Universal Credit

1. Universal Credit May 2012 Speaker name

2. The welfare reform programme • Key aim of the Government’s welfare reforms • to help people to move into and progress in work, while providing support for those who need it. • Key elements of the reform programme: • The Work Programme – launched in June 2011 • Measures in the Welfare Reform Act including reform of disabled people’s benefits and Housing Benefit reforms. • Regulations containing detailed provisions are now being developed – expect to present them to Parliament in the autumn. Before this, we will engage with key stakeholders on the draft regulations. • Universal Credit is at the heart of the Government’s reforms.

3. Why do we need Universal Credit? we are simplifying a complex system of multiple benefits: the current system has over 10,000 pages of guidance for advisors it is expensive to administer we are making work pay: more help for low income working families claimants will keep more of what they earn improving incentives to increase hours of work simplified system will make moving to work feel less ‘risky’

4. What is Universal Credit? that tackles welfare dependency, poverty and worklessness by making work pay A policy that replaces a complex system of working-age benefits and credits with the Universal Credit and a single set of rules A benefit that together with our employment support programmes, helps people into work A gateway that will help us deliver an internet-age service whilst continuing face-to-face support for those who need it A platform An ambition reforming welfare to transform lives

5. How is Universal Credit different? Universal Credit Current System The welfare system has more than 30 benefits each with their own rules and criteria Universal Credit provides a new single system means-tested support for working-age people who are in or out of work Work incentives can be very low, benefits are reduced to take account of earnings but different benefits have different rules Universal Credit will ensure that work pays. Financial support will be reduced at a consistent and predictable rate and people will generally keep a higher proportion of their earnings Conditionality: some benefit claimants are capable of working but have no obligations to look for work Universal Creditwill personalise conditions according to people’s capability and circumstances Universal Creditis a single monthly payment to each household (Though we will retain the ability to pay more frequently or to split payment in exceptional circumstances) Payments are paid to different adults in a household and for various periods

6. Simplifying a complex systemCurrent system Income related JSA Income related ESA Income Support (including SMI) Working Tax Credits Child Tax Credits Housing Benefit UniversalCredit Personal Independence Payment Disability LivingAllowance Pension Credit, Child Benefit, Carer’s Allowance (will remain) Council Tax Benefit (Localised Council Tax Schemes) Contributory JSA and ESA (still considering how these will work)

7. Making work pay “Universal Credit will mean that people are consistently and transparently better off for each hour they work and every pound they earn.” Iain Duncan Smith, Secretary of State for Work and Pensions • The Government wants families to be able to manage their affairs in a manner that best reflects the demands of modern life, whether in or out of work. • A key aspect of Universal Credit will be that it should mimic work and the receipt of a salary. • Universal Credit is designed to ensure that it is always worth working by allowing people to keep more of their benefit in the transitional period back to work. • Actual rates and tapers to be decided by Autumn 2012.

8. A simpler system with clear work incentives

9. Making work pay - Real Time Information • Universal Credit payments will be reduced in stages, taking actual earnings into account at the time they are received. • Monthly income will be reported by employers through the Real Time Information (RTI) system being introduced by HMRC • RTI will be simpler and less burdensome for claimants and employers; this is a driving factor behind the changes. • RTI pilot was launched on schedule on 11 April 2012 initially with 10 employers in a controlled go live. • HMRC are gradually building up the number of employers involved in the pilot during 2012/13. By March 2013, aim to have around 250,000 employers reporting RTI. • On track for most employers to join RTI from April 2013 and for all employers to be routinely reporting PAYE in real time before Oct 2013. • Universal Credit Programme and RTI are working very closely together on both the technical design and in terms of migration planning, customer insight and communications.

10. Universal Credit Designed and built around real claimant journeys

11. Jack books an interview appointment & uses additional services Jack books an interview appointment and provides information that will be relevant during his interview Jack is also guided to various Universal Credit resources that can help him find and apply for a job These include tailored job searches, a personal skill profile from which he can create an online CV, tips for attending interviews, and available training courses Design focused on claimant journeys

12. Design focused - tested as we build

13. Developing the Delivery Model Since May 2011 we have worked in partnership with HMRC and local authorities to co create the design options for the face to face service delivery from 2013 • DWP National Service Offering • Labour market services • Claimant support • Complex needs • Budgeting support • Visits • Online access • Risk identified • Local Flexibility • Claimant support • Complex needs • Budgeting support • Online access The joint design team established that a national service offering with targeted local flexibility is the optimum solution from October 2013.

