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‘The Best Sandwiches In London’ – Our AGM And Universal Credit

Behind-the-scenes at our recent AGM, by Victor Willmott, London Catalyst’s Director

London Catalyst held its AGM on one of the hottest days of the year, in a new venue, with three speakers, a new format and the promise of ‘the best sandwiches in London’. A lot to look forward to.

Maggie our Chair of Trustees opened proceedings, welcoming guests to the wood-panelled Georgian splendour of the Art Worker’s Guild, and thanked our members and donors who have supported the charity during the year.

‘For the benefit of all? Implementation and challenges of Universal Credit’

David Finch, Senior Research Fellow at the Resolution Foundation, was our keynote speaker on the topic of Universal Credit (click to view his PowerPoint presentation as PDF).

David opened with findings from a recent study on London’s living standards. The Resolution Foundation have reported that there has been a very large increase in employment levels in London in the last few years.

But strong employment figures mask rising inequalities. Despite the big growth in unemployment, insecure work is still prominent.

Wages in London have been squeezed by -7.3% and it is all due to the increase in employment. New Londoners are doing new jobs, which are low paid.

This set the theme of the day. Universal Credit (UC) is replacing existing working-age benefits; it’s designed to simplify the system and incentivise work. However, the original model has been scaled back and is less generous than envisaged.

David stated that working families and single-parent families are set to lose out.

He also remarked that “if things don’t change, we are expecting the biggest increase in inequality since the 1980s”.

Does UC reflect the reality of people’s lives?

David observed that problems begin when the UC encounters the reality of how people live. It’s difficult for some people to manage with a single monthly payment, being paid one month in arrears, and waiting weeks for their first payment. Childcare costs must be paid up-front then claimed back afterwards. Self-employed people may struggle.

UC was originally intended to be fully rolled out by 2018. It is now expected in 2023. The reform might be good in theory, but it is hugely problematic in practice.

Fundamental to this is a loss of trust in the system because of payment delays and practical problems that have caused real hardship.

 

“We recommend fixing Universal Credit rather than scrapping it”

In conclusion, the Resolution Foundation recommend fixing UC; advocating improving incentives for second earners by introducing a new work allowance, encouraging progression at work, restoring the generosity of the original model and in the longer-term, lowering the taper rate and increasing childcare support.

It was interesting to hear David’s analysis although the impression remained of a system dogmatically and structurally antagonistic to the lives of many of the poorest and disadvantaged in society.

Our second speaker: Helen Hibberd from Hackney Migrant Centre

Helen jointly manages Hackney Migrant Centre, one of the many frontline organisations across London that have received a Samaritan grant from us. She spoke from the heart about people with “no recourse to public funds” (NRPF) and cuts to legal aid.

Many people who have lived legally in the UK for years, have contributed and have children, find themselves caught in a relentless, fee-driven bureaucratic cycle.

“The pressure on services like ours is immense” said Helen as she offered a sobering account of the hoops migrants must jump through and the financial and legal hurdles they face in the continuing ‘hostile environment’.

How is Universal Credit effecting Samaritan grant-holding organisations? Survey results

Alison (our Grants Administrator) shared findings from our recent survey of grantees on their service users’ experiences of UC. We heard that the long delay in receiving the first UC payment has left people with no food to eat, rent arrears, being threatened with eviction, and getting into debt to cover every-day living costs.

Samaritan grants and Universal Credit – our survey results in full

There were other unexpected negative outcomes for the public purse too, notably prolonging people’s hospital admissions:

“Young homeless drinker. Universal credit… is one of the key criteria used by local authorities’ housing teams to determine eligibility. Patient had to stay in hospital while universal credit application was processed.”

Grantees told us about other problems people are encountering with UC, including:

  • Having to claim online (problematic for those with no access to a computer)
  • The sheer inflexibility of the system
  • A lack of landlords willing to take tenants on UC
  • Less money for some claimants under UC
  • Monthly payments causing challenges for those unused to budgeting.

“Care leavers don’t necessarily understand what money is being paid in when, and what it’s designed to cover. This makes them vulnerable to payday loans and other debts as they struggle to make ends meet.”

“To improve the welfare system, we suggest…”

There is clearly much wrong with the implementation of UC and in a spirit of wishful optimism we concluded the AGM by asking for suggestions to improve the system and received the following suggestions:

  • The system failure is a big issue which needs to be addressed from the top
  • UC appears to be shaped around an idea of how people used to live and not how they live now. Everyone going on to UC to be offered a soft loan to smooth transition, a buffer against debt
  • Recipients, especially the older generation, should be offered training and help in IT literacy
  • Border agency, especially that deals with higher education for overseas students, should adopt a ‘customer first’ professional and friendly approach
  • Whereas some communities are better organised, others who are not should be offered support and help through local community groups. A referral could have a flat fee as an incentive
  • There could be more financial abuse in joint accounts and a discrete and anonymous on-line arbitration system could be created alongside a red flagging system for abusive relationships
  • There should be better facility between signing on and receiving money
  • The hostile environment remains and the positive impact of migration could be incorporated into publicity such as recognition that our social care system depends on immigration
  • There must be a greater flexibility with UC
  • The need to submit earnings monthly for low paid self-employed and zero hours’ workers is a disincentive to getting people back into work. A form of self-assessment as for income tax might be considered in the first 6 months
  • It is complex to work out if you would be better off in work and the fear and complexity of the form filling can be a disincentive for very marginal (if any) benefits. A greater range of incentives to try work and build trust could be considered e.g. a credit union savings account, free travel for a month or lunch vouchers
  • There is a real demand for more hours over 16 hours and career progression. Professional training loan fund could be introduced along with more child care
  • More support to fill the gap between thinking of moving to work and getting there. This could involve volunteering and training recognised as skills development and not subject to sanctions
  • NRPF status should be abolished immediately if leave to remain is agreed and there are children or other dependents reliant on the adult
  • Benefits assessors to be compelled to respond to evidence from social care and medical agencies concerning issues such as bed blocking and on-going health conditions
  • Claimants with health and medical conditions should be accompanied at any assessment meeting.

Thanks to all who came along to our AGM

We learnt from David that the UC model may be theoretically sound but is struggling to adapt to how people live. Helen eloquently described the plight of those excluded from social welfare support and Alison revealed the unintended consequences of a system failing to deliver.

The speakers offered food for thought, the venue proved popular, the debate was positive and passionate. And in a straw poll of volunteers one thing was certain: the sandwiches were indeed the best in London.

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