Publications on the impact of policy on low income households and our proposals for change

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The Children's Society
Policy in Practice were a pleasure to work with and we would definitely work with them in the future.
Lucy CapronThe Children's Society





Missing out: £19 billion of support goes unclaimed each year

Policy in Practice estimates that the total amount of unclaimed income-related benefits and social tariffs is now £18.7 billion a year.

Maximising income through the take up of benefits is essential to support households during the cost of living crisis and prevent further financial crises. Designing an effective safety net that supports struggling families demands an accurate understanding of the level of unclaimed benefits and who is not claiming.

  • We estimate that £7.5 billion of Universal Credit goes unclaimed by 1.2 million eligible households. Caseload take up varies between 70% and 90% for national means tested
  • Take up is lower for locally administered benefits. Council Tax Support is the most underclaimed, with 2.7 million people missing out on £2.8 billion of support
  • Social tariffs are also significantly underclaimed. Broadband social tariffs have the lowest take up, with 97% of eligible households missing out on the tariffs. People on means tested benefits should check for eligibility with their utility providers.
Bevan Foundation logo

A common approach to Welsh benefits: Feasibility study

The Bevan Foundation recognises the significance of grants and allowances provided by the Welsh Government and local authorities to low income households, such as the Council Tax Reduction Scheme and Free School Meals, which offer crucial support alongside the UK social security system.

They have advocated for consolidating these grants and allowances into a unified framework called the Welsh Benefits System. This system aims to enhance accessibility, boost uptake and streamline administration across Wales, ultimately helping to reduce poverty.

To make this vision a reality, the Bevan Foundation, with other organisations, commissioned Policy in Practice to assess data requirements for a unified Welsh benefits approach.

Our findings demonstrate that establishing a Welsh Benefits System is feasible in terms of data and could see millions of pounds worth of unclaimed benefits be put into the pockets of people on low incomes.


Putting the ‘Universal’ into Universal Credit

This report looks at the interaction between taxes and benefits, focusing on two case studies to highlight how Universal Credit supports families.

We look at how their incomes change as their earnings increase, and find that:

  • Out of work support under Universal Credit is inadequate

For families with two children living in an expensive part of the country, the Benefit Cap leaves them with £18,000 (40%) less than their needs as assessed by the benefit system.

  • In work support helps more people than you might think

200,000 to 300,000 higher rate taxpayers are potentially eligible for Universal Credit. This is caused largely by the high cost of housing and childcare.

London Councils

Evaluation of Local Welfare Assistance

Local Welfare Assistance (LWA) plays an important role in providing financial support to households in emergency need. It acts as a safety net to prevent households falling into destitution and to prevent the escalation of crises. LWA schemes are locally defined and are funded by councils on a discretionary basis. Given the pressure on council finances, the long-term viability of local welfare is uncertain without dedicated funding from central government.

Although the role of councils in providing crisis support has expanded in recent years, there has been little accompanying evaluation of the impact of crisis support, or comparison of the design of local provision, to inform the most effective mechanism for supporting residents. In this context, London Councils commissioned Policy in Practice to work with a group of London Boroughs to design and trial an evaluation framework for Local Welfare Assistance. The framework was trialled over six months in 2022 with seven London Boroughs. The evaluation included both data analysis and fieldwork across the seven boroughs.

This report provides the findings of the evaluation and includes recommendations arising from the project.

Centre for Social Justice logo

On Target: Protecting vulnerable households from the inflation crisis

CSJ calls for a 13.3% increase to Universal Credit, to rise by a further 8.5% in January, based on new analysis by Policy in Practice.

Policy in Practice analysed data from over 114,000 low-income households to determine the best course of action amidst the energy crisis. Our analysis for the Centre for Social Justice (CSJ) has been shared with the next Prime Minister and shows that increasing Universal Credit in October will ease the effects of the upcoming energy price rises.

Increasing Universal Credit by 13.3% in October means that support will be proportional to household size, making it better targeted than flat rate support.

The government must also do more to help middle-income households and small businesses. The impact of the unprecedented rise in energy costs is being felt across the board.

Centre for Social Justice logo

Uprating Universal Credit to tackle the cost of living crisis

The Centre for Social Justice asked Policy in Practice to calculate the cost of three policy options to increasing Universal Credit, in order to protect low income households from high and rising inflation.