14. Universal Credit Digital by Default

15. Universal Credit – why a digital service? • The service will be digital by default because it is better for claimants, staff and taxpayers. It is: • available: not limited to office or contact centre hours • flexible: helping people navigate the system, showing them what they need to see, to do what they need to do • responsive: can be rapidly improved in light of user feedback • informative: giving a single, integrated picture based on up-to-date information, including latest earnings • integrated: developing over time to join up work and benefit services, and forming a core part of government’s online offer • accessible: designed from the outset to meet the needs of a wide range of users. • And it will be digital because the future is digital: • employers expect digital skills for almost all jobs • mobile devices are more prevalent and powerful • people can save money by accessing online services. • But we recognise that some claimants will need help to use the online service - other channels will be available for the minority who need them, mainly phone, but also face-to-face or post.

16. Universal Credit – channel objectives • There’s a four year transition period from 2013 to 2017 • We don’t expect everyone to switch channels on day 1 • 50% of contacts that can be digital, should be digital in 2013 • 80% of contacts that can be digital, should be digital by 2018 • For our claimants IT skills are increasingly important: • It’s cheaper to buy goods and services online • It’s easier to search for work online and move into work • We want to help people to make the change

17. What are we doing to prepare for channel shift? We plan to work across government, private sector and voluntary sector boundaries to create, support and encourage opportunities to deliver the digital message. DWP are increasing activities and support to boost take up of online services, e.g: • through Digital Champions, • Through providing computer access in Job Centres. Public Sector Digital Deal – getting social housing tenants online using customer contacts to deliver ‘digital interventions’ (e.g. when tax credits are claimed) HMRC are introducing iForms this autumn and improving information services on new website Private Sector In partnership with other organisations, such as E-Skills Agency, persuading major employers to support and encourage their people to use work facilities to access online services Voluntary Sector collaboration with Go On to extend our reach to a wider range of delivery partners than we can influence on our own working with voluntary sector who help our claimants providing advice, support and resources to claimants and potential claimants During migration delivering targeted & timed adviceandguidance to claimants on why and how to get online

18. Universal Credit Delivery - Transition

19. Universal Credit – implementation and transition challenge Universal Credit supports people into work and continues support to ensure that work pays. To deliver this we need to: Convert 12 million claims to 8 million household accounts Create a digital platform that both meets the needs of people who are used to managing their lives online, whilst helping claimants who need extra support to get online Ensure the right support for claimants Create a system capable of flexibility and continuous improvement

20. Universal Credit - delivery • DWP will lead delivery, drawing on tax credit and housing benefit expertise. But we are keeping options open for approaches to delivery in the longer term. • DWP and HMRC have announced the sites that will deliver the telephony and processing services for the first phases of Universal Credit from October 2013 • DWP Benefit Processing Centres – Birkenhead, Bolton, Canterbury, Cosham, Glasgow, Sunderland, Wolverhampton, Wrexham • DWP Telephony Contact Centres – Bangor, Bootle, Derby, Dundee, Grimsby, Makerfield, Middlesbrough, Paisley • HMRC sites – Blackpool (Ryscar House), Merry Hill Contact Centre • Telephony and processing sites that are not listed will continue to deliver existing benefits. Further delivery sites will be announced in spring 2013 and 2014.

21. Testing before delivery • Live Innovation Trialling (started in April 2012) • To trial components of the end-to-end Universal Credit service proposition in a live environment with real people in real time Model Office (first took place in April 2012) • A series of incremental, integrated tests in a ‘controlled’ environment that will be built as the Universal Credit system, processes and support products are developed • Pathfinder (planned for April 2013) • An early implementation of Universal Credit – to enable us to learn from experience and build confidence • Will take place in the Greater Manchester and Cheshire area Local Authority-led pilots (2013 focus - planned for summer 2012) • Will test service integration, particularly design of face-to-face service delivery, at local level for improved claimant support and work focus • Prospectus published on LGA website on 26 April for applications by 18 May. Similar initiatives being developed in Scotland and Wales – prospectuses published on 31 May for applications by 9 July.

