Universal Credit 'is working', DWP insist

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THE Department for Work and Pensions (DWP) says it believes Universal Credit is "working" and provides "statistically significant" improvements over Job Seeker's Allowance.

However, a closer look at the data shows, at this stage at least, it's more a case of Universal Credit not failing, than of it being an overwhelming success.

Universal Credit begins its nationwide rollout this month, and while the DWP acknowledges "new programmes and policies often take time to bed in", they remain positive about its performance so far.

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Their report [pdf] found those who've been moved onto Universal Credit are more likely to enter work, spend more time in work, and earn more than those on Job Seeker's Allowance.

Better, but not by much

It focuses on the initial four pilot areas of Ashton-under-Lyne, Oldham, Wigan and Warrington, which have been running Universal Credit for newly out of work single people since April 2013.

Although the DWP drew glowing conclusions on the success of Universal Credit based on statistical significance, the improvements seen so far are minor.

The report concluded people on Universal Credit were more likely to be in work. But the general pattern of employment over time is very similar for both groups.

As can be seen in the graph below, people on Job Seeker's Allowance and people on Universal credit all had similar increases in employment over the 120-day period of the study.

And those on Universal Credit were not that much more likely to be employed, with just a 3-4% increase.

difference in proportion in work

People did earn more on Universal Credit, but on average it was just £50 more over a 120-day period, about £2.90 a week.

As could be expected, earnings increased for both groups. Again, it wasn't that much more beneficial to be on Universal Credit.

difference in earnings

Lastly, while people on Universal Credit were more likely to spend more time in work than those on Job Seeker's Allowance, the difference was still hardly overwhelming, with only four extra days of employment in 120 days.

difference in days in work

SOURCE: Universal Credit at Work, Spring 2015

While all of these improvements are small, they are still positive and show the new benefit is at least on par with, if not better than, Job Seeker's Allowance.

'Positive' attitudes

Attitudes toward Universal Credit are another important measure of how well it's going. According to DWP, people "tend to be more positive" about Universal Credit than Job Seeker's Allowance.

To get an idea of changing attitudes, people were interviewed in two separate surveys in the north-west of England.

The Pathfinder survey spanned from Autumn 2013 to Spring 2014, and the Expanded Gateway survey covered from 27 November to 23 December 2014.

Those on Universal Credit were slightly more willing to take on any job they could do. They also felt the system was more effective at encouraging them to find work.

attitudes of universal credit

SOURCE: Universal Credit Expanded Gateway Survey, Universal Credit Pathfinder Survey, from Universal Credit at Work, Spring 2015

Those on Universal Credit also spent more time on work-related activities - on average 26 hours per week compared to 17 hours.

However, people's confidence in finding a job didn't change - a sobering fact, given Universal Credit is designed to get people into jobs and off benefits.

More to come

That said, most of the changes directly aimed at getting people into jobs and increasing salaries are still in the trial stages, so it's still not clear how good they really will be at getting people into long-term, good-quality jobs.

One proposed solution is "Universal Support", which would provide help with online access, digital support and managing finances.

Jobcentre Plus offices and local authorities are partnering up to bring this face-to-face support to vulnerable people and those with complex needs.

But before being fully rolled out across the UK, Universal Support will be evaluated throughout 2015. It's currently being trialled in 11 areas.

If successful, Universal Support will go some way to addressing some of the concerns outlined in a recent report by Citizens Advice, which highlighted a need to tackle regional differences in local economies.

Another Jobcentre Plus-led trial will begin in April 2015, with the ambitious goal of helping people on Universal Credit to earn more.

The DWP is attempting to encourage employers to provide more flexible part-time work in the hope to increase the earnings of parents on low incomes.

Secondly, the DWP is assessing the effect of motivation on earnings and whether an increase in motivation can lead to enough of a change in behaviour to prompt people to take on more hours or work overtime.

A long wait

Due to begin its nationwide rollout this month, Universal Credit has already been made available to some people at select Jobcentres since April 2013.

As mentioned, Ashton-under-Lyne, Oldham, Wigan and Warrington were the first locations where newly unemployed single people were bought onto the new system.

In October 2013, the rollout continued to Hammersmith, Rugby, Inverness, Harrogate, and Bath Shotton. Altrincham, Hyde, Stalybridge and Stretford followed in June 2014. Roughly 80 more towns were added by the end of the year.

Couples were added to the trial in select locations in the summer of 2014, and families began to be added from November 2014.

It will take until early spring 2016 until Universal Credit is available nationwide to single people.

If all goes well, it will then be fully rolled out to couples and families, with a completion date for all groups by the end of 2017.

To see the Jobcentres already moved onto Universal Credit click here.

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