  • Option 1: Restoring the £20 weekly uplift to Universal Credit
  • Option 2: Increasing elements of Universal Credit, as though they had been uprated by 10% in April 2022
  • Option 3: Restoring work allowances to 2015 levels to help all Universal Credit households in work

This was a rapid response policy costing. While we believe these estimates are reasonable and accurate, they were carried out largely using aggregate figures, rather than detailed micro-simulation modeling of survey or administrative data.

A submission to the Levelling Up, Housing and Communities Committee on the collection of council tax arrears

We welcome this call for evidence on council practices regarding CT arrears collection. Policy in Practice has worked with many councils to design CTR schemes and to target proactive support and to segregate debtors.

Policy in Practice believes that a more uniform and customer-focused approach to CT arrears collection will assist both the resident and the council. In order to achieve this, many councils will need to address, and change, current policies.

The voluntary nature of adherence to guidelines and protocols, and our experience of variation in practice across councils suggests that legislation may be necessary to meet the objective of supportive recovery across all councils.

APPG logo

A submission to the All Party Parliamentary Group on Poverty inquiry into in-work poverty

Through our work with frontline organisations, and through our analysis and research, we understand some of the challenges that low-income households face, including those who are in work.

Our analysis of low-income Londoners found that three in ten low-income working families are in relative poverty. We also found that in-work poverty is likely to rise by 2022 due to the removal of the £20/week uplift to Universal Credit, the introduction of the Health and Social Care Levy and rising living costs.

Aspects of Universal Credit increase in-work poverty by reducing the benefit income of working households and self-employed households are more likely to be in poverty than low-income households who are in regular employment.

Understanding the impact of COVID-19 on the Council Tax Reduction Scheme in Wales

The report focuses on the impact of COVID-19 on the Council Tax Reduction Scheme (CTRS), council tax reduction awards and council tax arrears in Wales.

Conclusions show COVID-19 has increased CTRS caseload and the total value of CTRS reductions. It has also had an impact on council tax arrears in certain local authorities in Wales.

The report also projects the impact of the pandemic as at April 2022.

Bevan Foundation logo

Expanding the provision of Free School Meals in Wales

Covid-19 has seen food insecurity rise for low-income families; more than one-third spent more on food. The current rules for Free School Meals in Wales mean many low-income families are often not eligible as their earnings are considered too high. Our report for the Bevan Foundation and the Wales Anti-Poverty Coalition evaluates the financial cost of extending Free School Meals to all families in receipt of  Universal Credit.

We found that extending provision to children in all Universal Credit households would increase the total cost by £10.5M per year, from £38.9M to £49.5M. This would  allow 99% of families on low-income with children aged between 4-16 to be eligible for FSM, up from 78%.

Greater London Authority

Council Tax debt collection and low-income Londoners

The Greater London Authority (GLA) is interested in further understanding the council tax collection policies of London boroughs. This interest stems from the impact of collection policies on the lives of low-income Londoners and because the collection of council tax is carried out by boroughs on behalf of the mayor’s office.

Specifically, the GLA has commissioned Policy in Practice to undertake an evaluation of flexible, customer-centric debt collection practices for low-income Londoners. This project focuses on deepening the GLA’s understanding of the business case for council tax collection practices that more effectively support low-income households.

Submission to the All Party Parliamentary Group on Poverty concerning the impact on poverty of maintaining the £20 uplift in Universal Credit

This submission presents an analysis conducted by Policy in Practice on the impact of maintaining the Universal Credit £20 a week uplift on households ability to meet all their essential costs. It is based on household level data shared with us by 17 local authorities, which gives us a unique insight into the direct impact of policy changes on tens of thousands of households.

Our analysis shows an extra 224,000 households would be unable to meet all their essential costs in April 2021 if the £20 per week uplift to Universal Credit (UC) was taken away. If these households were not able to meet their essential costs, this would impact 229,000 children within these households.

