I thank the noble Baroness, Lady Sherlock, for raising this Motion, and noble Lords for their contributions. I
would also like to thank representatives of the Secondary Legislation Scrutiny Committee and members of the Social Security Advisory Committee for their detailed scrutiny of these regulations and for reports relating to their assessment of the impact of these regulations. We have continued ongoing dialogue with SSAC. From the meeting we had with the noble Baroness, Lady Sherlock, we were able to confirm to her that we were in a much better place with SSAC and the committee.
I will endeavour to answer all the questions, because I want to, but I am sure that there will be some things that I have to write about. I ask noble Lords to allow me to do that. Because of the technical nature and depth of the questioning, it is very important that I get those things right. I should also say that we had a pre-brief meeting with the noble Baroness, Lady Sherlock, and I am happy to put on record that after this debate, however it transpires, we are prepared to have further meetings so that people can raise points which we can learn from as we go on. I hope that demonstrates that we wish to get this right and be transparent.
The Universal Credit (Transitional Provision) Amendment Regulations 2022, laid on 4 July, came into force on 25 July 2022. These regulations build on insights from the previous Harrogate pilot and from the pandemic and improve the existing legislative framework so that it better supports the DWP’s revised strategy, published in April 2022, Completing the Move to Universal Credit. I can confirm that the strategy is to migrate all legacy benefit claimants into a single, streamlined and simplified benefit system by the end of 2024.
The Motion tabled today by the noble Baroness is driven not by criticisms of the technical provisions and amendments within the regulations; these make needed improvements to legislation that sets out how claimants should be migrated to UC and protections they receive in doing so. They will also remove unnecessary complexities that benefit neither the claimant nor the taxpayer or provisions that do not reflect our policy intent. The concerns are instead focused on the removal of a statutory limit on the number of claimants, in the belief that this risks a lack of oversight of DWP’s progress and transparency about the nature of our plans for migration. These reflect concerns raised by the Social Security Advisory Committee and the Secondary Legislative Scrutiny Committee, and whilst I am sympathetic to their origins, I can assure the House that they are misfounded.
First, moving to universal credit is a good thing for claimants. Overall, we estimate that most people are better off under UC. We estimate that 55% of all legacy claimants will have a higher entitlement under UC, relative to legacy benefits; around 10% of legacy claimants will see no changes; and 35% will have a lower entitlement. That 35% who are not better off will be considered for an assessment for transitional protection to support that move over. Once they are moved over, they take advantage from a more dynamic system of support that focuses on work, incentives and earnings.
However, despite these advantages, the startling fact is that those who could benefit most—those still to migrate over—either are not aware or do not share this opinion of universal credit. Internal work looking
at claimants’ attitudes suggests that there is a hesitancy towards moving to universal credit as there is concern that they will not be better off.
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Media reports have influenced this belief, and it is important that we change this misconception; hence we all share the priority of ensuring an effective transition to UC for those who need most help to make the journey. Sometimes this gets lost, even in our more nuanced and informed debates in this House. It is legitimate to ask questions but let us make sure that we are balanced and recognise our role in helping claimants understand the true picture: that the majority will gain and that those who do not will be protected. We have always been clear that, whatever approach we choose to take, claimants’ interests will come first; nobody will be left behind.
Since Covid, we have adapted our plans. The approach we proposed to take before the pandemic was developed particularly because there was concern that the DWP could not handle volumes. This concern proved unfounded. In three months, UC took more claims than were needed in the whole of the managed migration. This is why the legislation has been changed. The removal of the 10,000 limit was brought forward, as that ceiling on the number of claimants no longer reflected how we wished to test and learn how to transition claimants. We have moved on from 2019 and so have the regulations. It does not change our intention to make sure we have processes in place that allow claimants to move safely from legacy benefits to universal credit.
The Harrogate pilot began in October 2019 but was suspended in 2020. Learning from this informed both process design and future communications to claimants for the recent resumption. This same approach of testing and learning is replicated at the heart of our new approach to managing migration claimants.
The replacement for the Harrogate pilot is the small-scale discovery activity of the discovery phase. This is run across multiple sites, with decisions on testing and scaling-up not pitted to a pre-set timetable. It starts with small volumes across selected areas and uses quantitative and qualitative evidence to inform the programme design and processes of universal credit. Central to its implementation of ongoing learning is gathering evidence that seeks to understand the claimant’s experience. This informs how we can best support vulnerable claimants, including how to communicate with them to make sure they know what is required and how to make a claim for universal credit, and how to proactively work with claimants who do not make a claim within their three-month period, and what action they then need to take.
