The coronavirus crisis means that, by the end of this year, there could be four million people who want a job but don't have one
When we look back at the recent history of this pandemic, we will be grateful for Universal Credit.
Had we still been operating the clunky, paper-based system of the Blair/Brown era, we would have had unemployment queues snaking round city centres. We would have witnessed the newly unemployed waiting for days in queues to register for benefits, often for the first time.
It would have shamed the country at a time of crisis and brought the entire welfare system to the point of collapse. Because of Universal Credit, that hasn't happened.
The pandemic and our response to it has had a devastating impact on the UK economy. Between March, when the lockdown began, and August, the number of people claiming unemployment support rose by over 120 per cent to 2.7 million.
There are literally millions of new people claiming Universal Credit, and by Christmas we can only expect the figure to rise further. The jobs miracle of the last decade has come to an end.
Universal Credit is not the end of the welfare reform story. The next task that faces the Department for Work and Pensions must be how to support people back in to work.
Whatever our views on the decisions made over recent months, getting people back into work is going to dominate our thoughts and Government actions in the coming years. Unemployment can be disastrous for any individual. Unemployment is not just the loss of an income but also the loss of a sense of purpose, identity and dignity.
We cannot just treat unemployment as a problem on a spreadsheet. There are real human lives behind the statistics. Our current employment support system is a confusing patchwork of different programmes that really fails to understand this phenomenon.
When I first set about designing and implementing Universal Credit with Lord Freud, we put together plans for a system called Universal Support to sit alongside payments. Universal Support is the wrap-around support service, run by local authorities, and aims to help welfare claimants tackle barriers to personal progress.
Evidence from abroad and in the UK suggests that personalised support programmes are best at helping the most vulnerable in society to get back in to work.
A new report from the Centre for Social Justice gives the Chancellor a ready-made plan of action for rolling out Universal Support as he tackles mass unemployment for the first time in a generation. The plan must be to introduce Universal Support in every town in the UK. For number-crunchers at the Treasury, this report estimates that Universal Support has a Return on Investment of 1.5–2.
It's the human cost, borne by every other part of Government, where this will make the biggest difference. Universal Credit has been the most ambitious social policy endeavour since the 1940s and, importantly, it is working.
Welfare policy before Universal Credit was crude in its attempts to solve the problem of worklessness and welfare dependency through increasingly generous handouts. However, it is right to say that the job is only half done. The economic impact of Covid has already been disastrous, and is not yet fully known. By the end of this year, there could be four million people in Britain who want a job but don't have one.
A truly compassionate social security system should be about life change and empowerment, not just a welfare cheque in the post.
While Universal Credit will continue to deliver key financial support successfully, Universal Support will come alongside. It can add value by helping people who may be applying for Universal Credit but also need help in stabilising their housing situation, advice on dealing with burdensome debt, help in accessing opportunities to develop skills or getting an appointment for a medical diagnosis.
The Covid-19 crisis has been traumatic for the country, and the economic cost is likely to be felt for a long time to come. Unemployment forecasts are the long tail of this pandemic.
People who had the security of an income but have no savings have been plunged into a risky situation. Financial pressures can lead to debt, housing problems, relationship strains and, in the most extreme cases, violence, homelessness, substance misuse and criminal activity.
There is, I consider, unfinished business in updating our welfare system. The Government now needs to recognise that, more than ever, Universal Credit needs to be joined with Universal Support, creating a truly compassionate social security system that helps change lives for the better.