Tag: Frank Field

62 year old woman faces losing home because of unfair and pointless welfare sanction

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A 62-year-old woman says that she’s been forced to leave her home after the Department for Work and Pensions (DWP) sanctioned her – cut her benefits – for turning up late for a meeting.

Faith Hurford, from Hillesley near Stroud, who suffers with a range of medical conditions that haven’t been disclosed, says the benefit sanction means she is unable to afford the rent and has to move away from her home because of the DWP’s callous and unfair decision.

The Stroud News and Journal reports that despite her health problems, Faith had to travel a staggering 15 miles (one way) to attend a meeting about her Universal Credit claim in Stroud.

Due to heat, the sheer distance she had to cycle, as well as her chronic health issues, Faith was forced to stop and take a break at a Sainbury’s store to recover her energy, before continuing the arduous journey.

This meant that Faith turned up late for the appointment and was subsequently sanctioned for failing to turn up for the meeting on time.

Faith described the sanction as “unlawful” and tried to appeal the harsh ruling, but the loss of benefit meant she could no longer afford the rent and has to move away to Nailsworth.

“I had been a supporter of Universal Credit before – it helps you look for work and it’s simpler to use – but that sanction was unlawful.

“By the time I got to Sainsbury’s after hours of cycling I couldn’t go any further, I was completely dazed.”

Faith says that she tried to explain the reason for her lateness but her reasonable appeals fell on deaf ears.

She says that the sanction has cost her nearly £200 in lost benefit payments.

“You need to take a person’s circumstances into account. The effort I went to was not recognised in any shape or form.

“I can’t recover from a sanction like that, I’m on a shoestring. I grow my own veg, I’ve reduced my food intake. There’s nothing else I can do,” she said, adding “I’ve fallen behind on rent and I can’t afford this place now. I’ve got to move out.”

Faith is currently looking for a new place to live while waiting to hear back about an appeal lodged with the social security tribunal.

Sanctions on welfare payments which have caused thousands of claimants to fall into hardship are being handed out without evidence that they actually work. The Department for Work and Pensions doesn’t even monitor and analyse its own data, making claims that sanctions “work” from an evidence-free zone. 

There is no evidence that sanctions work as the government insists they do

A report published earlier this year by the WelCond project, led by the University of York and involving the Universities of Glasgow, Sheffield, Salford, Sheffield Hallam and Heriot-Watt, analysed the effectiveness, impact and ethics of welfare conditionality from 2013 to 2018.

The findings of this report’s adds more evidence to a substantial and growing body that welfare conditionality within the social security system is largely ineffective and that benefits sanctions have severe and negative impacts on personal, financial and health outcomes, including mental health.

The report suggests that too much emphasis is being placed on negative consequences for not being engaged in job-seeking activities and not enough emphasis on more positive and individualised work-shaping activities to help people access work that they wish to be in.

In 2016 the British Psychological Society (BPS) and a range of allied organisations (British Association for Behavioural and Cognitive Psychotherapies (BABCP), British Association for Counselling and Psychotherapy (BACP), British Psychoanalytic Council (BPC)), stated a very clear position against welfare sanctions, in response to reports of a lack of efficacy and potential harm to mental health, as outlined in their 2016 joint response

The organisations say that key concerns remain that not only is there no clear evidence that welfare sanctions are effective, but that they can have such negative effects on a range of outcomes including mental health.

They go on to say “We continue to call on the Government to address these concerns, investigate how the jobcentre systems and requirements may themselves be exacerbating mental health problems and consider suspending the use of sanctions subject to the outcomes of an independent review.”

The collective organisations – BPS, BACP, BPC, BABCP and UKCP – are the UK’s leading professional associations for psychological therapies, representing over 110,000 psychologists, counsellors, psychotherapists, psychoanalysts and psychiatrists who practise psychotherapy and counselling.

In 2016, even the government’s technocratic team of behavioural economists and policy gurus at the Nudge Unit did a u-turn on benefit sanctions. They said that the state using the threat of benefit sanctions may be counterproductive”. The idea of increasing welfare conditionality and enlarging the scope and increasing the frequency of benefit sanctions originated from neoliberal behavioural economics theories of the Nudge Unit in the first place. 

It’s difficult to imagine how punitive sanctioning – psycho-coercion – which entails the removal of people’s lifeline income which was originally calculated to meet the costs of only basic survival needs, such as for food, fuel and shelter, could ever be seen as “helping people into work.” 

Commons Select Committee inquiry into sanctions 

The Work and Pensions Committee has published a report this month regarding the findings of an ongoing inquiry into welfare conditionality and sanctions. They say: 

“The human cost of continuing to apply the existing regime of benefit sanctions – the ‘only major welfare reform this decade to have never been evaluated’ – appears simply too high. The evidence that it is achieving its aims is at best mixed, and at worst showing a policy that appears ‘arbitrarily punitive’.”  

The Committee say in their report that the Coalition Government “had little or no understanding of the likely impact of a tougher sanctions regime” when it introduced it in 2012 with the stated aim, as the NAO describes it, that “benefits, employment support and conditions and sanctions together lead to employment.”

At that point, the Government promised to review the reform’s impact and whether it was achieving its aims on an ongoing basis. But six years later, Government “is [still] none the wiser.”

In their report, the select committee urge the government to reassess the sanctions regime. However, there is no evidence they ever assessed it in the first place.

Commenting on the Work and Pensions Committee inquiry, Chair Frank Field MP says:

“We have heard stories of terrible and unnecessary hardship from people who’ve been sanctioned. They were left bewildered and driven to despair at becoming, often with their children, the victims of a sanctions regime that is at times so counter-productive it just seems pointlessly cruel.

While none of them told us that there should be no benefit sanctions at all, it can only be right for the Government to take a long hard look at what is going on. If their stories were rare it would be unacceptable, but the Government has no idea how many more people out there are suffering in similar circumstances. In fact, it has kept itself in the dark about any of the impacts of the major reforms to sanctions introduced since 2012.

The time is long overdue for the Government to assess the evidence and then have the courage of its reform convictions to say, where it is right to do so, ’this policy is not achieving its aims, it is not working, and the cost is too high: We will change it.”

Yes, we must.

Related

Pointlessly cruel’ sanctions regime must be reassessed, says Commons Select Committee

New research shows welfare sanctions are punitive, create perverse incentives and are potentially life-threatening


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‘Pointlessly cruel’ sanctions regime must be reassessed, says Commons Select Committee

A protest in Kentish Town, north-west London, against benefit cuts and sanctions.

The Work and Pensions Committee has published a report this month regarding the findings of an ongoing inquiry into welfare conditionality and sanctions. 

The Committee says in the report:“Of all the evidence we received, none was more compelling than that against the imposition of conditionality and sanctions on people with a disability or health condition. It does not work.

“Worse, it is harmful and counterproductive. We recommend that the Government immediately stop imposing conditionality and sanctions on anyone found to have limited capability for work, or who presents a valid doctor’s note (Fit Note) stating that they are unable to work, including those who present such a note while waiting for a Work Capability Assessment. Instead, it should work with experts to develop a programme of voluntary employment support.” 

The report concludes that “The human cost of continuing to apply the existing regime of benefit sanctions – the ‘only major welfare reform this decade to have never been evaluated’ – appears simply too high. The evidence that it is achieving its aims is at best mixed, and at worst showing a policy that appears ‘arbitrarily punitive’.” 

