Martin Ford 29 October 2018

Budget 2018: Billion-pound Universal Credit pledge

A billion pounds has been promised in an attempt to ease benefits claimants’ transition to Universal Credit.

The chancellor Philip Hammond bowed to pressure from MPs on both sides of the Commons by announcing a package worth £1bn over five years in his today's Budget.

The system has faced criticism from both the opposition and Mr Hammond’s own party, with a joint statement signed by 20 Conservative MPs calling for extra funds before Monday’s Budget statement.

The rollout has also come under fire from the cross-party Work and Pensions Committee and, last week, the Public Accounts Committee (PAC).

Whilst admitting ‘I recognise the genuine concern among many members’, the chancellor defended Universal Credit as a ‘long overdue and necessary reform’ replacing a ‘broken system’.

He claimed it would ‘help drive growth and employment’ and was ‘here to stay’.

Mr Hammond also announced that he would raise work allowances by £1,000 per year, claiming 2.4m people would benefit to the tune of £630 – costing the treasury £1.7bn. ‘Additional protections’ will also be detailed later this year.

The completion date for managed migration has been pushed back to December 2023.

Councils have been hit financially by the chaotic rollout of UC, with delays in payments to claimants causing them to fall behind on rent and tax bills and in the worst cases, being made homeless.

It has left councils facing additional administration costs and rent and tax shortfalls that are not covered by funding from the Department for Work and Pensions (DWP).

In addition, funding for Universal Support, the system for helping people to claim money, has been withdrawn after the Government handed responsibility to Citizen’s Advice in a £39m contract from April 2019.

This week’s measures are described by the Treasury as ‘a response to feedback’ following stinging criticism from the PAC last week. It said the DWP was ‘disturbingly adrift from the real-world problems’ caused by the Universal Credit rollout.

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