Trust for London - Tackling Poverty and Inequality

Low-income Londoners: before and after COVID-19

Even before COVID-19 hit, financially vulnerable residents in London on low incomes faced lower living standards due to welfare reforms and the increasing cost of living. New data collected and modelled for Policy in Practice’s Living Standards Index for London shows that whilst emergency increases in benefits in April 2020 have created welcome additional support for low-income Londoners, many were already over-exposed to the financial effects of the pandemic.

In this report Policy in Practice reveals the latest findings from our data-led investigation into the causes and consequences of poverty in London. The project, supported by Trust for London, started in 2016 and, to date, 20 London Boroughs have pooled their data. This has enabled analysis of around 20 million data records, covering over 750,000 low-income households in the capital in the 4 years to date.

Universal Credit, Council Tax Reduction scheme and rent arrears in Wales: final report

The report focuses on the impact of Universal Credit on the Council Tax Reduction Scheme, council tax reduction awards, council tax arrears and rent arrears in Wales. The report also considers the experience of Universal Credit claimants and stakeholders.

Conclusions show Universal Credit is a significant change in welfare support for low-income households. The report provides evidence that the move to Universal Credit is having an impact on household resilience and debt levels of low-income residents in Wales.

There is evidence of lower council tax reduction awards, higher council tax arrears, and higher rent arrears, as households move to Universal Credit. There is also evidence that all forms of arrears could accumulate once households have moved to Universal Credit.

Aspects of Universal Credit, such as the five-week wait, monthly payments and levels of support, risk causing financial difficulty and debt for some claimants. However, it is worth noting that a minority of participating households preferred the control of their claim offered by Universal Credit.

Call for evidence into welfare policy in Scotland by the Scottish Affairs Committee

Policy in Practice welcomed the opportunity to provide evidence to the Scottish Affairs Committee about welfare policy in Scotland. The inquiry examined the effect of welfare policies on the lives of claimants, and poverty and inequality levels more broadly in Scotland.

We found that Scottish welfare policy has protected low-income households from some of the impacts of UK welfare reform. However, there are remaining influences of austerity on claimants within Scotland, such as the 2-child limit. Further work is needed to improve the lives of Scottish low-income families, which will require coordination between Social Security Scotland and DWP during the transition of welfare responsibilities.

Evidence into DWP’s preparations for changes in the world of work

Policy in Practice was pleased to submit evidence to the Work and Pensions Committee’s inquiry into how prepared DWP and its Jobcentre Plus network is for changes in the world of work brought about by new technology.

The Committee asked to hear about the challenges DWP faces as a result of technological change, the extent to which it is already prepared for these, and what further changes might be needed to best support claimants in the future world of work.

Policy in Practice logo

New COVID-19 analysis finds low sick pay may undermine Test and Trace

New research by Policy in Practice shows that low sick pay may undermine Test and Trace as people on low incomes could lose £100’s of pounds if they are asked to self isolate. Some households who are asked to self isolate will struggle to bear the immediate financial costs of relying on Statutory Sick Pay. If their loss of earnings is too great, they may feel they need to return to work, and thereby risk spreading COVID-19.

Greater London Authority

The impact of the COVID-19 Hardship Fund on low-income Londoners

Policy in Practice has been commissioned by the Greater London Authority to analyse the impact of the COVID-19 hardship fund allocations to London Boroughs in order to understand how effective the additional funds will be in helping Londoners to meet their council tax liability.

Our analysis found that, although all London Boroughs will welcome this additional funding, their ability to support residents will vary depending on their current CTR scheme and their current CT charge. This broad approach to allocating the new support will leave individual local authorities with very different amounts of discretionary support.

Greater London Authority

The interaction of COVID-19 measures and the Benefit Cap on low-income Londoners

Policy in Practice has been commissioned by the Greater London Authority to analyse the interaction between the COVID-19 increase in benefits introduced in April 2020 as part of the COVID-19 response and the benefit cap. Our findings show that benefit capped households are set to double. Welcome increases are hitting a static benefit cap yet and thousands of households are missing out.

Evidence into how well DWP has responded to the Coronavirus pandemic

Policy in Practice responded to a survey by the Work and Pensions Committee about how DWP responded to the Coronavirus pandemic. In our submission we shared highlights from our work supporting thousands of claimants from late March to early April 2020. In addition to our evidence, we make three main recommendations to make the benefit system more supportive to claimants, and better able to support the country through this pandemic. We call for the savings limit in Universal Credit to be suspended for the next twelve months, the two-child benefit limit and the benefit cap to be suspended (or at least increased to £2,500 per month) for the duration of the pandemic and the increased generosity of the welfare system to be maintained after April 2021.