Finally, we have been transparent with Parliament. We set out our plans. In April 2022 we published our approach. We have been working with stakeholders, developing our plans and regularly updating them and seeking their help in the task. Our publication, Completing the Move to Universal Credit, sets out the three strands for migrating claimants, but only one—that of managed migration—provides financial security at the point of moving across.
Keeping a statutory limit on migration would mean delays in sending migration notices to claimants. More claimants, therefore, would risk experiencing a significant change in circumstances before being sent their migration notice and moving to UC naturally. Only those who receive a migration notice will be assessed for, and potentially benefit from, transitional protection at the point they transition to UC.
In addition, delays in scaling-up the process of managed migration would mean that greater volumes of claimants would be migrated to UC later, so a larger volume of legacy claimants would miss out on the benefits of claiming UC, including, where appropriate, tailored work support that can lead to higher earnings, as well as higher average benefit entitlement. The analysis within our own Completing the Move to Universal Credit paper estimates that those who are better off will be better off, on average, to the tune of £220 per month.
Finally, as with all former early elements of UC implementation, we remain committed to engagement with stakeholders and to meeting our obligations to Parliament. Stakeholder engagement with a diverse range of organisations, through regular meetings, ensures the claimants’ perspective and the needs of the vulnerable are safeguarded as part of our ongoing testing of the design of UC. In addition, we are open to wider sharing and scrutiny, not just through the wider parliamentary channels and ongoing discussions with the Work and Pensions Committee but through sharing progress publicly. This was demonstrated by our recent commitment to publish the early findings of the UC discovery journey since May 2022.
Noble Lords have raised many questions, and I will give the answers I have here. The noble Baroness, Lady Sherlock, asked about the timescale for the DWP’s plans for the migration of all legacy claimants. As I said, it is our ambition to complete them by 2024. The noble Baroness asked how we will rapidly increase the volumes migrating through managed migration. The increase in the volume of claimants migrated will start once the department is confident that it is ready to do so; this will be no earlier than 2023.
The noble Baroness, Lady Sherlock, asked how, without a valuation, a claimant will know they are ready to move to the next stage of migration and how we will measure success. We continuously monitor test-and-learn activities within the discovery process and through gathering qualitative and quantitative evidence, with particular focus on those claimants who may have enhanced support needs. Learning is fed back into the design and implementation to ensure safe migration to UC.
The noble Baroness asked why we were removing the 10,000 limit. This limit creates a regulatory constraint on the number of claimants that can be migrated before legislation has to be amended. If we can roll out migration more widely, having a fixed point at which it is assessed no longer reflects how we wish to test and learn or work with others to evaluate safely moving claimants.
The noble Baroness, Lady Sherlock, also asked why the DWP did not automatically transfer all claims across to UC. Several systems hold personal data. The
department may not have sufficient information to determine the full UC entitlement because some of this information may not be available. It is therefore crucial that new claims for UC are made to ensure that data is as accurate and as up to date as possible.
I was also asked how many will receive transitional protection. The DWP estimates that approximately 600,000 will be managed, migrated and eligible for transitional protection. All eligible claimants who move through the managed migration will be assessed and, where appropriate, awarded transitional protection. The 600,000 figure is based on an estimate of those who were still on legacy benefits in April 2022.
The noble Baroness, Lady Sherlock, and others asked what has been done so far to ensure that vulnerable claimants are supported in the discovery phase. The DWP is working closely with claimants and support organisations to learn in a safe way what support is required and to adapt the service to meet those in need.
The noble Baroness, Lady Sherlock, asked how uprating will impact the level of transitional protection that claimants receive. We cannot comment on benefit uprating. We can say that transitional protection is eroded with an increase to, or addition of, another UC element, including uprating benefits.
The noble Baroness also asked whether any benefit claimants have had their claims terminated. Since the resumption of the move to UC, the discovery phase has made every effort to engage with claimants before their deadline day to try to understand why no claim has been made and to provide support in the making of their claim. Where the claimant is unable to make their claim within the three-month window and requires an extension, they are told to contact the DWP. In our briefing, there was talk of home visits and of going the extra mile to make sure that we engage with people who have not responded.
The noble Baroness, Lady Sherlock, asked why we could not extend the period in which a claimant could receive transitional protection beyond one month after the deadline of three months. Where a claimant makes a claim within one month of their deadline day passing, they will still be eligible for transitional protection.
The noble Baroness asked what safeguards will be in place so that no claimant will lose entitlement by failing to make a claim to UC by the deadline date. To prevent vulnerable claimants being disadvantaged, discovery has policy safeguards on which to draw and has put new ones in place.
