Why reform the welfare system? Two fundamental problems with the current welfare system: poor work incentives - because of the swift withdrawal of benefits when taking a job, too many people have simply felt that work doesn t pay complexity - the system has become incoherent and costly because people don t know where they stand, stepping into the world of work can appear risky Cost of a failing benefit system 5 million people trapped on out of work benefits 1.9 million children living in homes where no-one has a job. Complexity has increased the rate of fraud and error, costing the taxpayer more than 5.5 billion every year.

3 The Universal Credit vision By removing the barriers and dis-incentives to work, and making the system simpler, Universal Credit will: make sure work pays especially for those on the lowest incomes, helping people to live independent lives; lift thousands of children out of poverty, reduce workless-ness, and encourage people to take personal responsibility; act as a launch pad for motivating people back into work fostering confidence and self-esteem and helping to end the dependency culture; significantly reduce the cost of fraud and error to the taxpayer. Universal Credit will continue to guarantee financial support for individuals who cannot work.

4 Universal Credit a paradigm shift Universal Credit is the most significant reform of the welfare system for a generation. The scale of the Universal Credit challenge in numbers 12 million existing claims become 8 million household UC payments by 2017 Replacing 6 main benefits and tax credits JSA, ESA, Income Support, Working and Child Tax Credits, and Housing Benefit with a single credit for people in and out of work Coordination across 3 major delivery organisations DWP, HMRC and 400 Local Authorities But, Universal Credit is not just another benefit - it is a new way of delivering welfare services with work, and its potential to change lives, at its core.

5 Key features A single payment for people out of work and in work. UC is designed to allow people to keep more of their benefit in the transitional period back to work. A simple disregard structure and single taper rate means people can clearly see how work pays. UC brings a new type of claimant for DWP many UC claimants will be in work some may never have had contact with Jobcentre Plus before. In-work UC claimants will be subject to conditionality may be required to undertake activity to help increase their earnings working on new ways of determining this conditionality. Impact on employers introduction of HMRC s Real Time Information system - direct link between an employee s pay and UC award employees will be able to take on more work Self-employed to report cash in / cash out so UC award can respond to fluctuating incomes. Require a gateway interview, minimum income floor.

6 New relationships, obligations and expectations A new type of relationship with claimants, a changing role for DWP staff A new contract with the claimant The claimant commitment is a personal contract with the claimant to encourage personal responsibility A reasonable level of financial support in return for fulfilling the terms and conditions of their contract Conditions will be personalised according to individual capability and circumstances. A new type of claimant / advisor relationship focus on a coaching and mentoring the claimant to reach their contract goals supporting and challenging, being firm when required Less time spent administering a claimant s benefit.

7 An on-line service Universal Credit will be a digital service Universal Credit claims will be made online a self service experience online services can be more responsive to a claimant s circumstances and will help prepare the claimant for work our digital aspiration 50% of contact that can be digital will be by Oct 2013, 70-80% by Encouraging claimants to use the online service designing a compelling and easy to use service user-centred design working across government, private and voluntary sector to get more people online, e.g. with digital champions accessible system, compatible with the key assistive software technologies Support for those unable to use online system supporting online channel through telephony, high street access (through Jobcentres and third parties)

8 Paying Universal Credit Universal Credit will be paid monthly, direct to the household paying monthly like a salary would be paid monthly budgeting will ease the transition to work a single, direct payment enables households to see the effect decisions about work, encourages personal responsibility Claimants may not be able to budget on a monthly basis Budgeting support guidance published yesterday Some claimants do not have bank accounts working with financial product providers to make services more supportive to low income households range of suppliers exploring feasibility of new financial products Housing costs paid to the claimant, not the landlord Recognise concerns that some vulnerable people may not able to cope with rent payments, impact on their income and costs in exceptional cases will allow alternative payment arrangements - such as more frequent payments, split payments, payments direct to landlords - for those not able to manage Universal Credit, even with support.

