Chancellor announces £1.5bn changes to Universal Credit

Chancellor Philip Hammond said that from January 2018 people entitled to the benefit would be able to get an interest-free advance of up to a month’s payment within five days and could repay it over a year rather than six months.

 

From February the government will remove the seven day waiting period so that entitlement to Universal Credit starts on the day of application.

 

From April 2018 housing benefit claimants will continue to receive it for the first fortnight of their Universal Credit claim.

 

The Budget document also said the government would make it easier for claimants to have the housing element of their Universal Credit paid directly to their landlord.

 

The package of measures will cost just over £1.5bn from 2017/18 to 2022/23.

 

Mr Hammond said the work and pensions secretary David Gauke would give further information on the changes tomorrow.

 

The measures follow publicity about the difficulties faced by some people on the benefit, particularly new claimants.

 

The government also announced it would increase the Targeted Affordability Fund by putting half, rather than 30 per cent, of the savings from the Local Housing Allowance freeze into the fund. The measure will cost £430m to 2022/23. The fund is aimed at the areas where the difference between the local housing allowance rate and rents has increased the most.

 

In the same speech he said the government would put £28m into three Housing First pilots in the West Midlands, Manchester and Liverpool, which enable homeless people to move straight into a rented home with support rather than move through levels of hostels and move-on housing first.

 

He also said the government would set up a a homelessness taskforce in order to halve rough sleeping by 2022, and eliminate it by 2027.

Councils will also be able to charge a 100 per cent council tax premium on empty homes, he added.

 

UC response

 

Campaign group Child Poverty Action Group said the Universal Credit reforms did not go far enough.

 

Alison Garnham, chief executive of Child Poverty Action Group, said: “We were the first to sound the alarm over the waiting days for universal credit, so we’re pleased the Chancellor has acted to remove them and put in place new arrangements for receiving advances as part of an emergency rescue package.

 

"But this should have been the budget that ushered in much needed structural reform of Universal Credit to revive the central promise to strengthen the rewards from work and that didn’t happen.

 

She said new analysis finds that while effective tax rates may have improved for some families, big falls in family income caused by cuts and changes to Universal Credit have left many worse off overall, overwhelming any gains from increases in the ‘national living wage’, personal tax allowances and help for childcare.

 

"Families on universal credit who want to get better off through earnings gained little from today’s Budget.

 

“What happens to universal credit will shape the future for children in low-income and just managing families. The budgets of ordinary families will not be fit for the future until the work allowances in universal credit have been restored to support parents who want to bring home higher wages.”

 

Gavin Smart, deputy chief executive at the Chartered Institute of Housing, said: “We know that universal credit is causing significant hardship and that the lengthy waiting time for the first payment is a significant problem.

 

"Today’s measures to help people suffering as a result of the delays are welcome. We hope to see further progress on some of the other issues affecting universal credit claimants, including administrative delays and lack of information. CIH wrote to the Department for Work and Pensions to express our concerns back in July and in particular we are urging the government to slow the roll-out down so that it can make sure it gets this vital reform right.”