Chancellor Philip Hammond today pledged £1bn in an attempt to ease benefits claimants’ transition to Universal Credit (UC).
Bowing to pressure from MPs on both sides of the House of Commons, Mr Hammond used his Budget to announce a package that will be spread over five years.
UC has faced growing criticism from both the opposition and Mr Hammond’s own party, with a joint statement signed by 20 Conservative MPs calling for extra funds before Monday’s Budget statement.
Despite recognising the ‘genuine concern among many members,’ Mr Hammond defended UC as a ‘long overdue and necessary reform’ that replaced a ‘broken system’. He claimed it would ‘help drive growth and employment’ and insisted it was ‘here to stay’.
Mr Hammond also announced that he would raise work allowances by £1,000 per year, claiming 2.4m people would benefit to the tune of £630 – costing the Treasury £1.7bn.
The completion date for managed migration has been pushed back to December 2023.
Councils have been hit financially by the chaotic rollout of UC, with delays in payments to claimants causing them to fall behind on rent and tax bills and, in the worst cases, leading to homelessness.
The reforms have left councils facing additional administration costs, as well as rent and tax shortfalls that are not covered by funding from the Department for Work and Pensions (DWP).
In addition, council funding for Universal Support - the system for helping people to claim money - has been withdrawn after the Government handed responsibility to Citizens’ Advice in a £39m contract from April 2019.
This week’s measures were described by the Treasury as a ‘response to feedback’ following stinging criticism last week from the Public Accounts Committee, which said the DWP was ‘disturbingly adrift from the real-world problems’ caused by the UC rollout.