The Committee says the Coalition Government “had little or no understanding of the likely impact of a tougher sanctions regime” when it introduced it in 2012 with the stated aim, as the NAO describes it, that “benefits, employment support and conditions and sanctions together lead to employment.”

At that point, the Government promised to review the reform’s impact and whether it was achieving its aims on an ongoing basis. But six years later, Government “is none the wiser.” 

As one expert witness suggested, “if it was not for the embarrassment, the Government would have suspended Employment and Support Allowance (ESA) sanctions altogether as soon as that National Audit Office finding came out that sanctioned ESA claimants were less likely to get into work.”

Some groups ‘disproportionately vulnerable’

The report highlights that single parents, care leavers and people with a disability or health condition are disproportionately vulnerable to and affected by the withdrawal of their benefit. The Committee says that “until the government can show unequivocally that sanctions actually help to move these claimants into work, it cannot ‘justify these groups’ continued inclusion in the sanctions regime’.

In the meantime, and until that positive link is proven, people who are the responsible carer for a child under the age of 5, or a child with demonstrable additional needs and care costs, and care leavers under the age of 25, should only ever have a maximum of 20% of their benefit withheld.”

The report authors go on to say: “The Department for Work and Pensions (DWP) must urgently evaluate the effectiveness of the reforms to welfare conditionality and sanctions since 2012, including their impact on people’s financial and personal well-being.

“Until the Government can point to ‘robust evidence that longer sanctions are more effective’, higher level sanctions should be reduced to 2, 4 and 6 months for first, second and subsequent failures to comply”.

The report goes on to say: “Government should also “immediately stop imposing conditionality and sanctions on anyone found to have limited capability for work, or who presents a valid doctor’s note” stating they cannot work. Instead, it should work with experts to develop a programme of voluntary employment support for those who can get into work.”

Sanctions have no effect on in-work claimants

Randomised Controlled Trials have shown sanctions had no effect on in-work claimants’ outcomes, and work coaches are not yet equipped to get enough decisions right. Sanctioning people who are working is too great a risk for too little return. DWP should not proceed with conditionality and sanctions for in-work claimants until full roll-out of Universal Credit is complete, and even then, only introduce sanctions on the basis of robust evidence that it will be effective at driving progress in work. 

Comment from Work and Pensions Committee Chair Frank Field MP

 “We have heard stories of terrible and unnecessary hardship from people who’ve been sanctioned. They were left bewildered and driven to despair at becoming, often with their children, the victims of a sanctions regime that is at times so counter-productive it just seems pointlessly cruel.

While none of them told us that there should be no benefit sanctions at all, it can only be right for the Government to take a long hard look at what is going on. If their stories were rare it would be unacceptable, but the Government has no idea how many more people out there are suffering in similar circumstances. In fact, it has kept itself in the dark about any of the impacts of the major reforms to sanctions introduced since 2012.

The time is long overdue for the Government to assess the evidence and then have the courage of its reform convictions to say, where it is right to do so, ’this policy is not achieving its aims, it is not working, and the cost is too high: We will change it.”

The Work and Pensions Committee are currently looking into the Government’s plans for moving people who are already claiming benefits onto Universal Credit, which merges six “legacy” benefits into one, single, monthly household payment. The Government calls this “managed migration”. The Committee is also looking at the impact of the changes announced by the Government in the 2018 Budget.

Most recent evidence session: 24 Oct 2018 – Work and Pensions Committee – oral evidence | PDF version (268 KB) | Published 27 Oct 2018.

Evidence given by Steven McIntosh, Director of UK Poverty Policy, Advocacy and Campaigns, Save the Children, Dalia Ben-Galim, Director of Policy, Gingerbread, Joe Shalam, Researcher, Centre for Social Justice, Jonathan Broadbery, Head of Policy and External Relations, National Day Nurseries Association Gaynor Rowles, Hairdresser, Lucy Collins, Beauty technician, Vikki Waterman, Administrator, Thuto Mali, full time mum.

Watch this evidence session.


Related

New research shows welfare sanctions are punitive, create perverse incentives and are potentially life-threatening

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MPs ‘left with no option but to vote down’ unscrutinised new Universal Credit regulations

Related image

Over recent months, MPs on both sides of the House of Commons have pleaded with the Government not to go ahead with transferring claimants from existing benefits to the much troubled Universal Credit until it can guarantee that every claimant would be migrated safely onto the new benefit and none would be left without money. 

Today (4 November) the Commons Work and Pensions Select Committee is publishing correspondence with Alok Sharma MP, Minister of State for Employment (see below), about the Government’s plans for moving people claiming existing benefits onto Universal Credit, ahead of new rules on so-called “managed migration” being laid in Parliament. The Government announced in October that “managed migration” of claimants on to Universal Credit, originally intended to begin in early 2019, would be pushed back.   

The Government’s original plans have been widely criticised by front-line charities and others, with predictions that vulnerable people could be plunged deeper into poverty and even that some people entitled to benefits could be left with no income whatsoever. The rules have been subject to a review by the Social Security Advisory Committee (SSAC), who presented their report to DWP earlier in the autumn.

Minister refuses request to share new rules on Managed Migration

In a hearing on 18 October, the Committee asked the Minister to commit to sharing the new version of the rules with the Committee before it was formally given to Parliament, to allow the Committee to determine whether the serious concerns already raised about the plans, including in evidence to the SSAC, have been addressed. In the response being published today the Minister refuses that request. 

The Chair has urgently written again to the Minister (also attached), saying: “Given the strength of the concern about the draft regulations published in June… we can only hope that the revised version has changed beyond recognition […] if the Government has accepted the SSAC’s advice, and has fully addressed the very serious concerns expressed to the SSAC during its consultation, then our scrutiny could be very quick and need not cause any significant delay. Might I therefore ask please whether you could urgently reconsider this decision?”

Chair’s Comment

Comment from Work and Pensions Committee Chair Frank Field MP:

“Having got it so disastrously wrong with its first attempt, you’d think that the Government would want to make sure its plans to move vulnerable people onto Universal Credit stood up to robust scrutiny. Instead, it is choosing to push these regulations through Parliament with no chance for MPs to make amendments. 

That hardly inspires confidence that it has really made the changes needed to ensure that its actions won’t plunge people deeper into poverty. If its new plans don’t have enough safeguards to protect the vulnerable, then MPs will be left with no option but to vote them down.”

See: 

Image result for scrap universal credit


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Research confirms the government is creating a hostile environment for people claiming disability benefit

A protest by disabled people against benefits cuts

A recent research report launched last month by anti-poverty charity Zacchaeus 2000 Trust (Z2K) reveals the devastating impacts that the government’s welfare reforms are having on the lives of people who are disabled or severely unwell. 

Those benefits that were supposed to provide support for disabled people – Employment and Support Allowance (ESA) and Personal Independence Payment (PIP) – are leaving hundreds of thousands of disabled and unwell people wrongly assessed and denied the vital Social Security benefit they are entitled to. Without this essential income, many people are pushed into debt, face rent arrears and eviction and have to rely on food banks to survive.