22. The Universal Credit Pathfinder • Universal Credit will go live in the Greater Manchester and Cheshire area six months before national roll-out in October 2013. The Pathfinder will take place in Tameside, Oldham, Wigan and Warrington from April 2013. • It will enable DWP to test the new simpler, single benefit payment system and its IT with Local Authorities, employers and claimants in a live environment before Universal Credit is rolled out across the country. • Up to 1,500 new claimants are expected to begin receiving Universal Credit each month throughout the Pathfinder, and throughout the initial Pathfinder period about 9,000 households will claim Universal Credit. • It will only apply to certain postcodes in the named areas, and those postcodes and the local authority and DWP offices that will be involved will be announced soon.

23. Migration - key dates Pathfinder Phase 1 Go-Live APRIL 2013 New claims from unemployed claimants start OCT 2013 New claims from in-work claimants start Managed migrations start APRIL 2014 Managed migration activity completed 2017

24. Universal Credit – the right support for claimants • The new service will be straightforward for many – but some claimants will need support to deal with the changes. • Financial Products -we are working with the commercial and social banking (e.g. credit unions) to develop bank accounts that have in-built budgeting capability. • Tailored Support - we are conducting a detailed segmentation of claimant support needs to understand the demand for such support and to help us either build solutions into mainstream support or develop tailored solutions. • Exceptions - for those who will not be able to manage UC, even with support, we are developing an exceptions framework. • Engagement - we have established an external advisory group to help us with this - the Support and Exceptions Working Group, which includes representatives from local authorities, housing and advice organisations.

25. Universal Credit Housing

26. Universal Credit and housing Universal Credit will be paid to claimants who are in work and out of work. As most businesses pay monthly, Universal Credit will also be paid monthly. Claimants will be responsible for managing all household costs, including rent payments. • To help claimants prepare for Universal Credit, we will test key elements of incorporating housing support into Universal Credit whilst protecting the financial position of social landlords • Direct Payment Demonstration Projects will run for a year in six local authority areas

27. Direct Payments Demonstration Projects • Project purpose is to: • Test the impact of various trigger points and safeguards on social landlords • Test safeguards for different groups of people, e.g. trigger points for making payments to landlords, and test budgeting tools for claimants • Evaluate claimant communication strategy and test landlords’ strategies for maintaining financial viability • Participating Local Authority areas: • City of Edinburgh Council and Dunedin Canmore Housing Association • Torfaen Borough County Council and Bron Afon Community Housing and Charter Housing. • Wakefield Metropolitan Borough Council and Wakefield and District Housing • Shropshire Unitary County Council and Bromford Group, Sanctuary Housing, and Wrekin society. • Oxford City Council and Oxford Citizens (part of the Greensquare Group) • Southwark Council and Family Mosaic

28. Universal Credit and Pension Credit • As a result of the introduction of Universal Credit the following changes will be made to Pension Credit: • help with eligible rent. Support for eligible rent for customers over Pension Credit qualifying age will be provided through a new component of Pension Credit called Housing Credit • help with dependent children. A new additional amount will be included in the Guarantee Credit element of Pension Credit for dependent children. • The earliest date that these changes will be incorporated into Pension Credit new claims is currently 12 months after the go-live of Universal Credit e.g. October 2014. • The current planning assumption is that migration of Housing Benefit and Tax Credit information for Pension Age customers will be completed by October 2017. • The intention is that the migration process for pension age customers will be as intervention free as possible. The underlying principle of the migration approach will be to ensure continuity of financial support.

29. Universal Credit Working in partnership

30. How is the Programme working with Local Authorities? (1) • A key partner – we are seeking to utilise their expertise, skills and success to inform the Universal Credit delivery model. • Local Authority groups are represented at various levels within the Programme, including the Senior Stakeholder Board and the Local Authority Transition Working Group. • A number of individual Local Authorities are represented on a range of Universal Credit working groups. • Local Authorities are taking part on the six Direct Payment Demonstration Projects. • Local Authority-led pilots, planned for summer 2012, will test service integration, particularly design of face-to-face service delivery, at local level for improved claimant support and work focus.