The noble Baroness, Lady Sherlock, asked how and why a claimant might have their deadline extended. A claimant’s deadline can be extended if it is believed that this would be in the interest of the claimant or the department. She asked whether we will publish a formal evaluation and report on operational readiness. We will continue to update Parliament at appropriate milestones, as we have done throughout the implementation of UC, and will continue to communicate as much as possible.
The noble Lord, Lord Storey, asked how DWP will engage Parliament in the next phase. As I have said, we are committed to openness and transparency in
how we are implementing the next phase of migrating claimants to universal credit. We will continue to engage with Parliament, as during previous stages of universal credit, through standard parliamentary channels, sharing progress as and when it is possible to do so. He asked what safeguards will be in place so that no claimant loses their entitlement by failing to make a claim. To be clear, our goal has been and remains to support all claimants to claim UC and move them across safely. Terminating benefits is a last resort. To prevent vulnerable claimants being disadvantaged, the discovery phase has policy safeguards to draw on and has put new ones in place. They include extending the deadline date when a claim must be made, cancelling migration notices in certain circumstances and offering claimants support to make a claim for UC, such as through the independent help-to-claim services provided by the citizens advice service.
The noble Lord, Lord Storey, referred to transitional protection offering only temporary help and asked why we do not make it a permanent uplift. Transitional protection is not an indefinite increase in a claimant’s UC award. Transitional protection provides time for the claimant to adapt to their new level of entitlement. This is not new policy. The erosion over time of transitional elements of an initial award is an established principle in social security.
The noble Baroness, Lady Sherlock, and the noble Lord, Lord Storey, asked how we will engage with Parliament in the next phase. I believe I have already answered that.
My noble friend Lord Farmer asked how many people are receiving out-of-work benefits or claiming the legacy ESA. There are around 1.2 million households on income-related ESA. Not all will be managed migrated and some will leave ESA prior to being moved. The second part of my noble friend’s question was about whether the migration of people currently claiming legacy employment support allowance into universal credit will mean that these claimants receive more attention from work coaches with the aim of being better enabled to work. A claimant’s requirement to engage with work coaches will depend on their circumstances. However, for the first time, we will be engaging with partners of former ESA claimants to support them in the labour market. The department recognises the importance of establishing the best possible support arrangements for those moving from legacy benefits to universal credit. There are around 400,000 new-style ESA claimants not subject to moving to UC.
The noble Lord, Lord Storey, and the noble Baroness, Lady Lister, asked what the process of managed migration will look like post the pilot. Our learning from the discovery phase will determine how we start to select more claimants in a controlled way to move safely over to UC.
The noble Lord, Lord Storey, asked what has been done so far to ensure that vulnerable claimants are supported in the discovery phase. The DWP is working closely with claimants and support organisations to learn in a safe way what support is required and to adapt the service to meet those needs.
The noble Baroness, Lady Lister, asked how, without an evaluation, you will know you are ready to move to the next stage of migration. We continually monitor test-and-learn activities in the discovery phase. As I have said, by gathering qualitative and quantitative evidence based on the needs of claimants, who may have enhanced support needs, learning is fed back into the design. The noble Baroness asked how we will rapidly increase volume. The increase in the volume of claims migrated will start once the department is confident that it is ready to do so, and no earlier than 2023. I have already said that, but I want to emphasise it.
The noble Baroness, Lady Lister, asked how we can support larger volumes. The department will consider several factors, including operational readiness, the efficiency of the service, key functionality being in place and ensuring that the department has processes in place to support vulnerable claimants before moving to higher volumes. The noble Baroness asked about signposting in the migration letters. When the claimant is unable to make their claim within the three-month window and requires an extension, they are told to contact DWP. Where they do not, we will make every effort to make contact with them. As I said, that might include home visits and interaction with key workers. The noble Baroness asked whether we will publish a formal evaluation and report on readiness. As I said, we will continue to update Parliament at appropriate milestones.
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The noble Baroness and others asked whether we will start to scale. The department will increase the numbers required to move once we are confident in the process and that support is in place to move greater volumes.
The noble Baroness, Lady Lister, asked what governance arrangements are in place for the discovery phase. The department has robust governance processes in place, with accountability to the independently chaired UC programme board and our steering group chaired by the Secretary of State.
The noble Baroness, Lady Lister, and the noble Lord, Lord Storey, asked in what circumstances a claimant’s transitional protection will be eroded or terminated. Transitional protection will be reduced if another UC element, other than the childcare cost element, is awarded or increased. Transitional protection terminates if a claimant’s circumstances no longer resemble those when they claimed UC.
On the issue of uprating, I am afraid I cannot give any information. I am sorry, but I have to wait until the Secretary of State carries out—