MSPs call for halt to next phase in the rollout of Universal Credit

The next phase in the rollout of Universal Credit should be stopped until questions surrounding the effect it could have on working people are answered, Holyrood’s Social Security Committee has said.

The committee has called on the DWP to “urgently halt” a benefits pilot scheme that will involve moving 10,000 people from old-style benefits to the newer Universal Credit system.

The so-called “managed migration” of benefits claimants from the old system is due to be tested for the first time in Harrogate this month.

But the Scottish Parliament’s Social Security Committee warned it is “deeply concerned” that people who are moved over to Universal Credit could find themselves facing punitive measures and being financially worse off as a result.

Convener Bob Doris said: “This movement represents a huge cultural shift and we do not believe it is right to sanction the working poor, effectively punishing people for going to their work.”

Universal Credit is a welfare payment that combines multiple “legacy” benefits into one or two monthly lump-sums. The amount of money paid each month will increase or decrease depending on how much the claimant earns through work.

The changes will affect people on a range of benefits including Child Tax Credit and Working Tax Credit, neither of which have been subject to sanctions before.

“The DWP has said they are currently taking a ‘light touch’ approach to in-work conditionality or sanctions but there is little confidence that when the system rolls out more widely that low paid and part-time workers won’t suffer as a result”, Doris said.

Although this pilot will be the first time so many people have been moved onto Universal Credit at once, the new benefits system has been introduced across the UK for people claiming for the first time.

Claimants have also found themselves transferred to Universal Credit because of changes of circumstances, such as finding a job or separating from a partner.

But the introduction of Universal Credit has been controversial, with evidence linking the new benefit to a rise in rent arrears and foodbank use.

“The rollout of Universal Credit has been littered with mistakes” Doris said.

 “It is vital that this latest pilot is put on hold to ensure that there is no negative impact upon claimants who rely on this money.”

The committee held an inquiry into the effect it has on in-work poverty in Scotland, concluding that the managed migration should be halted and that people who are in work should not face sanctions on their benefits.

The DWP did not respond to the committee’s report at the time.

The UK Government has said that claimants in Harrogate will receive “transitional support” to avoid cash loss.

Announcing the new pilot scheme in March, Work and Pensions Secretary Amber Rudd said: “I want to be sure that the switch to Universal Credit is a hassle free process for claimants and everyone receives the personalised service they deserve.”