Has Universal Credit Made It ‘Significantly More Likely’ That Claimants Will Find Employment?

by richardhutton

Are Universal Credit claimants “significantly more likely to move into work than those on Jobseeker’s Allowance” as the DWP suggest? Not really.

The DWP’s Press Office announced on 8th December 2015 that their report ‘Universal Credit At Work’:

“shows that this government is delivering on its commitment to reform welfare to help people into work. Universal Credit at Work finds that 71% of Universal Credit claimants moved into work in the first 9 months of their claim, compared with 63% of comparable JSA claimants. This means that for every 100 people who would have found employment under the old JSA system, 113 UC claimants will have moved into a job.”

This is not entirely accurate. The report in question says something slightly different – namely that:

“Universal Credit claimants are eight percentage points more likely to have been employed in the first nine months of their claim – 71% for Universal Credit versus 63% for Jobseeker’s Allowance” (p. 8).

It’s not a given that these people moved into work permanently. In fact, the indications are quite the contrary. The research this data was drawn from makes it clear that after 9 months of their claims, in terms of entering employment, the difference between people in receipt of Universal Credit, and those claiming Job Seekers Allowance, dropped to 3%:

” 270 days after making a claim the proportion of UC claimants employed was 3 percentage points higher than the proportion of matched JSA claimants in work at the same point in time”.

So, it appears to have a statistically significant impact for 9 months; yet as it goes on to add: “UC claimants had worked an estimated 12 days more than their matched JSA counterparts”. This is not particularly impressive – it signifies that Universal Credit is encouraging people to “do small amounts of work”; and that this is liable to be temporary. In fact the DWP’s research report states – perhaps optimistically – that

” It is important to highlight also this second figure, because the contrast to the first figure suggests that the increase in employment chances with UC may be to temporary work. This would be consistent with other evidence discussed with DWP, which suggests that a high share of claimants are willing to accept short-term or temporary jobs”

Equally problematic are the DWP press announcement’s claims that Universal Credit somehow encourages people to to seek more working hours:

“Of the UC claimants working less than 30 hours a week, 86% were actively trying to work more hours, compared to 38% of Jobseeker’s Allowance claimants.”

A Universal Credit evaluation does report this:

“JSA claimants working less than 30 hours per week were much less likely to be actively trying to increase either their hours or their income at Wave 2 (38% were looking to increase their hours and 51% their income).”

The question is – why? It isn’t made clear by this particular research report. However, a pathfinder evaluation from October 2014 offers an explanation: namely, the recipient’s ‘Claimant Commitment’ meaning that even when people are working, being in receipt of Universal Credit requires them to fulfill strict jobsearch requirements. Otherwise, they can – and evidently will – be sanctioned (p. 40).

Is all of this particularly significant or worthwhile? It would appear not to be. In terms of gaining temporary employment, Universal Credit seems to have a slight impact during the first nine months of receipt; but otherwise, its primary effect is that recipients spend more time searching for work, without any noteworthy outcome arising.