Fourth Report - The Benefits System in Wales

Select Committee

Welsh Affairs Committee HC 337 17 March 2022

Report Status Government responded

Conclusions & Recommendations 33 items (15 recs)

Source View on Parliament website

Government Response (AI assessment · 23 of 33 classified)

Accepted 8

Deferred 3

Not Addressed 4

Rejected 5

Recommendations

15 results

3 Acknowledged

Para 75

We were concerned to hear that welfare rights advisors believe that Universal Credit’s explicit consent...

Recommendation

We were concerned to hear that welfare rights advisors believe that Universal Credit’s explicit consent model has impeded their ability to help claimants and has led to some people sharing personal data such as passwords. We would welcome the UK … Read more

Government Response Summary

The Department for Work and Pensions is committed to continually improving access to Universal Credit. A policy of explicit consent exists to help reduce the risk of fraud. The Department welcomes any input through its ongoing discussions with a broad group of stakeholders.

Wales Office

4 Not Addressed

Para 76

The DWP should run a consultation with welfare rights advisors on Universal Credit’s explicit consent...

Recommendation

The DWP should run a consultation with welfare rights advisors on Universal Credit’s explicit consent model and examine whether any changes are necessary.

Government Response Summary

The government rejects the recommendation for a temporary increase to Universal Credit arguing that the £20 uplift was a temporary measure and has been replaced with over £15bn in support towards cost-of-living pressures and schemes to help people find employment.

Wales Office

5 Rejected

Para 81

The UK Government must urgently review the level at which Statutory Sick Pay (SSP) is...

Recommendation

The UK Government must urgently review the level at which Statutory Sick Pay (SSP) is set. At only £96.35 per week, it is equivalent to only 20 per cent of the average wage—compared to 100 per cent in Germany and … Read more

Government Response Summary

The government rejects the recommendation to review Statutory Sick Pay levels, stating that it is reviewed annually and that more than half of employees receive more than the statutory minimum from their employer. They are keeping the system under review.

Wales Office

6 Accepted

Given the comparatively high proportion of low paid workers in Wales, we were concerned to...

Recommendation

Given the comparatively high proportion of low paid workers in Wales, we were concerned to hear of issues regarding the eligibility criteria for Statutory Sick Pay. While we acknowledge that there may be other support available to unwell workers, the … Read more

Government Response Summary

The government states it has already improved work incentives in Universal Credit in response to a report, cutting the taper rate and increasing work allowances.

Wales Office

12 Deferred

Para 88

We urge the UK Government to use nearer-term forecasts to increase benefits in line with...

Recommendation

We urge the UK Government to use nearer-term forecasts to increase benefits in line with the actual rate of inflation that will apply in April 2022. As a long-term solution to these issues, the DWP should outline what the benefit … Read more

Government Response Summary

The DWP states that social security is reserved in Wales and that they will continue to work with Welsh Government colleagues to discuss improvements in signposting grants and allowances.

Wales Office

14 Accepted

Para 96

The UK Government should take forward the recommendations of the In-Work Commissioner and review how...

Recommendation

The UK Government should take forward the recommendations of the In-Work Commissioner and review how the taper rate and work allowances can best support in-work progression.

Government Response Summary

The government will allocate £99m to provide around 2.1m low-paid benefit claimants with support to progress into higher-paid work through work coach support and Progression Champions working with local partners.

Wales Office

18 Rejected

Para 118

The two governments should establish a UK-Welsh government Inter-ministerial Advisory Board on Social Security.

Recommendation

The two governments should establish a UK-Welsh government Inter-ministerial Advisory Board on Social Security. Such a Board could build on the good examples of joint working which were seen during the pandemic. Minutes of its meetings should be published. Read more

Government Response Summary

The government rejects the recommendation to establish a UK-Welsh government Inter-ministerial Advisory Board on Social Security, stating that existing engagement channels are sufficient.

Wales Office

19 Rejected

Para 119

UK Government ministers should consult with the Welsh Government in advance of new social security...

Recommendation

UK Government ministers should consult with the Welsh Government in advance of new social security policies being implemented, especially in areas linked closely to devolved areas of competence such as housing and skills. The UK-Welsh government Inter-ministerial Advisory Board on … Read more

Government Response Summary

The government rejects the recommendation to consult with the Welsh Government in advance of implementing new social security policies, stating that existing engagement channels are sufficient.

Wales Office

20 Accepted

Para 122

We received evidence regarding a lack of awareness among the wider public of key benefits,...

Recommendation

We received evidence regarding a lack of awareness among the wider public of key benefits, most notably Pension Credit. The UK Government should address this directly through a UK-wide income maximisation campaign and design its messaging so that it not … Read more

Government Response Summary

The Department for Work and Pensions is undertaking a national communications campaign, launched on 4 April, to raise awareness of Pension Credit and encourage eligible pensioners to claim.

