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Universal Credit needs £2bn urgently or will fail

This news post is over 5 years old

Designer of troubled system says it is working but needs urgent cash injection

Universal Credit (UC) needs a £2 billion immediate cash injection if the controversial system is to work, Iain Duncan Smith has claimed.

The former work and pensions minister, and architect of UC, quit the cabinet in protest in 2016 over billions of pounds being syphoned from the welfare budget.

Now Duncan Smith has lent his name to a 27-strong group of MPs calling for an extra £2bn to ensure some groups are not left “significantly out of pocket as a result of the changes."

As it stands 3.2 million working families are expected to be worse off, with an average loss of £48 a week.

Duncan Smith said: “Theresa May stood on the steps of Downing Street and said 'I want to look after those who are just about managing'. Universal Credit is the single best system to get to those. It's better than the tax system, it's better than charitable giveaways.

“The structure works, but we need to put the money in," he said. "I think the Chancellor is listening, and I'm asking him to do that.”

UC merges six working-age benefits into one monthly payment, but has been dogged by delays and administrative glitches. Claimants wait at least five weeks without benefits while transferring to the new system.

It has led to a huge spike in foodbank use as well as welfare advice charities, such as Citizens Advice, struggling to cope with increased numbers of clients seeking help.

People on tax credits and disability benefits will be migrated onto the system next year. Just under seven million households are expected to receive the benefit when it is fully introduced.

Britain’s’ biggest foodbank provider, the Trussell Trust, said the move should be managed more carefully to avoid people falling into extreme hardship.

Data from the charity shows UC is the fastest growing cause of referrals.

Trussell Trust's chief executive, Emma Revie, said: “We’re really worried that our network of food banks 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.”



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over 5 years ago
Sorry IDS, the structure (UC) does not work and it's not simply a case of putting more money in. The structure is fundamentally flawed as it's based on a punitive restrictive approach.
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