My Lords, my regret Motion relates to the regulations which amend the process of “managed migration”, the means by which DWP plans to move people who are currently claiming legacy benefits to universal credit. Some 2.5 million households receive legacy benefits, with most receiving ESA or tax credits. Some of those households will move on to universal credit over time through “natural migration”
if, for example, their circumstances change. Some will choose to move and some will end their benefit claims altogether. The rest will be moved on to universal credit via a compulsory managed migration process. This was originally intended to be completed by April 2017. It is now due to happen, I believe, by late 2024. Will the Minister confirm if the current aim is still to complete migration of all legacy benefit claims by late 2024?
Concerns about this process have been expressed over many years, both within Parliament and outside. Originally, we all assumed the term “managed migration” meant that DWP would in fact manage the process of transferring people from the current benefit on to universal credit, but that is not what is going to happen. Rather, people will get a letter telling them to apply for universal credit and three months later their benefits will be stopped, even if they have not made an application for UC. If they do not make a successful application within that time, they will no longer be eligible for transitional protection, which is the only guarantee they have that they will not be worse off when they move to universal credit. I will return to this.
The original managed migration regulations were introduced in 2018, but the volume of concern from many quarters, including the Secondary Legislation Scrutiny Committee, led to their being withdrawn. After a couple of false starts, some new regulations were introduced in January 2019. These still, however, did not address some of the key concerns about the migration process.
DWP began testing the migration process in 2019 through a pilot, which was expected to last some 12 months before being evaluated and the process gradually scaled up. Such was the concern that the then Secretary of State undertook to come back to Parliament before the full rollout. The 2019 regulations permitted only 10,000 migration notices to universal credit to be made, after which Parliament would have to vote specifically to extend the migration to the rest of the remaining legacy benefit caseload. However, after only a handful of cases, Covid hit and the pilot was abandoned.
These new regulations remove that 10,000 limit, leaving the Government free to scale up the rollout entirely at their discretion, without any further reference to Parliament. In place of a pilot, DWP is running a “discovery phase”, but there is no transparency about how this will work or what the learning is from it. Without information about success criteria and performance, there is no way for Parliament to hold the Government to account on this hugely complex and vital project. DWP was due to publish an evaluation strategy and a full evaluation for the pilot, but I believe it is not planning to do so for the discovery phase. Is that true? If it is not doing so, will she explain why not?
I commend the Secondary Legislation Scrutiny Committee for its valiant if ultimately fruitless efforts to get DWP to provide more information and answer questions about this new approach. DWP’s case seems to be in essence that it managed lots of new applications very quickly during the pandemic, so it does not need
a pilot to prepare it to scale up. However, as the SLSC points out, it offered no evidence to support that view. It said:
“Our concerns were not simply an issue about gearing up IT platforms and administrative capacity but also about the practical impacts that these changes might have on benefit claimants. DWP has been entirely silent on these issues in the EM for these Regulations”.
The Committee also noted that DWP has no firm plan for achieving transition by the end of 2024, nor does it explain why providing evidence to Parliament after 10,000 notices would obstruct that objective. It said:
“In 2019, the then Secretary of State, Amber Rudd MP, undertook to gather evidence and return with it to Parliament, to seek permission to complete the migration. That undertaking has been overturned by this instrument without explaining either why that promise will not be fulfilled or offering alternative briefing to this House. … In doing this, DWP also removes any obligation to involve Parliament, particularly the House of Lords, in the decision to expand the rollout”.
The Committee then wrote to DWP to ask for further justification for the removal of the cap, but noted that the response it received:
“Does not provide any additional explanation”.
It therefore drew these regulations to the special attention of the House and concluded:
“We therefore still take the view that the House has been given insufficient detail to make an informed decision about DWP’s proposals”.
The Social Security Advisory Committee also took these regulations on formal reference. SSAC is privy to rather more detail than most parliamentarians about DWP’s plans, but its most recent report was still casting doubt on the department’s capacity to meet its ambitions, noting the lack of evidence to back up the information about DWP performance. SSAC was also concerned about the removal of the requirement to return to Parliament at the 10,000 mark. It said in its last report:
“In the absence of such a stage-gate, we are not convinced that the governance arrangements currently in place are sufficiently robust to safeguard against, or put strong mitigations in place for, those risks which have the potential to impact adversely upon up to 1.7 million households and to affect public confidence in the programme”.
Has the Minister’s department been able to satisfy SSAC any further since then?
