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Universal Credit U-turn is a step in the right direction but flaws remain

Paul Noblet, Centrepoint’s Head of Public Affairs, welcomes the government’s decision in the Budget to scrap the seven day waiting period before someone can claim Universal Credit, but warns the system is still not working for vulnerable young people.

In the run-up to this year's Budget, Centrepoint met with MPs to highlight a number of problems that Universal Credit is causing for young people, including those we support in our services.

Many of our young people simply do not have savings to fall back on while they wait four weeks – and often longer – for their first Universal Credit payment. This has led many to rely increasingly on foodbanks.

Scrapping the seven day waiting period will bring their first payment closer, but many will still have to rely on charity to get them through that first month. 

The government also addressed another of our key concerns – that claimants who took out a loan from the government had to pay it back out of their benefits over just six months. As a result, this often meant people would have only £30 per week for essentials like food, clothing, and transport to college courses.

Ministers have now agreed that loans will be repayable over 12 months instead, which will relieve some pressure on the young people we support. But this still doesn't address Universal Credit’s fundamental flaws.

In welcome news, the government pledged to:

  • continue to work with employers on how the apprenticeship levy can be spent so it works effectively and flexibly for industry.
  • provide £34 million to scale up innovative construction training models.
  • consult on the barriers to landlords offering longer, more secure tenancies to tenants.
  • enable councils in particularly high-rent areas to borrow money to build new council houses, and to raise the local housing allowance in these areas to make renting more accessible.
  • follow the recommendations of the independent Low Pay Commission and increase the national minimum wage for under-25s and apprentices.

Moves towards increasing the number of homes that are genuinely affordable and raising minimum wages are the way forward. But with rents outstripping increases in wages and benefits over the past few years, there is still a lot to do to ensure that all young people have a safe and affordable place to call home.

Paul Noblet is Centrepoint's Head of Public Affairs. For our latest policy and public affairs updates, please follow @CP_Policy on Twitter.