Universal Credit has been blamed for sharp rises in rent arrears and huge increases in the number of people reliant on food banks.
That criticism comes from a House of Lords committee in Westminster, which has called for a major overhaul of the Universal Credit system as it currently exists.
According to the Economic Affairs Committee, reforms of the system are much needed in no small part because it is currently judged to be “failing millions of people, particularly the most vulnerable”.
Members of the House of Lords committee writing the report have said that the five-week wait for initial Universal Credit payments is the key reason why the system has been such a prominent cause of financial insecurity for so many people in recent years.
“This wait entrenches debt, increases extreme poverty and harms vulnerable groups disproportionately,” the committee has said.
Another issue highlighted by the report is that the government has been using the Universal Credit system as a means of recovering around £6 billion of historic tax credit debt.
The view of the committee is that those amounts should be written off because chasing up those sums often serves only to worsen the situations of people who are already deep in financial difficulty.
Among the conclusions of the committee’s report is that the government needs to scale up its investment in Universal Credit if it is to succeed in providing claimants with a truly adequate amount of income.
Lord Forsyth of Drumlean chairs the Economic Affairs Committee and has said that the design of Universal Credit was based on an “idealised claimant” and insisted that it “does not reflect the reality of people’s lives”.
“Most people, including our committee, broadly agree with the original aims and objectives of Universal Credit. However, in its current form it fails to provide a dependable safety net,” Lord Forsyth said.
“It needs rebalancing, with more carrot and less stick, particularly as large numbers of claimants will have ended up on it because of events completely out of their control.”
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