Budget 2018: Can the financial investment into Universal Credit make a difference?

In the 2018 Budget yesterday, Chancellor Philip Hammond declared the addition of 6.6 billion pounds over the next 5 years to help us transition from our former methods of welfare payment to Universal Credit. This is with the aim that everyone will complete that transition by December 2023. As a charity who works with disadvantaged communities every day, we are left with one question. Will this truly compensate the people who are nearly or already living in poverty?

Over 1 billion pounds of investment per year certainly shows that the government are taking the impact of Universal Credit somewhat seriously. After all it is quite hard to ignore the voices of almost half a million people who, without intervention, could be driven into poverty by 2020 by the effects of benefits being frozen. Hammond has outlined that the additional investment will reform the work allowance, meaning approximately 2.4 million households with children and people with disability will be able to receive £630 a year before their universal credit starts to be withdrawn.

For the people of Battersea and Wandsworth that use the services of our charity, we have witnessed people struggling as they try and familiarise themselves with a new system, and subsequently are forced into debt due to delays of payments. Therefore, as a charity we would like to see this extra investment compensate those people who have been unfairly affected by the introduction of Universal Credit whilst also creating a more effective system to meet their needs. As we have our fingers on the pulse of our local communities, we are hoping that we can work alongside the council to ensure that this extra investment is being used effectively on the ground and that everyone who needs it can access it.

Many have expressed the concern that this money is a mere plaster covering a deep wound. Other than the usual Labour and Green Party opposition, Conservative MP Heidi Allen also shares this concern, saying that this investment “will only fix the symptoms and not the cause.” She feels all work allowances need to be restored and that the 5-week delay of payment is a systemic issue that needs to be dealt with. We also share this concern, because although investment of money is often necessary to implement changes on such a large scale, it has to be invested in creating a system that works for the people who use it.

At Katherine Low Settlement we have always supported the idea of simplifying the benefits system in order to make it easier for people to get the financial support they need. However, the introduction of Universal Credit has been a rocky ride, and arguably done something quite similar to the opposite of what it had intended. Putting people further into poverty and making it more difficult to get the money they need. We hope that this investment will make a difference in the lives of the people who need it most, but only one thing will tell us. Time.