Universal Credit Delivery
The success of the welfare reform bill depends almost entirely upon the ability of the Universal Credit to change behaviour and get people into work.
Simplification of the welfare system has the potential to reduce both administrative costs (DEL) and total benefit expenditure (AME) by becoming more effective at helping people into work (AME). However, the Universal Credit has to be understood and accessible to claimants to elicit behaviour change. The smoothness of the transition into work and the support provided to job seekers in their first few weeks of unemployment are largely determined by the delivery agency.
People on benefits highlighted the support services at Jobcentre Plus as the most important factor in helping them move into employment, above financial incentives and the local labour market. They also identified the Jobcentre Plus service to be the area most in need of immediate reform.
The delivery of Universal Credit deserves as much consideration as the financial impacts and incentives of claimants.
What would an ideal delivery organisation look like?
An effective delivery organisation will need to provide effective face to face support while controlling costs and be flexible enough to respond to local needs. The organisation race online estimates that up to forty per cent of claimants may struggle to manage their claim through online channels.
‘Of the 10 million people in the UK who have never been online, 47% are from low income families.’ ‘Nearly 50% of adults living in households earning less than £11.5k do not use the internet anywhere – at home, work or in the community’
Face to face contact is necessary to enforce conditionality, and many claimants will need face to face support to manage their claim. Initial face to face contact with an advisor provides an opportunity to ask questions and advisors influence claimant attitudes to work, and frame their search for work. A good advisor can help those that struggle to become more effective at finding work.
Effective delivery should not cost any more. The simplicity of the Universal Credit should free up advisor time to provide effective support, rather than administer benefits. Although treasury concerns over deadweight costs are valid, the government should not aim simply to reduce costs, more effective service delivery could easily pay for its administration costs through a lower benefit bill in the medium and long term.
The public employment service must also be flexible enough to respond to local needs and local labour markets. The type of support needed in London is likely to be different to that in a rural part of the country, while labour market conditions and the needs of local employers change all of the time. Effective support will also need to combine with other local services, for example, GP surgeries, debt advice services, childcare provision, colleges and a range of other organisations that can help with the interconnected challenges that unemployed people often face. An active employment service that responds to the individual needs of each of its clients is likely to be much more effective than the standardised service we have today.
A successful delivery agency would need to be client focused, share the principles of the Universal Credit, and help to move people from welfare into work.
Who are the best candidates to deliver Universal Credit?
The DWP will administer the Universal Credit through telephone and online channels; however the Universal Credit requires a face to face element in its delivery. Face to face delivery is required to help many claimants understand the new system, to enforce conditionality and to provide support and advice to jobseekers.
There are three main candidates in the running to deliver Universal Credit, Jobcentre Plus, Welfare to Work providers and Local Authorities.
Jobcentre Plus will almost certainly play a role in the Universal Credit in October 2013; it is the incumbent and has experience of operating at scale and at enforcing conditionality. There is a case for continuity in delivery, particularly when the system is undergoing a number of other changes. Planned reforms to Jobcentre Plus aim to give advisors the freedom they need to provide a more flexible and supportive service, it is important that they demonstrate improved effectiveness.
Welfare to Work providers are contracted to work with those furthest from work, but are currently not able to help until many months into the candidates job search. They could potentially play a bigger role, as those claimants likely to need intensive face to face support are likely to share characteristics with welfare to work providers’ core client groups. The narrative put forward by the private sector, that they are able to deliver public services cost-effectively, will be tested by the Work Programme, but it is fair to expect that some providers will demonstrate their expertise in service delivery.
Many local authorities can credibly argue that they have an evidenced record of effective delivery in housing and council tax benefit. The best local authorities are heavily invested in their local communities, drive a flexible and responsive service and have a strong record in building partnerships with local stakeholders in the private and voluntary sector. Questions remain over the consistency of local authority provision and of local accountability in managing a complex and essential service; however there is an equally strong case for more local accountability and face to face contact between local authorities and their constituents.
A number of peripheral players may also have the capacity to play a role, such as the post office and other private sector service companies, but this is likely to be in a supporting role if any.
The three main providers all have the infrastructure, expertise and experience to put forward a case for greater involvement. Given the importance of the delivery agency in supporting people into work, those that demonstrate client focus and a commitment to the principles of the Universal Credit are likely to have the advantage.
To have a conversation about your organisations role in delivering Universal Credit, please contact us.