9 Universal Credit implementation - testing before delivery Direct Payment Demonstration Projects (started June 2012) Testing key elements of incorporating housing support into Universal Credit whilst protecting the financial position of social landlords Local Authority-led pilots (2013 focus - from autumn 2012) Testing service integration, particularly design of face-to-face service delivery, at local level for improved claimant support and work focus Pathfinder (planned for April 2013 in Greater Manchester and Cheshire) An early implementation of Universal Credit to enable us to learn from experience and build confidence. Live Innovation Trialling (started in April 2012) To trial components of the end-to-end Universal Credit service proposition in a live environment with real people in real time Model Office (throughout implementation) A series of incremental, integrated tests in a controlled environment that will be built as the Universal Credit system, processes and support products are developed

10 Local Support Services: Beginning the Conversation with Providers Working with local authorities and other organisations to form a comprehensive view of the services required to support delivery of UC.-specifically around : triage and explaining new services; online assistance; and money advice Framework published on 11 February - Product of Joint DWP/LAA Taskforce; - Applies to Phase 2 (Oct 2013-April 2014); - Based on existing local delivery partnerships, with membership and terms of reference reviewed to ensure capability to deliver UC services; - Partnering Construct envisages overarching Partnership Agreement between DWP and LAAs, and local level Delivery Partnership Agreements

11 Local Support Services: Beginning the Conversation with Providers During 2013, Task Force will refine and update the framework informed by feedback and suggestions, learning from local authority-led pilots, Direct Payment Demonstration Projects and the Pathfinder: Key principles for funding newly required or expanded services: - Affordability and value for money; - Simple to understand and administer; - Incentivises delivery partners to deliver services that promote self sufficiency, independence and, wherever possible, work - Outcome based; - Flexible, transparent and targeted; - Meets wider UC principles and goals Further collaborative work to define expected outcomes and level of payment for each outcome.

12 Personal Budgeting Support Guidance published yesterday Two elements: - Money advice: offered to all UC claimants on making claim and given to those who have clear need; delivered by external providers online, by phone or face to face where necessary; designed to help claimants cope with managing money on a monthly basis and paying bills on time - Alternative payment arrangements for some claimants who genuinely cannot manage standard monthly payment and there is a risk of financial harm to claimant or family; considered on case by case basis; might include rent paid directly to landlord, a more frequent than monthly payment, or split payment between partners.

13 Universal Credit implementation illustrative timeline APRIL 2013 Pathfinder begins From OCT 2013 National introduction of Universal Credit starts gradual introduction and testing of further scope and functionality 2014 and beyond Stabilisation, further testing, learning and safe expansion - new claims from people in work and phased move of current claimants 2017 Universal Credit roll-out complete

14 Pathfinder Pathfinder will take place from April It will test new payment system with local authorities, employers and claimants in a live environment before national rollout. West Dunbarton North Lanarkshire Edinburgh Dumfries & Galloway Will target single, unemployed people, with or without rented housing costs, in selected areas in Tameside, Wigan, Oldham and Warrington local authority areas. Key: Pathfinder LA-led pilots Direct Payment Demonstration Projects Oldham Wakefield Wigan West Lindsey Warrington Tameside Rushcliffe Shropshire Melton Birmingham Oxford Torfaen Caerphilly Southwark Newport Bath & NES Lewisham North Dorset

15 Communications - What you can expect from us We have begun the process of explaining Universal Credit and how it will affect claimants and stakeholders. We are also working closely with over 70 partner organisations (including several housing bodies) to develop joint communications. We will soon be commencing several high profile activities to raise awareness of Universal Credit, including, A Partnership Toolkit, including quick guides covering for example, housing, children, budgeting, work and disability, frequently asked questions, overview of Universal Credit, case studies, and links to useful tools, for example on budgeting advice. Public Information leaflets, describing the new service, how it will affect people and information about seeking additional support; Information will be available for claimants shortly at