Wales Office

21 Accepted

Para 123

The DWP and Welsh Government should work together with local authorities to run a take-up...

Recommendation

The DWP and Welsh Government should work together with local authorities to run a take-up campaign on Pension Credit, with messaging designed to both raise awareness but also address any reservations some older people may have about claiming it.

Government Response Summary

The DWP is undertaking a national communications campaign to raise awareness of Pension Credit, including promotional activity on social media, search engines, newspapers, leaflets and posters. They also engage regularly with the Welsh Government on Pension Credit take-up activities.

Wales Office

23 Deferred

Para 131

The DWP and Welsh Government should work together to improve the signposting of benefits, grants,...

Recommendation

The DWP and Welsh Government should work together to improve the signposting of benefits, grants, and allowances by producing a toolkit for Work Coaches. It should cover all devolved and local authority support. The DWP should report back to us … Read more

Government Response Summary

The DWP states that social security is reserved in Wales and that they will continue to work with Welsh Government colleagues to discuss improvements in signposting grants and allowances.

Wales Office

24

Para 132

While we note the positive comments regarding the Welsh Government’s response to the pandemic via...

Recommendation

While we note the positive comments regarding the Welsh Government’s response to the pandemic via the Discretionary Assistance Fund, we also heard concerns about the application process for various Welsh Government and local authority grants and allowances. We welcome the … Read more

Wales Office

27 Accepted

Para 138

The UK Government should accept the In-Work Commissioner’s recommendation to provide a credible in-work offer...

Recommendation

The UK Government should accept the In-Work Commissioner’s recommendation to provide a credible in-work offer for all working benefit claimants. The UK Government should outline how it will take this work forward with the Welsh Government and report back to … Read more

Government Response Summary

The UK Government is committed to helping workers progress into higher pay and announced that £99m would be allocated to provide around 2.1m low—paid benefit claimants with support to progress into higher—paid work. They will provide work coach support, Progression Champions, and work with key partners.

Wales Office

32 Rejected

Para 161

It is important to make the distinction between devolving the administration of certain welfare benefits...

Recommendation

It is important to make the distinction between devolving the administration of certain welfare benefits and the wholescale devolution of welfare and we recommend that, as a first step, the UK-Welsh Government Inter-ministerial Advisory Board on Social Security should undertake … Read more

Government Response Summary

The government rejects the recommendation to assess devolving administration of benefits to Wales, stating it has no intention to devolve social security to the Welsh Government.

Wales Office

33 Rejected

In the event of the Welsh Government submitting formal proposals to the UK Government, the...

Recommendation

In the event of the Welsh Government submitting formal proposals to the UK Government, the DWP should provide us with an update in 12 months regarding the nature and progress of its discussions with the Welsh Government. (Paragraph 162) The … Read more

Government Response Summary

The government rejects the premise of the recommendation, reiterating it has no intention to devolve social security to the Welsh Government.

Wales Office

Conclusions (18) Observations and findings — click to expand

1 Conclusion Not Addressed

The demographic, economic and geographic challenges we have highlighted set the context for the benefits system in Wales. While it is a reserved competence, that does not mean the environment in which it operates is identical to that elsewhere in Great Britain. While the evidence shows that the key challenges …

Government Response Summary

The government response focuses on improving access to Universal Credit and data protection, without addressing the demographic, economic, and geographic challenges in Wales or acknowledging the need for welfare policy to be conscious of the Welsh context.

2 Conclusion Acknowledged

Para 57

The pandemic demonstrated how resilient the UK social security system can be in the face of significant challenges. Despite the huge surge in demand, Universal Credit continued to function and benefits were paid out to a markedly increased pool of claimants. That Universal Credit was able to withstand these pressures …

Government Response Summary

The government acknowledges the resilience of the social security system during the pandemic. However, the government believes that the pandemic was not the right time to introduce changes to the rate of Statutory Sick Pay and is keeping the system under review.

7 Conclusion

Para 83

We welcome the swift changes to the financial support many claimants received during the pandemic, as well as to the operation of the overall system. We received evidence of the significant difference that the temporary £20 uplift made to those eligible claimants, as well as other support measures such as …

8 Conclusion Acknowledged

Para 84

We acknowledge that the UK Government has difficult choices to make in ensuring that the benefits system is financially sustainable in the long-term. We welcome its reduction of the taper rate and increase in the work allowance in the autumn Budget.

Government Response Summary

The Office of the Secretary of State for Wales is committed to improving working relationships across Government to support the people of Wales and will continue to advise and support the DWP on matters impacting Wales, ensuring UK policy is delivered effectively and communicating policy decisions across Wales.

