England & Wales Democracy, devolution and governance, Welfare and equalities

Lord Freud on Universal Credit


On Tuesday 25th June, Lord Freud, Minister for Welfare Reform, provided an update to the All Party Parliamentary Local Government Group on the implementation of Universal Credit. Addressing the room, Lord Freud stated: “Universal Credit will dramatically change the lives of claimants – by simplifying the benefits system and by making work pay”.

Despite speculation about various problems hindering the implementation of Universal Credit (UC), Lord Freud confirmed that the introduction of the programme in Ashton, Bolton and Glasgow in April had proved successful and the programme will be rolled out next month to Wigan, Warrington and Oldham.

Furthermore, Lord Freud commented that the outcomes from the locally-led pilots have proved both exciting and innovative. In Birmingham, for instance, a budgeting tool has been created to allow tenants to create monthly budgets and identify peak periods, whilst in North Dorset, IT training has been set up for those attending job clubs to help them match the skills they need.

The gradual introduction of the scheme, he argued, was crucial to its success. Local authorities would play a vital role in implementing UC by enabling residents’ financial and digital inclusion. The Local Support Services Framework, produced collaboratively with local authorities, sets out the principles for local targeted support for claimants as they move onto the new system.

Whilst Lord Freud spoke with confidence about the programme, concerns and queries regarding its implementation are well known and numerous. The APPG meeting provided an important opportunity for parliamentarians and local government representatives to voice some of these concerns.

A representative from Buckinghamshire County Council questioned the fairness of assessments carried out on individuals with fluctuating conditions to determine whether they are ready for work. In response, Lord Freud said that UC is friendlier to those with fluctuating conditions than the present system, which makes it difficult for people to move in and out of the benefits system smoothly. UC, by contrast, does not have ‘sharp edges’ and enables greater fluidity when moving in and out of work.

Several representatives expressed concern about the risks resulting from the implementation of the direct payment element of UC. They questioned how local authorities, landlords and housing associations would be covered were tenants to default on a payment. One representative added that this was proving a financial deterrent to building additional social housing in his authority.

In response, Lord Freud explained structures would be put in place to guard against such risk. The pilots would be used to inform who should have ‘managed’, rather than direct payments and there will be variety of other options available to tenants, including the option to split payments and make payments more than once a month. He reported that the UC pilots, without intervention, demonstrate an average for arrears of 7%.

A number of additional queries were raised. In each instance, Lord Freud emphasised the gradual nature with which UC was being implemented, and the opportunities for relevant adjustments to be made. Lord Freud commented that the welfare system must individualise, rather than categorise, people. A one-size-fits-all approach will not work.

Certainly such sentiments are hard to disagree with and the emphasis on gradualism may go some way to assuaging council concerns about a hurried introduction of the system. Nevertheless, the discussion after the presentation suggested that some were still left wondering whether the Coalition’s welfare reforms appreciated the varying needs and resources of local authorities and whether UC represented the best way of achieving these ambitions.