Policy in Practice logo

The impact of COVID-19 welfare support measures on household income report

Policy in Practice has analysed the impact of the new measures announced by the government to show how they will help households hit by Coronavirus (COVID-19). As a result of the changes to Universal Credit, the number of households in receipt of Universal Credit whose bills are higher than their monthly income will fall from 16% of households to 10%. The average increase in Universal Credit awards as a result of changes coming into effect from April 2020 will be £98/month, an increase of 7.3%.

The impacts of the three main changes announced up to Friday 20 March 2020 are examined.

The Economics of Universal Credit

Policy in Practice welcomed the call for evidence by the House of Lords Economic Affairs Committee into the economics of Universal Credit and submitted evidence based on our own analysis, alongside feedback and recommendations from the frontline organisations with work with.

Our analysis considered how well has Universal Credit met its original objectives, and whether these the right ones; the economic impact and fiscal entrenchment; which claimants have benefited most from the Universal Credit reforms and which have lost out; how the world of work has changed since the introduction of Universal Credit and whether Universal Credit’s design adequately reflect the reality of low-paid work and how Universal Credit can better meet the lived experience of claimants.

Evidencing the link between the Local Housing Allowance freeze and homelessness

Policy in Practice has been commissioned by the Local Government Association to examine the relationship between the freeze in Local Housing Allowance (LHA) rates and the costs of homelessness to local authorities. The project is driven by the four-year freeze on LHA rates that will end in 2020. It gives an evidence base for the robust correlation of the LHA rate and homelessness costs and the model developed will provide the basis of an interactive modelling tool, allowing the LGA and policymakers to explore the effects of varying the LHA and its impact on homelessness and costs.

Universal Credit, Council Tax Reduction scheme and rent arrears in Wales: interim report

The Welsh Government wants to understand how Universal Credit is affecting families in Wales. Research by Policy in Practice will help the Welsh Government make policy decisions to best support local authorities, and their residents, with Universal Credit. This interim report focuses on the impact of Universal Credit on the Council Tax Reduction Scheme (CTRS) and possible amendments to the scheme.

The Scottish Parliament, Social Security Committee, Benefit take up inquiry

In September 2019 the Scottish Parliament’s Social Security Committee launched an inquiry into benefit take-up. The remit was how take-up for both reserved and devolved social security benefits could be improved, including through benefit automation. The Committee wished to explore what we do, and do not know about what is unclaimed and what can be learned from previous efforts to promote take-up. Policy in Practice welcomed the opportunity to provide written and verbal evidence.

Joseph Rowntree Foundation

Universal Credit and Financial Resilience

Supported by the Joseph Rowntree Foundation, this Universal Credit analysis identifies 7 factors that determine a household’s ability to cope with the transition to Universal Credit. We find that at least 3.3 million households, or 71% of the cohort yet to move to Universal Credit, will face at least one of these challenges. But these factors can often interact and overlap. In addition, we find that at least 1.2 million low-income households, around 26% of the cohort yet to move onto Universal Credit, will face two or more of these challenges. We give 4 recommendations that Government should adopt now: a targeted grant in place of the Universal Credit advance payment, two-week run-on of Child Tax Credit, fortnightly payments of Universal Credit and greater flexibility in processes.

Policy in Practice makes the welfare system simple to understand

White paper: Migration to Universal Credit

This white paper collates previously published analysis and commentary covering some of our work on natural and managed migration to Universal Credit to date. The Guinness Partnership, a Policy in Practice client, is one of a handful of housing providers taking part in the managed migration pilot in Harrogate. A guest blog post, kindly written by Michelle Birley, Customer Support Manager at The Guinness Partnership, titled How Universal Credit Impacts Our Customers And Business, is reproduced here too, along with a case study about how our software helps.

Children's Commissioner logo for Policy in Practice Case Study

The impact of welfare reforms on child vulnerability

Policy in Practice was asked by the Children’s Commissioner to use local authority held household level data to assess the impact of Universal Credit and associated welfare reforms will have on children in low-income households. Our analysis showed a dramatic increase in child vulnerability as a result of welfare reforms.

