Universal Credit and the future of the welfare state

Amid the many failures of public policy during the Covid crisis, one success has gone largely unnoticed. The Universal Credit system coped with a huge uplift in applications without breaking down. In February last year 2.6 million households were signed up; six months later that had swelled to 4.6 million. Some 554,000 people made new claims in the first week of lockdown, ten times the normal levels. For a benefit which not so long ago was being damned for the poor execution of its rollout, it is remarkable that the system coped.

Its unexpected success offers plenty of lessons for the future of the welfare state. The digitisation of the system, controversial at the time, enabled the service to be delivered to those in urgent need of help. Combined with the furlough scheme, the massive expansion in Universal Credit has succeeded in staving off an explosion in poverty which otherwise could all too easily have occurred. There are few thanks when it comes to welfare, however. The Work and Pensions Secretary’s job is usually to apologise when things go wrong. The near invisibility of Thérèse Coffey during the pandemic is testimony to her achievement.

Ministers are under pressure to extend a £20-a-week temporary boost to payments introduced at the beginning of the crisis. As things stand, that bonus is due to expire in April. When the pandemic struck, it was right that state benefits be made generous and the barriers to claiming them lowered. A well-functioning welfare system works on the principle that it helps people to help themselves, namely by supporting their efforts to find work. When large parts of the economy were forced to close it was unrealistic to expect people to find employment or to generate their own income.