31. How is the Programme working with Local Authorities? (2) • Currently undertaking a programme of visits to Local Authorities to • Understand more their role in supporting claimants • Identify expert individuals who can advise the programme • Identify services developed by Local Authorities, such as on line access and financial inclusion. • Visits are also an opportunity to build relationships with Local Authority managers and staff. • Over 120 Local Authorities visited so far. • Working with Local Authorities has so far achieved: • An understanding of how services operate at a local level and the value of local knowledge • Revealed excellent practice amongst Local Authorities in some key areas • Established an extensive network of expertise from Local Authorities and other local partners

32. How is the Programme working with HMRC? (1) • The Universal Credit Programme is working closely with our delivery partners in HMRC: • A dedicated ‘HMRC Business Change Team’ has been established in the Programme to ensure the right people from HMRC are involved with the development of UC and are working together to conduct analyses of the impacts UC will have on HMRC. The overall aim of the team is to ensure that HMRC are ‘ready, willing and able’ to successfully deliver changes needed to launch UC. • The Programme are working in partnership with HMRC, using their experience of the introduction of Tax Credits to ensure UC is designed with a detailed understanding of HMRC customers. This is helping shape policies, customer journeys, migration, IT through to delivery of UC. • Staff from HMRC have been seconded to critical posts to share expertise and best practice from Tax Credits and wider HMRC areas which contribute to the development of the UC Programme. • HMRC Business Change Team are managing relationships so HMRC are engaged at various levels of the UC Programme including stakeholder groups and governance boards.

33. How is the Programme working with HMRC? (2) • To ensure a joined-up approach, HMRC have their own Programme Management Office to co-ordinate inputs to outputs from the UC Programme, e.g. the Business Change Impact Assessment. • Both Departments are working very closely on IT delivery in UC, including the ‘Real Time Information’ system which allows employer and employee information to feed into the calculation of UC. • HMRC are setting up a Model Office to develop and improve processes so customers can be supported through the journey from the stopping of their Tax Credits to moving to Universal Credit. • We are working across Departments to consider the implications of UC on wider tax administration and the impact on business, employers and agents. • We have joint working with Ministers Lord Freud (DWP) and David Gauke (Exchequer Secretary to the Treasury). • Iain Duncan Smith is also involved in chairing senior boards to oversee the Programme.

34. How is the Programme working with Scotland? • Social security is a reserved matter for the GB government, but it interacts with many devolved matters. The Universal Credit Programme is engaging with: • Scottish Government – who are members of the Universal Credit Senior Stakeholder Board. • Scottish Local Authorities – are represented on Universal Credit Local Authority forums, the Convention of Scottish Local Authorities (COSLA) are members of the Senior Stakeholder Board, input from several Scottish Local Authorities to Universal Credit working groups. • The third sector and other stakeholders – for example, in February the Programme will be attending the Scottish Council of Voluntary Organisations annual conference, the Jobcentre Plus Scottish Customer Representative Group. • Scotland is represented in testing of Universal Credit – Direct Payment Demonstration Project in Edinburgh and COSLA has published a prospectus for Local Authority pilots in Scotland.

35. How is the Programme working with Wales? • Social security is a reserved matter for the GB government, but it interacts with many devolved matters. The Universal Credit Programme is engaging with: • Welsh Government – who are members of the Universal Credit Senior Stakeholder Board. • Welsh Local Authorities – the Welsh Local Government Association (WLGA) are members of the UC Stakeholder Board and are also represented on the UC Transition Working Group, and we have visited seven Local Authorities in Wales. • The third sector and other stakeholders – for example, our visits to Welsh Local Authorities have involved meetings with landlords (social and private) and hearing from third sector partners involved in supporting claimants with complex needs. • Wales is represented in testing of Universal Credit – Direct Payment Demonstration Project in Torfaen and WLGA has published a prospectus for Local Authority pilots in Wales.

36. How is the Programme engaging with external organisations? • Stakeholder Strategy in place • Engagement at different levels • Links to appropriate areas within Programmes • Includes engagement at: • Roundtable Senior Stakeholder Forums • Events targeted at areas of design • Local engagement with local stakeholders • Touchbase, e-bulletin

37. Universal Credit Summary and conclusion

38. In Summary • We are making good progress in delivering Universal Credit. • We are building a 21st Century benefits system – designed with flexibility and with continuous improvement from the outset. • We are designing a service based on claimant journeys – involving them and staff in that design from the outset. • We are aware that there are challenges ahead. • We are working with our partners and stakeholders, using their specialist knowledge and skills to understand and meet those challenges, so we design and deliver a successful service for our claimants.