Thursday, 4 April 2013

April 1st – no joke!

This week has seen a raft of changes that, taken together, represent the the biggest contraction in the welfare state since its foundations in the 1940s.

Millions of families – the majority being working households on low incomes – are seeing significant real reductions in their incomes. This government is committed to further real cuts in income for years to come. Bankers get bonuses, ordinary working families get battered.

The speed with which the government is moving to introduce Universal Credit is bringing considerable risks. The government had promised that the scheme was to be piloted in four areas starting this month. Now it has suddenly announced that three of those areas won’t start until July. It’s difficult to see how any lessons can be learned for a scheme to be implemented in October.

There is a very real risk that the new computer systems and software for Universal Credit will simply not be fit for purpose and, at best, there will be insufficient time to sort out any glitches. Further, the transition to Universal Credit almost certainly leaves the system more vulnerable to fraud.

Direct payment of rent to tenants rather than to landlords is almost certain to increase rent arrears, as families under financial pressure will find it difficult to resist the temptation to use their rent cash as an alternative to a pay-day loan. I don’t know of any council – of any political persuasion – or housing association which hasn’t increased its provision for rent arrears.

It is also inevitable that there will be huge confusion from the separation of housing and council tax benefits. I think people massively under-estimate the number of households and families who come in to and out of eligibility for various benefits during the course of any year. This is only going to increase as the number of temporary and short-term jobs increases.

It’s difficult to believe other than that there will be a very big rise this Autumn in the number of families who will be contacting MPs, Councillors and advice bureaux wanting urgent assistance with their benefit problems.

No, April 1st is no joke this year.