In addition, we found that the introduction of Universal Credit, the two child limit to benefits and the Benefit Cap combined has meant that the number of low-income families who are struggling to make ends meet has jumped from 13% to 25%. Further, the cumulative impact of welfare reforms is considerably greater than the impact of each reform in isolation, affecting 48% of households who lose £3,441 on average per year.

Evidence submission to Work and Pensions Committee: Natural migration to Universal Credit

Policy in Practice was commissioned by the Work and Pensions Select Committee to examine the impacts of managed migration onto Universal Credit. The Committee was especially interested in households who lose support when they ‘naturally’ migrate from the legacy benefit system to Universal Credit as a result of changes to their circumstances. 

Policy in Practice makes the welfare system simple to understand

Autumn Budget 2018 analysis

Policy in Practice analysed the impact of the budget changes. Our analysis found that almost 250,000 low-income households would move from being worse off under Universal Credit, compared to legacy benefits, to being better off as a result. We also found that Universal Credit does not appear to have a statistically significant impact on employment rates. That said, there is more evidence that any significant impact is more likely to be positive rather than negative.

London Assembly logo

Evidence to the London Assembly: The impact of Universal Credit on the self-employed

On 20 November 2018 the London Assembly Economy Committee met to look at the impact of Universal Credit on self-employed Londoners. Zoe Charlesworth, Head of Policy, and Dr Ben Fells, Senior Analyst, Policy in Practice, gave evidence to the committee.

Policy in Practice has previously presented evidence on the impact of Universal Credit on the volatility of self-employed earnings, and the introduction of the surplus earnings provisions under Universal Credit. For this analysis we concentrated on other impacts; household income, the 2018 budget provision, and the opportunity for targeting of support to affected households. This briefing note summarises some of the key points presented to committee members.

Response to SSAC Consultation: Managed migration onto Universal Credit

In August 2018 we submitted evidence to the Social Security Advisory Committee (SSAC)’s consultation on proposals for moving all existing claimants of a working age income-related benefit to Universal Credit.

We argued that the choice is between delivering a generic managed migration process to all households, versus a much more tailored, personalised approach. We said this opportunity to engage households should be seized, with the ambition not only to help people onto Universal Credit, but also to help people take steps toward independence.

The impact of Universal Credit on employment outcomes

Policy in Practice has been commissioned by the Local Government Association (LGA) to investigate the employment effects of Universal Credit. Our report presents three alternative methodologies to assess employment effects using local authority data. The most promising approaches compare employment outcomes three months after making a new claim or experiencing a change in circumstances under legacy benefits and Universal Credit.

Taken together, the three approaches rule out Universal Credit having a large negative impact on employment; there is more evidence to suggest that the employment impact of Universal Credit is positive, albeit small.

Universal Credit: making it work for supported housing residents

As Universal Credit full service is rolled out, supported housing residents are having to make and manage a Universal Credit claim for their personal needs. Riverside, YMCA, St Mungo’s, and the Salvation Army jointly commissioned Policy in Practice to investigate how Universal Credit would need to be adapted to work in practice for residents in short-term supported housing. Policy in Practice has undertaken qualitative analysis, a review of relevant literature and a series of discussions with providers, tenants, welfare experts and government officials.

Trust for London - Tackling Poverty and Inequality

Low Income Londoners and Welfare Reform

With support from Trust for London Policy in Practice has carried out pan-london analysis of living standards, tracking 600,000 low income families across 19 London boroughs over two years. Over 550,000 adults and 350,000 children live in these households, representing 27% of the overall population living in these boroughs. The work is unique in its use of large scale administrative data, linked over time, and its ability to look forward at poverty projections for individual households. We aim to understand the causes and consequences of poverty.

Read more about this work here.

Oral evidence to Work and Pensions Committee: Impacts of the Benefit Cap

Giovanni Tonnutti of Policy in Practice presented to the Work and Pensions Committee on the impacts of the Benefit Cap. We also released a press statement that half of households are failing to escape the Benefit Cap.  Our Low-Income Londoners study found that for every claimant who managed to move off the cap, there is more than one household who is stuck under the cap for six months or longer.