Poor design and implementation of the assessments means PIP and ESA are failing, forcing ill and disabled people to go through arduous and distressing reviews and appeals processes just to access the payments they are entitled to. The numbers of people who are wrongly assessed and let down by the system are likely to be much higher than official appeal figures suggest.

The report, Access Denied: Barriers to Justice in the Disability Benefits System, shows some of the hardship, harm and distress this causes – and the long and difficult process people have to go through to finally get the support they deserve.

“For the past two years I’ve been surviving on foodbanks, borrowing money and well-wishers helping me. Even now I’ve got over £8,000 debts to pay people.” Kalifa, ESA claimant

“I went to see my doctor and I said ‘I can’t stand this anymore.’ I would wake up in the middle of the night worrying about this.” Darren, PIP claimant

After being wrongly turned down at assessment, claimants must first go through Mandatory Reconsideration (MR), which can take anything from a few days to several months. The Department for Work and Pensions (DWP) argues that claims are fully reviewed at this stage, but the fact that 69 per cent of claimants win their appeal after having gone through MR proves that the MR itself is failing to correct the assessment’s flaws.

While those who reach the appeal do eventually receive a fair hearing, the arduous process means many never make it to this stage. Drastic cuts to legal aid mean countless ill and disabled people cannot get the legal support and representation required – and which significantly improves chances of success: 88 per cent of the clients Z2K itself supports win their appeal. The Government’s cuts to legal aid and reduced local funding for advice charities means many disabled people are losing out purely because they cannot afford private legal advice.

Raji Hunjan, CEO of Z2K, said “The whole appeal process – and the months of financial and emotional hardship people have to go through to get there – could be avoided if DWP got assessments right in the first place.

“Instead of creating such a hostile environment for those who are disabled, and assuming everyone is trying to cheat the system, ministers urgently need to recognise the reality of people’s disabilities and illnesses and give them the support they deserve.

“That means fixing the assessments, fundamentally improving MR and reinstating legal aid for disability appeals.”

The report recommends clear changes to the assessment, MR and appeal stages, in order to ensure that disabled and unwell people no longer have to suffer to get the payments they are entitled to.

  • DWP and its contracted assessors must start recording all ESA and PIP assessments to ensure an improvement in their accuracy;
  • DWP should introduce a new quality management framework for its contracted assessors and meaningful penalties to hold those companies to account for the quality of their work;
  • If DWP will not commit to reforms to the Mandatory Reconsideration (MR) stage to ensure it corrects inaccurate assessments, MR should be scrapped and claimants should be allowed to go straight to an appeal hearing at the Tribunal;
  • The Government should reinstate legal aid for disability benefits appeals.

Access Denied: Barriers to Justice in the Disability Benefits System illustrates the many barriers to justice that disabled people face, and highlights the potential solutions. It is based on in-depth research with Z2K’s clients, whose claims for ESA and PIP have been rejected – despite them having severe illnesses and disabilities.  Their stories reveal not only the serious flaws in the assessments, but also the personal impacts and enormous obstacles people face in challenging the assessment decision.

You can read the press release here.

The research findings come in the wake of the recent report from the National Audit Office (NAO), which says the Department for Work and Pensions (DWP) has underpaid benefits to the tune of £1.7bn over the last year, while official errors have also seen a significant rise in over-payments.

Underpayments now account for £1.7 billion of government welfare expenditure, while over-payments have soared to a record £3.7 billion.

The report exposes the shocking extent of departmental errors and layers of Kafkaesque bureaucracy, with the chairman of the Commons Work and Pensions Committee describing the current welfare system as “a pinball machine”.

Frank Field, told the Press Association: “It’s like a pinball machine, the payments system – you might get an overpayment, you might get an underpayment.

“Lots of people are not being paid Universal Credit when they should be, causing hardship, and the same department is overpaying others – what is going on?”

But the data shows that while Universal Credit has the highest level of over-payments, at 7.2%,  has the greatest amount of underpayments at 3.7%. That figure does not include those denied PIP and who are forced to ask for Mandatory Review and then appeal.

The research also comes as Sarah Newton belligerently denied in parliament that disabled people claiming support face a politically designed hostile environment, and the Work and Pensions Secretary, Esther McVey, faces mounting calls to resign, after falsely claiming that an NAO report suggested that the roll-out of Universal Credit should be “accelerated.” 

The UK government’s treatment of disabled people has been extremely controversial for many years, with the United Nations accusing ministers of “grave and systematic” violations of disabled people’s human rights following their extensive inquiry.

But despite the many concerns, challenges, presented empirical evidence and official rebukes of the government’s prejudiced and discriminatory welfare policies, the cruel treatment of sick and disabled people in the UK continues, with ministers dogmatically denying their punitive policies cause any harm and distress, indicating that the government has no intention of making positive changes any time soon.

 

Related

Government guidelines for PIP assessment: a political redefinition of the word ‘objective’

A disabled man with an inoperable brain tumour has been left without social security support

Esther Mcvey forced to apologise for being conservative with the truth

I’m a disabled person and Sarah Newton is an outrageous, gaslighting liar

 


I don’t make any money from my work. I’m disabled through illness and on a very low income. But you can make a donation to help me continue to research and write free, informative, insightful and independent articles, and to provide support to others. I co-run a group that supports disabled and ill people going through ESA and PIP claims, assessments and appeals.

Any donation is very much appreciated – thank you.

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The DWP are being Conservative with the truth, yet again

Sarah's story: Turned out to be fiction rather than fact

Sarah’s story: Turned out to be fiction rather than fact


In 2015, Welfare Weekly exposed the Department for Work and Pensions for using fake testimonies from fake characters via a well-placed freedom of information (FoI) request, revealing that the lengths that the government is prepared to go to justify extremely punitive policies. Remarkably, even the 
Chartered Institute of Public Relations (CIPR)  were alarmed at the level of deception, and said it had written to all of its members who work at the Department to find out whether they had played any part in putting the leaflet together. 

Sarah Pinch, the CIPR’s president, said: “Falsely creating the impression of independent, popular support is a naive and opaque technique which blatantly disregards the CIPR’s standards of ethical conduct. It is deeply disappointing if public relations professionals allowed it to be published.” 

This happened during the same month that the it was only this month that the UK statistics watchdog censured the DWP for understating the scale” of its sanctions regime – essentially failing to release adequate data to give jobseekers or the public a genuine picture of the way it’s imposing sanctions, and of monitoring the real impact of this draconian policy. The revelation that the DWP has faked information to distort the reality that so many citizens face is reflective of how deep the rot is in the entire system. 

Then there are the fictional statistics. Iain Duncan Smith was rebuked by the Office for National Statistics (ONS) for the ‘misuse’ of benefit statistics  his claim that 8,000 people moved into work as a result of the benefit cap is “unsupported by the official statistics”, says the UK Statistics Authority. 

In letter to Duncan Smith, Andrew Dilnot writes: “In the manner and form published, the statistics do not comply fully with the principles of the Code of Practice, particularly in respect of accessibility to the sources of data, information about the methodology and quality of the statistics, and the suggestion that the statistics were shared with the media in advance of their publication.”

Another claim by Duncan Smith later in the same month also drew criticism and a reprimand. The (then) minister said around 1 million people have been stuck on benefits for at least three of the last four years “despite being judged capable of preparing or looking for work”.