Coming back to Parliament is not just a matter of protocol. Amber Rudd, as Secretary of State, made that commitment because of widespread concern about the impact this process could have on a very large number of people. Will the Minister tell us the latest figure for the number of people likely to be subject to managed migration? I believe that, as of December 2021, DWP estimated that some 1.7 million claims would be migrated, but that figure may have come down a touch. However, that is a lot of people.
To summarise, I have three main concerns. First, I am concerned about the way the process will affect vulnerable claimants, given that the plan to stop legacy benefits three months after a managed migration notice has been issued is going to operate like a hard stop. DWP’s suggestion that its pandemic experience means that everything will be fine does not answer the question, because the legacy benefit caseload is not the same as the caseload that came on to universal credit during
the pandemic. Almost half of those people, or thereabouts, are claiming ESA, the benefit for people who are sick or disabled. Most of those are in the support group and most have been on ESA for at least five years.
Mind points out that as of last August:
“There are more than 700,000 people with mental health problems, learning disabilities and dementia receiving income-based ESA who will be affected by managed migration”.
Managed migration is therefore going to affect some of the most vulnerable claimants, including many who will really struggle to deal with this process without support. Both SSAC and the Work and Pensions Select Committee have raised concerns about the impact of managed migration on vulnerable claimants. I understand that DWP’s own research highlights similar risks.
DWP says, “Don’t worry, we will support vulnerable claimants through the managed migration process”, but the Minister will be aware that charities in this field are not confident that DWP is always good at being able to identify and support all the vulnerable claimants. CPAG research found that staff do not systematically ask if claimants with a mental health problem require any reasonable adjustments to their service, contrary to the department’s own guidance. We know from some of the terrible cases that hit the newspapers this does not always work the way that it should.
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Have the Government looked again at whether it is possible for the remaining claimants to be moved across rather than having to apply afresh? If not, what assurance can the Minister give the House that vulnerable people will not find themselves left without funds? What additional safeguards are planned to ensure that all vulnerable claimants are identified, and what support will they get? Why does there have to be a hard stop on legacy benefits, and will someone’s universal credit be backdated if they do not apply in time but there has been no gap in eligibility? We need to hear detail. Simply telling us how good the DWP is—even if it is—without offering evidence will not satisfy the House any more than it satisfied the SLSC, SSAC or the Work and Pensions Committee.
Secondly, on the financial impact of transition, the DWP estimates that about 35% of households—probably about 900,000—would be worse off under UC than under the legacy system, so it is offering transitional protection whereby households are guaranteed that they will not be worse off in cash terms at the point of transition if they are subject to managed migration. I think the DWP estimates that around 600,000 households are in that position; perhaps the Minister can confirm that. The thing is, you get the transitional protection only if you are subject to managed migration and if you apply for universal credit within three months of getting your notice that you are subject to managed migration.
Furthermore, this process was designed when inflation was low and stable. Assuming that the Government do not resile from the commitment given by the former Chancellor—shortly to be Prime Minister, if he is not already—to uprate benefits in line with inflation, benefits will rise in April by 10.1%. However, that means that if
you get your managed migration notice in December, so you migrate in January, your benefit will be held at the current level, so you will actually be worse off next year than you are now. However, if you move across in April, you will have already received that 10.1% increase, so your benefit will be held at the higher level when you move across to universal credit. If someone does not apply for universal credit within three months of getting their notice, the plan is to terminate their legacy benefits. If they then apply for UC, they will lose their entitlement to transitional protection. Could their benefits not be suspended instead and, if so, would that allow them to retain access to transitional protection?
Thirdly, has any consideration been given to uprating transitional protection for claimants migrated in 2022-23? Has consideration been given, say, to delaying managed migration until inflation has stabilised? If a claimant is sent a managed migration letter within three months of the end of the fiscal year, will they be advised that their transitional protection could be 10% higher if they transfer at the end of their three-month grace period rather than at the beginning?
Finally, I have two process questions. What is the justification for ditching the pilot and therefore the requirement for Parliament to be given assurance on progress and to vote before the full rollout takes place? Since the regulations ditch the legal requirement to return here before rolling out universal credit, how will the House be informed of what is happening and how can we intervene if things appear to be going wrong?
I have been very grateful to the Minister for giving me access to her officials and for the briefing that they have given me and the conversations we have had. However, I have to say that I remain shocked, not only by the way the Government have decided to cut Parliament out of decision-making on something as big as this but by their refusal to account for actions to the committees set up by Parliament precisely to scrutinise the work of the Executive. I very much hope that the Minister can give a better account to this House tonight. I beg to move.