MNDA Motor Neurone Disease

The implications of Universal Credit for people living with motor neurone disease (MND)

The Motor Neurone Disease Association (MND Association) is interested in the impact that Universal Credit will have on people living with motor neurone disease (MND). Policy in Practice has been commissioned to carry out this research and present the findings in a report. 

The report provides a background to Universal Credit and looks in-depth at those elements of Universal Credit that bear most relevance to people living with MND. It examines the Universal Credit claim process, highlights how this differs from legacy benefits, and the resulting impacts on those living with MND. The report makes recommendations that would assist the customer journey for those with MND.

Illustrative case studies that link to the Policy in Practice Better Off Calculator, that enable further modelling of benefit awards for those with MND, are also included.

Consultation response: Eligibility for free school meals and the early years pupil premium under Universal Credit

The Government recently proposed new criteria for eligibility to free school meals under Universal Credit. We welcome both the commitment to ensuring that free school meals are maintained for those on the lowest incomes, as well as the protection measures proposed for those that lose eligibility. However, it is our view that the proposal, as it stands, does not meet the objectives of Universal Credit which is to make work pay. Our consultation response set out our main reservations about the current proposal, together with a suggested solution.

Policy in Practice

Autumn Budget 2017: Briefing option papers on Universal Credit

The briefing papers were created with feedback from practioners and analysis by Policy in Practice. The options in the papers were discussed with DWP and offer a range of suggestions that would ease the transition for the seven million households who will be receiving Universal Credit in the coming years.

Options to reduce the six week wait
More options to improve Universal Credit
Financial Inclusion Commission

Credit where it’s due: overcoming the barriers to mainstream credit with data

Lenders could consider lower income families for a loan if they had access to additional information on earnings and payment history, collected by government. Policy in Practice has been commissioned by the Financial Inclusion Commission to investigate how public sector data can be used to widen access to mainstream credit, and improve the credit files of those who may be at risk of financial exclusion.

The cumulative impact of welfare reform: a national picture

The cost of poverty for local authorities is set to rise as the welfare reform programme continues and more people on low incomes will be in need of support. Policy in Practice has analysed the cumulative impact of welfare reform across Great Britain for the Local Government Association. In light of the complex changes introduced, this work shows the overall impact on local populations and highlights the key challenges for local authorities.

Policy in Practice

The impact of the two-child limit to tax credits

From Thursday 6 April 2017 the amount of Child Tax Credit support available to families across the UK will be limited to two children. Policy in Practice analysed the impact of the two child limit to tax credits rule coming into effect and we find that, from April, a third child born to low income families will miss out on up to £2,780 of tax credit support a year. This change will affect 8,000 families each month. The two child limit to tax credits measure will affect all households with two or more children that have an additional baby after this date. This report details further findings and the methodology used.

Financial Inclusion Commission

Financial Inclusion: Improving the financial health of the nation

Policy in Practice supported the Financial Inclusion Commission to produce a report of its findings. Financial Inclusion: Improving the financial health of the nation brings together the evidence the Commission has gathered from around the country. It identifies the progress made toward financial inclusion as well as the significant gaps that remain and the challenges ahead. The report also sets out a vision for a financially inclusive society and makes recommendations on what steps need to be taken to make this a reality.

Joseph Rowntree Foundation

Universal Credit: Towards an effective poverty reduction strategy

This comprehensive review of Universal Credit finds that Universal Credit will help to reduce poverty through more money in people’s ‘pockets’ and improved ‘prospects’ upon entering work. The report recommends short, medium and long term reforms to Universal Credit to make the policy truly transformative. It was written by Deven Ghelani and Lisa Stidle and supported by the JRF.

Lewisham County Council

Benefit Cap white paper

Policy in Practice’s Benefit Cap White Paper details the approach pioneered by Lewisham Council to help their residents who are impacted by the Benefit Cap, illustrates how the approach is having a real impact on people’s lives, and shares key lessons for other local authorities.

The Children's Society

The right start: How to support early intervention through initial contact with families

The Children’s Society worked with Policy in Practice to produce a ‘how to’ guide to sharing live birth data and principles of a data-sharing agreement which can be adopted and implemented by local authorities.

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