However, the figures cited also included single mothers, people who were seriously ill, and people awaiting testing. Grant Shapps was also rebuked by UK Statistics Authority for misrepresenting benefit figures the Tory chairman claimed that “nearly a million people” (878,300) on incapacity benefit had dropped their claims, rather than face a new medical assessment for its successor, the employment and support allowance.

The figures, he claimed, “demonstrate how the welfare system was broken under Labour and why our reforms are so important”. The claim was faithfully reported by the Sunday Telegraph  but as the UK Statistics Authority confirmed in its response to Labour MP Sheila Gilmore, it was entirely fabricated.

In his letter to Shapps and Duncan Smith, UKSA chair Andrew Dilnot wrote that the figure conflated “official statistics relating to new claimants of the ESA with official statistics on recipients of the incapacity benefit (IB) who are being migrated across to the ESA”. Of the 603,600 incapacity benefit claimants referred for reassessment as part of the introduction of the ESA between March 2011 and May 2012, just 19,700 (somewhat short of Shapps’s “nearly a million) abandoned their claims prior to a work capability assessment in the period to May 2012. 

The figure of 878,300 refers to the total of new claims for the ESA closed before medical assessment from October 2008 to May 2012. Thus, Shapps’s suggestion that the 878,300 were pre-existing claimants, who would rather lose their benefits than be exposed as “scroungers”, was entirely wrong. Significantly, there is no evidence that those who abandoned their claims did so for the reasons ascribed by Shapps.

Now the DWP have been found out submitting fake claims to the Work and Pensions Committee. The DWP claimed the Institute for Fiscal Stdies (IFS) had reviewed its data which asserts that UC will help more than 250,000 people into employment, once the flagship welfare reform is fully implemented across the UK. However the IFS have contradicted the claim, leading to heavy criticism regarding the DWP’s statement and ‘evidence’ regarding Universal Credit’s ‘causal relatonship’ with employment. 

The Committee says:

“A central part of the Department for Work and Pension’s (DWP) case for the benefit of Universal Credit (UC) is their assertion of its effect on employment. In to a request for an estimate of the magnitude of that effect, DWP stated it has “determined” that UC will result in 250,000 more people in employment once it is fully implemented.

How the Department ‘arrived’ at these figures

In a follow up letter to Employment Minister Alok Sharma (PDF PDF 1.38 MB)Opens in a new window the Chair asked a set of specific questions about how the Department had arrived at each of the stated constituent parts of that figure:

  • 150,000 more due to “increased financial incentives to work” 
  • 50,000 more due to “increased conditionality”
  • 60,000 due to “simplification of the benefit system”

(That’s basically euphemisms for cuts, sanctions, and more cuts and sanctions)

The Department’s response (PDF PDF 800 KB)Opens in a new window did not answer any of the Chair’s specific questions, although it did supply an account of academic research papers that have informed the Department’s work on UC, and restated the principles underlying those three ostensible benefits of the reform.

DWP concluded by stating: “The approach to our analysis underpinning these estimates was reviewed by the Institute for Fiscal Studies.”

Accordingly, the Committee wrote to the Institute for Fiscal Studies (IFS) (PDF PDF 141 KB)Opens in a new window asking if, in that review, it had found those three estimates reasonable, and what the margin of statistical error might be on the numbers.

The IFS’ reply (PDF PDF 197 KB)Opens in a new window starts out “clarifying the role we had in reviewing DWP’s approach” in coming up with the numbers:

Note that at no stage did we review their approach to estimating the impact of increased conditionality or simplification, to which they attribute 50,000 and 60,000 respectively of the overall 250,000 forecast effect on employment”.

The employment impact of Universal Credit is highly uncertain

The IFS goes on to say: “Neil Couling’s letter to Baroness Hollis on 16 November states that the 250,000 figure is based on the same methodology we reviewed in 2012. For the reasons given above, that can only be true of the element (150,000) which is a result of changes to financial incentives. And we are not in a position to confirm whether and to what extent DWP took on board our comments and implemented our recommended improvements before applying the methodology….”

The employment impact of UC is highly uncertain. The move to UC involves a number of changes for which it is hard to find comparable precedents (especially UK precedents)” — casting doubt on DWP’s use of academic evidence to substantiate its estimates — “It is not even possible to produce statistical margins of error for estimates of the employment impact, as the nature of the uncertainty is not conducive to standard statistical analysis…”

Sadly, it will be difficult even after the event to produce convincing estimates of the overall employment impact of UC. The early impact estimates that DWP have published – cited in the Minister’s letter of 12 March – apply only to a small group of claimants who are not affected by UC in the same way as most other claimants […]” and;

“We emphasise that the overall employment impact of UC will conceal very different effects for different groups in the population, with employment rates likely to rise for some and fall for others.”

The last point contradicts what DWP have previously told the Committee when asked about the impact on other groups:

“We remain committed to producing robust comparative analysis of the employment impacts of Universal Credit. As we informed the Committee we are planning to expand the analysis for single cases in the Live Service to couples and families in both services.

This analysis will estimate a labout market impact for these broader claimant groups. In this instance it is misleading to draw a distinction between two services. The underlying policy for both is the same so any comparative analysis will hold true for both systems”.

Lack of evidence

Rt Hon Frank Field MP, Chair of the Committee, said:

“The ongoing lack of evidence to back up the much-vaunted employment impact of Universal Credit was already extremely disappointing. But to have our specific queries about basis of this claim answered with airy, irrelevant and, it appears, plainly inaccurate assertions adds insult to injury.

The IFS’ letter shows that Old Mother Hubbard hasn’t got much in the cupboard, despite the bragging of the Department. This clumsy and ill-judged attempt to piggyback on one of the most trusted, unimpugnable authorities on public policy and finance would be farcical if it was not so deeply worrying.”

Call it what it is, Frank. It’s just more glib, ideologically driven lies

Image result for Universal credit criticism


I don’t make any money from my work. But you can support Politics and Insights and contribute by making a donation which will help me continue to research and write informative, insightful and independent articles, and to provide support to others. The smallest amount is much appreciated, and helps to keep my articles free and accessible to all – thank you. 

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Frank Field’s letter regarding the DWP’s non-existent/existent data: a Schrödinger kind of paradox

cat schro

The data is only real when someone looks for it

Following on from the article yesterday, (DWP spent £100m on disability benefit appeals over 2 year period), I have copied Frank Field’s letter to Esther McVey below, which highlights the discrepancy between what McVey informed the Work and Pensions Committee when they asked her to provide evidence regarding the costs of disability benefit appeals and mandatory reconsiderations in an inquiry into disability benefits, and the details provided, following a timely Freedom of Information request. 

Key facts

  • Department for Work and Pensions (DWP) spent £108.1 million on Personal Independent Payment (PIP) and Employment and Support Allowance (ESA) reviews and appeals since October 2015
  • Ministry of Justice (MoJ) spent £103.1 million on social security and child support tribunals in 2016/17
  • Around two-thirds of PIP and ESA tribunals have been won by claimants this year
  • More than 300,000 PIP and ESA decisions have been changed at review or appeal since October 2015

Figures obtained by the Press Association through a Freedom of Information (FoI) request show that the Department for Work and Pensions (DWP) has spent £108.1 million on direct staffing costs for ESA and PIP appeals since October 2015.  The cost covers mandatory reconsiderations, an internal DWP review, and appeals to tribunals run by HM Courts and Tribunals Service. 

