Universal credit helpline charges to be scrapped

The universal credit helpline will be made free, along with other Department for Work and Pensions numbers, after Jeremy Corbyn challenged the government last week over the 55p-a-minute charge for people using mobile phones to get help.

David Gauke, the work and pensions secretary, told MPs all charges would be abolished by the end of the year at the start of a grilling by the work and pensions committee about problems with universal credit.

Gauke said the universal credit helpline was an 0345 number, charged at local rate and was not a premium-rate charge, but in the light of the concerns raised he had decided to change it to a freephone number.

“Given the recent attention and concern that this could place a burden on claimants, I have decided that this will change to a freephone number over the next month,” Gauke said.

“It has been DWP’s longstanding position to operate local line charges for benefit inquiry lines, but having reviewed this matter more widely I will be extending freephone numbers to all DWP phone lines by the end of the year.”

The move is a victory for Corbyn after he asked Theresa May about the issue at prime minister’s questions last week.

Later on Wednesday Labour are to hold an opposition day debate in the Commons calling for the rollout of universal credit to be paused. May has held talks with some Tory MPs who say the system is hurting vulnerable families.

Labour hailed the decision over the phone lines. The shadow pensions secretary, Debbie Abrahams, said: “The Conservatives have finally listened to Labour and scrapped the premium phone helpline for claimants.

“Now they need to listen to the calls of charities and councils and back Labour’s motion today to immediately pause and fix the rollout of universal credit before more people are pushed into rent arrears, poverty and homelessness.”

MPs on the committee welcomed the news, with Heidi Allen, a Conservative member, tweeting that this was “a great start to the day”.

MPs went on to press Gauke about the six-week wait experienced by many new claimants before their first payments.

He defended his department, saying advance loans were available to those struggling with their finances and believed the number of people taking up payments would continue to rise.

Allen said advance payments were “papering over the fact that the six-week wait doesn’t work”.

Challenged by by Frank Field, the Labour MP who chairs the committee, Gauke said he was unable to guarantee that further rollout of the system would not require more people to use food banks, though he insisted the use of advance payments should help many people during the six-week wait.

Field told Gauke a food bank in his Birkenhead constituency had warned it would need 15 tonnes of extra supplies for Christmas given the imminent local arrival of universal credit, and asked if this was needed.

Gauke replied: “I’m not going to advise food banks on their assessments.”

Asked if he could guarantee there would not be a surge in food bank use he said he was wary of guaranteeing anything.

What is universal credit?

Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political divide, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits.

How long has it been around?

The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule.

What is the biggest problem?

There is a minimum 42-day wait for a first payment endured by new claimants when they move to universal credit (in practice this is often up to 60 days). For many low-income claimants, who lack savings, this in effect leaves them without cash for six weeks. The well-documented consequences for claimants of this are rent arrears (leading in some cases to eviction), hunger (food banks in universal credit areas report striking increases in referrals), use of expensive credit, and mental distress.

Are there other problems?

Plenty. Landlords are worried about the level of rent arrears racked up by tenants on universal credit. Unchecked, this will lead to a spike in evictions. Claimants complain that universal credit is bafflingly complex, unreliable, and difficult to manage, particularly if you are without internet access. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit.

Gauke also said there would be a “cost implication” of bringing down the waiting period by seven days and public money needed to be prioritised, but it was a possible area for changes to be made in the future.

Gauke and Neil Couling, the DWP’s universal credit programme director, who was also giving evidence, were challenged Field over the lack of available data on how many claimants received their money within six weeks.

Gauke said 81% of claimants received their money on time, and that after 10 weeks 96% of people had been paid in full. This was, however, “raw data” and more detail was not available, he said.

Field replied: “The idea that you haven’t agreed with the national statistics office about the robustness of the data beggars belief.”

The 12 Lib Dem MPs are due to vote against the rollout of universal credit at the end of Wednesday’s opposition day debate, saying the party had lost faith in the flagship welfare system introduced when they were part of the coalition government.

Stephen Lloyd, the party’s work and pensions spokesman, called it a “slow motion car crash” and said he was particularly concerned about housing payments, which now go directly to tenants rather than landlords.

“With the delays in payment we have already seen, many vulnerable people will lose their homes,” he said. “And many landlords will simply stop taking on universal credit tenants, so where are these hundreds of thousands of people supposed to live?”