9 Conclusion

Para 85

However, in light of concerns about the rising costs of living, there is a need for a discussion about how to ensure benefits are adequate, affordable and sustainable. On the basis of the evidence presented there is a need for an urgent review of: ending the £20 UC uplift; the …

10 Conclusion

Para 86

It is clear that current benefit levels are inadequate. In the short term, the £20 uplift should be reintroduced at the Budget in March 2022 and extended to legacy benefits.

11 Conclusion Accepted

Para 87

Without the uplift, benefits for the unemployed are at their lowest real-terms level since the early 1990s. Had they grown in line with GDP per capita since 1990, they would be £40 a week higher. The future value of benefits is also being reduced given the increasing cost of living, …

Government Response Summary

The DWP is undertaking a national communications campaign to raise awareness of Pension Credit, including promotional activity on social media, search engines, newspapers, leaflets and posters. They also engage regularly with the Welsh Government on Pension Credit take-up activities.

13 Conclusion

Para 95

Around 39% of claimants are in work. Many of those who became eligible for Universal Credit during the pandemic will have done so through losing income while on furlough rather than through losing a job. For those whose pay is supplemented by Universal Credit, the issue is not finding work, …

15 Conclusion Not Addressed

We welcome the extent of support that the UK Government provided during the pandemic, but we note that not all self-employed people were eligible. We welcome 44 The Benefits System in Wales the UK Government’s acknowledgement that it has “learned more” about the issues with capital limits and we would …

Government Response Summary

The Department for Work and Pensions has advised the Welsh Government how Universal Credit would be affected by payments under the proposed basic income pilot and HMRC has similarly advised about the treatment of taxation, not providing more details about the lessons it has learned regarding capital limits and self-employed people.

16 Conclusion

Para 116

We welcome the extent of joint working between ministers throughout the pandemic, including meetings between the Secretary of State for Wales and the First Minister and other Welsh Government Ministers, as well as multilateral meetings chaired by various UK Ministers. This reflected not only the gravity of the situation but …

17 Conclusion

Para 117

We welcome the establishment of an Interministerial Group on Welfare, as part of the recently published Review of Intergovernmental Relations. However, while this will provide an important forum for bringing together the four UK governments to discuss welfare and social security issues, we believe this should be underpinned by a …

22 Conclusion Deferred

Para 130

We welcome efforts to improve awareness among claimants of all UK Government, Welsh Government, and local authority support, but written evidence suggests that there is still a long way to go. People requesting help need to feel confident that they have been informed of all the benefits and grants available …

Government Response Summary

The DWP states that social security is reserved in Wales and that they will continue to work with Welsh Government colleagues to discuss improvements in signposting grants and allowances.

25 Conclusion Accepted

Para 136

39% of Universal Credit claimants are already in work: the issue for them is not finding a job but finding a higher paid one or more hours. We welcome the UK Government’s commitment to providing claimants with in-work support and look forward to hearing further details about how its Progression …

Government Response Summary

The government will allocate £99m to provide around 2.1m low-paid benefit claimants with support to progress into higher-paid work through work coach support and Progression Champions working with local partners.

26 Conclusion Accepted

Para 137

We note that the In-Work Commissioner’s report on Supporting People out of Low Pay found that most Jobcentre Plus support is tailored to help people get into work: there is less support and training available for those who are already there. We support its recommendation that Jobcentres should provide a …

Government Response Summary

The UK Government will allocate £99m to provide around 2.1m low-paid benefit claimants with support to progress into higher-paid work through work coach support, addressing skills gaps, training opportunities, and progression opportunities, supported by Progression Champions in every Jobcentre District working with key partners.

28 Conclusion

Para 151

Care-leavers are a vulnerable group and there is a strong case for arguing that they should have enhanced support. While the Welsh Government supports a basic income pilot for this group, we note that the UK government opposes universal basic income.

29 Conclusion

We have received a range of concerns regarding the limitations of the pilot and there are also considerable issues concerning how the pilot will affect the benefits of the participants. It is crucial that those considering participating are aware of how it will affect the benefits they receive and the …

30 Conclusion

Para 153

In the interests of the young people considering taking part in the Welsh Government’s Basic Income pilot, the DWP and the Welsh Government should work together to conduct an impact assessment on the benefits received and the amount of taxes paid by the average potential participant.

31 Conclusion Not Addressed

Para 160

The evidence collected during the inquiry showed that attitudes to the idea of devolving welfare vary significantly. Some were concerned about the financial implications and many felt that they did not have enough information. However, during the course of the inquiry many experts noted the potential merits of being able …

Government Response Summary

The government restates its position that it has no intention to devolve social security to the Welsh Government and notes the advantages of the current system without addressing the conclusion about varying attitudes.