This staggering amount of money is being spent on the administrative costs of a Department fighting to uphold the outcomes of its own incompetent and deeply flawed decision-making. This is unacceptably leaving thousands of ill and disabled people having to fight to receive lifeline support to which, as the high proportion of successful appeal outcomes informs us, they are legally entitled. Furthermore, when provided with a second chance to remedy incompetent decision-making at mandatory review, the Department has persistently continued to uphold the original flawed decision in many cases. 

Since October 2015, 87,500 PIP claimants had their decision changed at mandatory review, while a further 91,587 claimants went on to win their appeals at tribunal. In the first six months of 2017/18 some 66% of 42,741 PIP appeals went in the claimant’s favour, highlighting that both the original decision-making process and mandatory review are failing to effectively ensure eligibility for support is fairly and accurately assessed.

The figures for ESA since October 2015 show 47,000 people had decisions revised at mandatory reconsideration and 82,219 appeals went in the favour of those let down by the current system of assessment and DWP decsion-making.

It’s as if the system is weighted to refuse as many people as possible their lifeline support.

So far in 2017/18, 68% of 35,452 ESA appeals have gone in favour of the claimant.

Conservative peer Baroness Altmann, a former minister at the DWP, said the money could be spent on benefits for those who need them, rather than on the costs of fighting their claims.

“Disability benefits need an overhaul and, of course, we must not let people make bogus claims, but the extent of the appeals we are seeing clearly indicates that something is seriously wrong with the system,” she said.

Figures released to the select committee’s inquiry show further costs to taxpayers.

The Ministry of Justice says it spent £103.1 million on social security and child support tribunals in 2016/17, up from £92.6 million the year before and £87.4 million in 2014/15.

Around 190,000 cases were cleared with or without a hearing in 2016/17, the Ministry told the committee.

The select committee is due to publish the results of its inquiry into PIP and ESA on Wednesday.

Chair Frank Field has written to Esther McVey, the Work and Pensions Secretary, in the wake of the figures to question why MPs were not given such information.

DWP gave the committee the average costs of a mandatory reconsideration and appeal for PIP and ESA.

However, Field, a Labour MP, said the committee was unable to work out the full cost of the appeals process.

This was because it was told information on PIP appeals was not available on whether they were appeals from new claimants or those being reassessed, which have different costs.

The information released to the Press Association was broken down into costs for new claims and those undergoing reassessments.

Here is Field’s letter:

letter head

From the Chair
                                                                                                                            9 February 2018
Rt Hon Esther McVey
Secretary of State
Department for Work and Pensions

PIP appeal data

During our inquiry on PIP and ESA assessments, your Department kindly provided to us estimated unit costs of MRs and Appeals. This indicated that different costs are attached to PIP appeals depending on whether they relate to new or reassessed claims. 

Seeking to understand the financial implications of appeals for the Department, Committee staff inquired on 30 January: 

Of the 170,000 PIP appeals since 2013, how many were for new claims and how many were reassessments?  

We were duly informed:

The information on the number of PIP appeals is from HMCTS published statistics and this information is not available from HMCTS for new claims and reassessments separately.    

We were therefore unable to estimate the full cost of appeals to your Department, although the Ministry of Justice informed us that in 2016/17 its appeals expenditure was £103 million. 1

It was with some surprise, therefore, that we today received data released in response to an FOI request. This provided estimated costs per month spent on PIP appeals—broken down by new and reassessed claims.

You will be aware that we are shortly due to publish our report. That this data was provided in response to an FOI request, but not for our Report, is doubly regrettable since the key theme of our report is the need to introduce much greater trust and transparency into the PIP and ESA systems.

Might you please explain how this occurred?


1 Cost of Social Security and Child Support appeals, of which the majority relate to PIP/ESA.Franks sig

 

 

 

 

 

 


Related

A critique of the government’s claimant satisfaction survey

DWP spent £100m on disability benefit appeals over 2 year period

Thousands of disability assessments deemed ‘unacceptable’ under the government’s own quality control scheme

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Conservative MPs accuse citizens of ‘scaremongering stories’ about experiences of Universal Credit.

Conservative MP Wendy Morton says Universal Credit ‘helps’ people into work and criticises opposition MPs for ‘scaremongering.’ However, the new benefit has pushed people into debt and rent arrears, with some forced to rely on food banks to survive. It’s difficult to see precisely how a social security benefit that creates those circumstances could possibly help people into work.

The introduction of Universal Credit was aimed at ‘incentivising’ people into work and to work longer hours, by ensuring that for those needing to claim welfare support, the experience was as uncomfortable as possible. Under the Conservatives, social security has been transformed into a system that metes out discipline,  coercing citizens into compliance with state-defined economic outcomes, rather than serving as a national insurance-funded provision to meet people’s basic necessities, should they need it – which was the original intention behind the welfare state. 

The introduction of ordeals and harsh conditionality in the process of welfare administration was designed to ensure that no-one felt secure or ‘entitled’ to claim support. The Conservatives believe provision for meeting people’s basic survival needs when they experience financial disadvantage somehow produces ‘perverse incentives’ that make being out of work a more favourable option than looking for work.

However, much research – both historic and recent – has indicated that unless people are secure in being able to meet their basic needs – which requires having sufficient resources to cover the cost of fundamental necessities such as food, fuel and shelter consistently – then it is highly unlikely they will be able to fulfil higher level psychosocial needs, including looking for work. In short, absolute poverty limits human potential. It’s therefore simply not possible to  punish people out of being poor.  The problem of poverty is structural and material, it doesn’t arise because of some kind of moral, character or behavioural deficit on the part of poor people.

We learned this through the consequences of the punitive 1834 Poor Law, the research of Benjamin Seebohm Rowntree and the later work of Peter Townsend. Rowntree’s discovery was that poverty arises as the result of low wages, which went against the traditionally held view that poor people were somehow responsible for their own circumstances. The Conservatives view is a regressive one. 

The Government has claimed that disciplinary sanctions are a method of enforcing “cultural and behavioural change” of people claiming both in-work and out-of-work social security. This of course assumes that people’s behaviours are a problem in the first place.

Sanctions don’t address the decision-making of employers – who are ultimately responsible for establishing rates of pay and the hours of work for employees – nor do they address exploitation or structural problems, such as political decision-making that results in inequality, poverty, reduced access to opportunity and resources and a deregulated labour market that creates constraints for those looking for work.

Sanctions are one of the government’s draconian methods of ‘making work pay’. This is what Conservatives like Morton mean by ‘helping people into work. She means that people are being systematically punished into increasing their economic productivity, regardless of whether that actually ‘pays’ for them and alleviates poverty. It means that the Government has abdicated responsibility for the consequences of its own policy and decision-making regarding the UK’s socioeconomic organisation, choosing instead to scapegoat the casualties of those policies and decisions.

Furthermore, contrary to the government’s claims, international research has shown that generous welfare provision actually increases the likelihood that people will have a stronger work ethic and be much more willing and able to look for work. 

The Institute for Fiscal Study (IFS) carried out an independent study of Universal Credit and have estimated that the government’s social security reform will cut welfare spending by £2.7bn a year, and will hit working people on low incomes particularly hard. Single parents who work and two-parent households where both work are most likely to lose out, the study found. 

