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Department for Work and Pensions 1 Universal Credit Speaker name May 2012.

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1 Department for Work and Pensions 1 Universal Credit Speaker name May 2012

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

5 Department for Work and Pensions 5 Payments are paid to different adults in a household and for various periods Universal Credit is a single monthly payment to each household (Though we will retain the ability to pay more frequently or to split payment in exceptional circumstances) Conditionality: some benefit claimants are capable of working but have no obligations to look for work Universal Credit will personalise conditions according to people’s capability and circumstances 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 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 How is Universal Credit different? Current System Universal Credit

6 Department for Work and Pensions 6 Personal Independence Payment Universal Credit Simplifying a complex system Current system Pension Credit, Child Benefit, Carer’s Allowance (will remain) Income related JSA Income related ESA Income Support (including SMI) Working Tax Credits Child Tax Credits Housing Benefit Disability Living Allowance Contributory JSA and ESA (still considering how these will work) Council Tax Benefit (Localised Council Tax Schemes)

7 Department for Work and Pensions 7 Making work pay 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 “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

8 Department for Work and Pensions 8 A simpler system with clear work incentives

9 Department for Work and Pensions 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 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 Department for Work and Pensions 10 Designed and built around real claimant journeys Universal Credit

11 Department for Work and Pensions 11 Design focused on claimant journeys 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

12 Department for Work and Pensions 12 Design focused - tested as we build

13 Department for Work and Pensions 13 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 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 The joint design team established that a national service offering with targeted local flexibility is the optimum solution from October 2013.

14 Department for Work and Pensions 14 Digital by Default Universal Credit

15 Department for Work and Pensions 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 Department for Work and Pensions 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 % 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 Department for Work and Pensions 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. 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 During migration delivering targeted & timed advice and guidance to claimants on why and how to get online 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 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

18 Department for Work and Pensions 18 Delivery - Transition Universal Credit

19 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 21 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. Testing before delivery

22 Department for Work and Pensions 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 The Pathfinder will take place in Tameside, Oldham, Wigan and Warrington from April 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 Department for Work and Pensions 23 Migration - key dates APRIL 2013 OCT 2013 APRIL Pathfinder Phase 1 Go-Live New claims from unemployed claimants start New claims from in-work claimants start Managed migrations start Managed migration activity completed

24 Department for Work and Pensions 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 Department for Work and Pensions 25 Housing Universal Credit

26 Department for Work and Pensions 26 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 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.

27 Department for Work and Pensions 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 Department for Work and Pensions 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 The current planning assumption is that migration of Housing Benefit and Tax Credit information for Pension Age customers will be completed by October 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 Department for Work and Pensions 29 Working in partnership Universal Credit

30 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 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 Department for Work and Pensions 37 Summary and conclusion Universal Credit

38 Department for Work and Pensions 38 In Summary We are making good progress in delivering Universal Credit. We are building a 21 st 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.


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