Robert Joyce, an associate director at the IFS and one of the report’s authors, said the long-run effect of the introduction of universal credit would be “to reduce benefits for working families on average – a reversal of the original [stated] intention”.

The Department for Work and Pensions claimed that Universal Credit was “transforming lives across the country, with claimants moving into work significantly faster and earning more than under the old system”. Universal credit would be in all jobcentres by the spring and once fully rolled out it would generate £6.7bn in economic benefit every year.”

It’s certainly changing lives. But not in the way it’s claimed to.

The government have never hidden the fact that they aim to make big savings through their systematic welfare ‘reforms’ (a word that has become a Conservative euphemism for cuts).

The road to tyranny

Last month, the leader of the House of Commons, Andrea Leadsom, was accused by senior Conservatives MPs of paving the way for tyranny, after the government whipped its MPs to abstain on a Labour motion on universal credit. Labour’s motion  passed unanimously despite the concerns of several Conservative rebels, but some Tory MPs were infuriated at being urged by their own party to ignore it.

Leadsom faced criticism from some Conservative MPs because she said the government was not bound by the resolution, which called for the rollout of the controversial welfare changes to be paused.

Valerie Vaz, the shadow leader of the house, pressed Leadsom on the government’s response. She said: “This is where we make the law. This is not a school debating chamber. This is a disorganised government, disrespectful to the house.”

“I know the government didn’t want to hear about people in rent arrears struggling to feed their families when they’re in work, but that’s the reality when government policy is failing.”

Conservative MP Heidi Allen broke down in the House of Commons during the emotional Labour-led debate on Universal Credit on Tuesday, where the government conceded it would finally release the ‘confidential’ reports into the impact of the welfare reform’s rollout. 

The debate came as the government pledged it will make universal credit reports from between 2012 and 2015 available to the select committee in a concession to Labour, but work and pensions secretary David Gauke said they should not be made public. A ruling in August was made by the information commissioner that five of the government’s reports should be released to campaigners because their publication would be in the public interest.

The Government have said they would continue to challenge the reports being released to the public, even though the reports will be given to the committee, after Labour used a parliamentary device called a ‘humble address’ to the Queen, requesting ministers release project assessment reviews conducted into the welfare reform. 

The Information Commissioner’s Office has already said the papers should be published publicly and in full.

Mind you, we are still waiting for the public release of the Health and Social Care risk register, and have been since 2012.

Perish the thought that the Government should value democratic transparency and accountability. Or that it should face the consequences of its own policies and decision-making.

Field had intervened to give Allen a chance to compose herself, saying: “I’m just amazed for the first time I’ve been able to report those events publicly without weeping. 

I’m so affected by them, I’m affected as she is. That’s the debate we’re really having – how do we represent here the desperateness of many of our constituents when many of us feel we can’t offer them hope,” he said.

Earlier Field had said, remarkably, that his constituents were being hit by the cumulative impact of reforms under both Labour and Conservative governments.

He said: “On my last surgery Friday, for the first time ever a gentleman rose after we had spoken, I had tried to persuade him not to commit suicide, such was the desperateness that he saw the future for himself, and I realised the hand that shook my hand was wet. He’d been crying. And the hand that shook my hand was the hand that wiped away those tears.” 

Field also recounted how a charity in his constituency had helped a family who brought in a child that was “crying with hunger”.

The family were so short of money that they had been invited to a funeral by their neighbours so that they could finish the food left by other guests.

Field said: “This is the background of growing destitution that I see in my constituency and against which we have to judge Universal Credit and the debate we’re having today.” 

Labour and some Conservative MPs have repeatedly voiced concern about the long wait faced by fresh claimants to be paid benefits once they apply for universal credit, originally six weeks but reduced to five in last month’s budget.

The concerns about Universal Credit arose because of the harrowing accounts of experiences that MPs have heard directly from their constituents. Charities have also fedback to MPs about the distress and hardship they have witnessed from people going through the system. For example, the Trussell Trust, a charity which provides food banks, said demand had risen in areas where Universal Credit was introduced.

It said at the House of Commons inquiry into Universal Credit: “In 2016-17 food banks in areas of full Universal Credit rollout saw a 16.85% average increase in referrals for emergency food, more than double the national average of 6.64%.” 

Newcastle Council have also said during the House of Commons inquiry: “We think that Universal Credit can place some vulnerable residents at risk of destitution and homelessness.” And the body which manages Newcastle’s council houses said Universal Credit claimants were more than £1 million in arrears on their rent.

Liverpool City Council reported “an increasing number of citizens contacting the service for assistance through local welfare provision, to provide funds for food and other essentials”. 

The council, already dealing with funding cuts, said it was “encountering significant financial losses” because it was having to provide temporary accommodation for people who had been made homeless.

The debate on Tuesday happened because some citizens are experiencing extreme distress and hardship and have reported their circumstances to their MPs. This is, after all, how a democracy works. MPs represent their constituents.

Now more than one Conservative MP has dismissed those citizens’ accounts as ‘scaremongering,’ which is an attempt to deny that those experiences are true, while also denying culpability.

Morton (Conservative MP for Aldridge Brownhills) said Universal Credit, which ‘replaces’ a range of existing benefits including Housing Benefit, was ‘helping’ people find work. However, Universal Credit doesn’t entirely replace the amount that the range of benefits provided to meet people’s basic needs. 

Speaking in the Commons debate about Universal Credit, she said: “It is this Government who are helping people, which is why I am disappointed to have sat through a lot of this debate and heard scaremongering stories from Opposition Members.

I flinch when I hear the government say they are going to ‘help’ people, especially when that ‘help’ is directed at marginalised social groups. Who among us really needs that draconian and Dickensian brand of help?

The Conservatives seem to think that their strictly class-based and ‘helpful’ punishment is somehow in people’s’ best interests. They claim with a straight face that the system of punishing sanctions being inflicted on the poorest citizens is ‘fair’. There isn’t a system in place that punishes people fairly who hoard their wealth offshore, however, causing such damage to the economy that the Government say they were somehow forced to impose austerity on the poorest citizens so the nation could ‘live within its means’. Well, some of the nation. For many don’t have the means to live, now.

It’s not poor people who need to change their behaviours. It is a Government that is happy to preside over growing inequality, increasing absolute poverty and social injustice. It is those very wealthy people who feel they are not obliged to contribute to a society that they have taken so much from. 

The Department for Work and Pensions has said no claimant needed to wait that long without funds, saying emergency payments to cover the period can be requested and received within three days and paid back over 12 months.

Speaking in the debate, Gauke also accused Labour politicians and the media of ‘scaremongering’, which he said was leading families to believe they had no way of accessing help.

However, they don’t have any way of accessing help.

Gauke spoke the language of despots fluently when he said that he was granting the request on an ‘exceptional basis’ and said the reports would only give a partial picture of the policy’s impact, given how it had subsequently ‘been revised.’ He also said he would consider redacting certain information, such as that which is ‘commercially sensitive’, while the documents were being handed over in exceptional circumstances and did not ‘set a precedent.’ 

Field was clearly uneasy about the condition that his committee keep the reports confidential, and said that he would seek guidance from Commons Speaker John Bercow  about “what sense of secrecy or of honour binds us” when the committee finally do get the documents.

Work and Pensions Committee publishes “damning” evidence of the impact of Universal Credit

Image result for universal credit critical

Committee Chair Frank Field MP calls evidence submitted to the Committee by Halton Housing Trust the “most damning” he has ever read on what he describes as Department for Work and Pensions “maladministration.”

Food bank referrals double

The Halton Trust has accumulated over £400,000 of arrears as a direct result of the rollout of Full Service Universal Credit. This means that just 18% of its tenants owe 55% of all its arrears. Over the last 12 months the number of referrals the Trust has made to local food banks has more than doubled.

The Trust reports on the frequent wrong categorisation of benefit claimants’ eligibility for Advance Payments while Universal Credit is being processed.

In a sample of 1,252 tenants the Trust found that the majority of claimants were eligible for a Benefit Transfer Advance as they were moving from a so-called legacy benefit (like Jobseeker’s Allowance) onto Universal Credit. This is paid back during the first 12 months of a Universal Credit claim.

Advance payments issues

Those claimants who were offered Advance Payments were offered a New Claims Advance that had to be paid back within 6 months: the submission details the even bigger financial problems this caused for families. In addition, the evidence reports:

  • The Department for Work and Pensions refuses to amend the recovery period of the Advance Payment, from 6 months to 12 months, even in the instances where they acknowledge that the claimants should have had a Benefit Transfer Advance.
  • Recovery of the Advance Payment commences immediately with the first Universal Credit payment. This means claimants are continuously playing catch up and are instantly put in debt when the repayment is deducted.
  • As the Advance Payment of either kind are recovered directly from the Universal Credit award, they are being given priority over other essential/actual priority outgoings.
  • When Advanced Payments have been provided there is a lack of any explanation to the customer that this includes a personal allowance and housing cost element. In many cases customers are unsure as to what the money they are receiving is for or what the levels of Advance will be.

Personal budgeting advice unavailable

Despite the Department for Work and Pensions advertising the availability of personal budgeting advice:

  • Halton Housing Trust found that this advice was not available to the vast majority of applicants. This is despite it being an essential element for many applicants at the start of the Universal Credit application process.
  • Local Authorities have been awarded funding to offer Personal Budgeting Support. Despite this, the number of referrals made by the Department locally in Halton has been very low.

Lack of coordinated approach

Further examples cited by the Trust include:

  • Many employers choose to pay their employees early before the Christmas period. The Universal Credit regulations consider this as an increase in income and not an early payment. This triggers a review of their claim, with no payments being made until the end of the subsequent month (January).
  • A lack of coordinated approach between the NHS and DWP. The Trust has recently supported a tenant who received a £50 fine for ticking the “JSA” box on a prescription form, because the form has not been updated with a “Universal Credit” option for receiving free prescriptions, and there are no plans to do so 
  • The Universal Credit application prompts a cessation of Healthy Start vouchers if the claimants were previously in receipt along with their legacy benefit. The Healthy Start system does not yet recognise Full Service Universal Credit.

‘Throwing claimants’ finances into chaos’

Committee Chair, Rt Hon Frank Field MP, said:

“It would be difficult to think, in all my period of Chair of the Select Committee, of a piece of evidence that is so damning on the DWP maladministration which is mangling poorer people’s lives. This maladministration is throwing Universal Credit claimants’ finances into chaos.”

See:

“Gig economy” companies exploit workers and are free-riding on the welfare state

Image result for gig economy uk

Deliveroo couriers plan legal action against the food delivery firm to claim better employment rights including the minimum wage, sick pay and holiday.

The 20 delivery riders say they are employees and not, as the company argues, self-employed contractors. In the latest challenge to employment conditions in the gig economy, they are seeking compensation for not receiving holiday pay and for being paid wages below the legal minimum for employees.

The Deliveroo worker’s move follows successful employment tribunal cases brought by cycle couriers at CitySprint, Excel and drivers for taxi app Uber. All three cases found the riders were workers, meaning they are entitled to basic employment rights including holiday pay and the minimum wage, rather than self-employed contractors with no employment rights. 

Uber claimed that its 40,000 drivers in the UK are self-employed, and therefore not entitled to pensions, holiday pay, or other basic employment rights. An employment tribunal in London disagreed, calling Uber’s argument that it was simply a technology company “ridiculous”, and they were relying on “fictions and twisted arguments.”

HMRC is investigating delivery giant Hermes for paying workers less than the minimum wage. Staff receive no holiday or sick pay, and risk losing work if they can’t make their rounds due to illness or lack of childcare.

Some 78 couriers working for Hermes, a company that describes itself as “the UK’s largest nationwide network of self employed couriers”, have subsequently made complaints to Frank Field, the chairman of the House of Commons work and pensions select committee.

It is estimated that falsely classifying workers as self-employed is costing the UK up to £314m per year in lost tax and national insurance contributions. 

A recent study has found that the average self-employed contractor is now paid less than in 1995

The Resolution Foundation – a think tank that aims to improve pay for families – partly has blamed the changing nature of the self-employed workforce. Their report says: “With the introduction and growth of the [so-called] New Living Wage, by 2020 more than 1 in 7 are expected to be paid at or only just above the legal minimum. This increases the need for employers and government to provide personal progression opportunities to get people beyond the wage floor.”

Currently, the government expects individuals to make in-work progression without support, or face financial penalties (sanctions) to their top up Universal Credit. This draconian approach forces unreasonable responsibility onto individuals and their familes, because the problem of low pay is one of exploitative employers and government policy rather than of individual behaviour.

Employers are responsible for setting pay levels and terms. The problem is more broadly one of the key features of neoliberalism, which has led to increasing employment precarity, characterised by insecure, exploitative forms of work. Meanwhile, the organisation of labour and collective bargaining by trade unions are being portrayed as “market distortions” by a government (and a party) that has legislated mercilessly to undermine the basic rights and fair levels of pay for employees.

The Labour party have pledged to reverse the Conservative’s anti-union laws if they are elected June.

The political logrolling of the profit incentive presents us with the most unedifying and hard face of neoliberalism, in which human need is profoundly devalued; the employee is merely availed of as an object of value extraction. The Conservatives certainly don’t value the idea of “a fair day’s wage for a fair day’s work”, despite all their rhetoric about “making work pay”. Over the past six years, we learned that this slogan was only a semantic decoy: a cover for the dismantling of our welfare state by a creeping, unremitting stealth.

The report went on to say that many more people had taken up lower-paid jobs in the so-called “gig economy, essentially self-employed workers taking on a variety of different roles, while the proportion of self-employed business owners with their own staff had fallen. The number of hours worked by the self-employed had also declined.

The foundation said this had limited wage growth before the financial crash, but that pay had been “squeezed” in real terms more recently, falling £100 a week by 2013-14.

Last year, TUC general secretary Frances O’Grady said: “Britain’s new generation of self-employed workers are not all the budding entrepreneurs ministers like to talk about.

“While some choose self-employment, many are forced into it because there is no alternative work. Self-employment today too often means low pay and fewer rights at work.”

The Resolution Foundation’s most recent briefing looks at the final quarter of labour market data for 2016. It says: “Most importantly, inflation has risen rapidly in recent months, weighing heavily on real pay growth – though published pay statistics will take some time to fully reflect this. Well over a third of the workforce are experiencing shrinking pay packets according to the latest figures, in sectors ranging from accommodation to finance and the public sector. Many more will join them in the coming months as inflation continues to rise, with pay across the economy as a whole set to have fallen in the first three months of 2017.

Indeed, our ‘Spotlight’ article notes that real pay in the public sector has likely now begun a fall that could well last for several years. Conversely, private sector pay growth will continue to outpace the headline average earnings figures.”

A Department for Business spokesperson said the government was “committed to building an economy that works for everyone”.

Last year, Damian Green said, in a speech at the Resolution Foundation, that the private sector and voluntary sector “should be more involved in the provision of welfare services”. Green’s endorsement of the “exciting” gig economy and the “huge potential” that it offered came just the month after an employment tribunal found that drivers for the Uber car service should in fact get the minimum wage and paid holiday. 

Green also said: “The Government is a necessary, but not sufficient provider of welfare.” 

Shadow Digital Economy minister Louise Haigh tabled an amendment to the Government’s Digital Economy Bill, New Clause 24, following the tribunal ruling against Uber. 

She said there was still a danger that despite the ruling, Silicon Valley multinationals and other employers could use “loopholes” to break the rules and get around workers’ protections. 

Haigh said: “This is a landmark ruling for workers in the digital economy, and a great victory for the GMB and its members.

“The digital economy was supposed to promise choice and flexibility, but the reality for too many in the sector is that they are overworked, underpaid and exploited by bosses they never meet and who do not even fulfil their basic duties as an employer.

The Work and Pensions Committee report

In a new report the Work and Pensions Committee also concluded that the government must close the loopholes that are currently allowing “bogus” self-employment practices, which are potentially creating an extra burden on the welfare state while simultaneously reducing the tax contributions that sustain it. Increasingly, some companies are using self-employed workforces as cheap labour, excusing themselves from both responsibilities towards their workers and from substantial National Insurance liabilities, pension auto-enrolment responsibilities and the Apprenticeship Levy. 

In an inquiry that has had to be curtailed because of the election, the Committee heard from “gig economy” companies like Uber, Amazon, Hermes and Deliveroo, and from drivers who work with them. The evidence taken painted starkly contrasting pictures of the effect and impact of “self-employment” by these companies.

Companies utlilising self-employed workforces frequently promote the idea that flexible employment is contingent on self-employed status, but the Committee says this is a fiction.

The report

The Committee says:

  • The apparent freedom companies enjoy to deny workers the rights that come with “employee” or “worker” status fails to protect workers from exploitation and poor working conditions. It also leads to substantial tax losses to the public purse, and potentially places increased strain on the welfare state.
  • Designating workers as self-employed because their contract offers none of the benefits of employment puts the cart before horse. It is clear, though, that this logic has taken hold, enabling companies to propagate a myth of self-employment. This myth frequently fails to stand up in court, but individuals face huge risks in challenging their employment status that way.
  • Where there are tax advantages to both workers and businesses in opting for a self-employed contractor arrangement, there is little to stand in the way.
  • An assumption of the employment status of “worker” by default, rather than “self-employed” by default, would protect both those workers and the public purse. It would put the onus on companies to provide basic safety net standards of rights and benefits to their workers, and make the requisite contributions to the social safety net. Companies wishing to deviate from this model would need to present the case for doing so, shifting the burden of proof of employment status onto the better resourced company. 
  • Self-employed people and employees receive almost equal access to all of the services funded by National Insurance, especially with the introduction of the new state Pension, yet the self-employed contribute far less. The incoming government should set out a roadmap for equalising employee and self-employed National Insurance Contributions.
  • The Department for Work and Pensions (DWP) needs to ensure that its programmes and resources reflect the positive contribution that self-employment can make to society and the economy. This may require an expansion of specialist support in JobCentre Plus.
  • The DWP is seeking to support entrepreneurship without subsidising unprofitable self-employment. The existing Minimum Income Floor (MIF) in Universal Credit (UC) does not get this balance right and risks stifling viable new businesses. The incoming Government should urgently review the MIF with a view to improving its sensitivity to the realities of self-employment. Until this is complete, the MIF should not apply to self-employed UC claimants.

Chair’s comments

Frank Field MP, Chair of the Committee, said;

“Companies in the gig economy are free-riding on the welfare state, avoiding all their responsibilities to profit from this bogus “self-employed” designation while ordinary tax-payers pick up the tab. This inquiry has convinced me of the need to offer “worker” status to the drivers who work with those companies as the default option. This status would be a much fairer reflection of the work they undertake which seems to fall between what most of us would think of as “self-employed” or “employed”. 

It would also protect them from some of the appalling practices that have been reported to the Committee in this inquiry. Uber’s recent announcement that it will soon charge its drivers for sickness cover is just another way of pushing costs onto the workforce, to reinforce the impression that those workers are self-employed.

Self-employment can be genuinely flexible and rewarding for many, but “workers” and “employees” can and do work flexibly. Flexibility is not the preserve of poorly paid, unstable contractors, nor does the brand of “flexibility” on offer from these gig economy companies seem reciprocal. It is clearly profit and profit only that is the motive for designating workers as self-employed. The companies get all the benefits, while workers take on all the risks and the state will be expected to pick up the tab, with little contribution from the companies involved.

It is up to Government to close the loopholes that are currently being exploited by these companies, as part of a necessary and wide ranging reform to the regulation of corporate behaviour.”

Uber


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Inquiry into Universal Credit rollout re-launched

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Following compelling evidence of the problems in the rollout of Universal Credit in its recent follow ups the Work and Pensions Committee has re-launched its inquiry and is accepting written submissions.

However, the inquiry was relaunched last month, on 21 February, and the deadline for written submissions is Monday 20 March 2017.

You can submit your views through the Universal Credit inquiry page.

Call for written submissions

The Committee invites written submissions addressing one or more of the following points:

  • How long are people waiting for their Universal Credit claim to be processed, and what impact is this having on them?
  • How are claimants managing with being paid Universal Credit monthly in arrears?
  • Has Universal Credit improved the accuracy of payments?
  • Have claimants reported making a new claim for Universal Credit, and then found that the system has not registered their claim correctly?
  • What impact is Universal Credit having on rent arrears, what effect is this having on landlords and claimants, and how could the situation be improved?
  • Would certain groups benefit from greater payment process flexibility and, if so, what might the Government do to facilitate it?
  • Does Universal Credit provide people in emergency temporary accommodation with the support they need, and how could this be improved?
  • What impact is Universal Credit having on the income and costs of local authorities, housing associations, charities and other local organisations?
  • How well is Universal Support working, and how could it been improved?
  • What impact has the introduction of full Universal Credit service had in areas where it has replaced the live service?

Chair’s comment:

Frank Field MP, Chair of the Work and Pensions Committee said:

“Huge delays in people receiving payments from Universal Credit have resulted in claimants falling into debt and rent arrears, caused health problems and led to many having to rely on food banks. It is bad enough that UC has a built-in six-week wait between someone applying and them receiving their first payment, but we have heard that many have to wait much longer than this. The adverse impact on claimants, local authorities, landlords and charities is entirely disproportionate to the small numbers currently claiming UC, yet Lord Freud has told us he thinks it will take decades to optimise the system. We have therefore felt compelled to investigate UC yet again. We will examine what its impact is on claimants and those local bodies which deal with them, and what Government needs to do to ease the pressure on those worst affected.”

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