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2 April, 2020 Open access

DWP must get universal credit ‘battle ready’ as unemployment grows due to COVID-19

Resolution Foundation highlights that almost a million claims have been made for universal credit in the last fortnight

The DWP must get universal credit 'battle ready' as unemployment grows due to COVID-19, the Resolution Foundation has said.

In a new report, 'No work,no pay', the Resolution Foundation highlights that, due to the coronavirus outbreak, new claims for universal credit are almost 700 per cent higher than normal, with 950,000 claims having been made in the last fortnight. Despite schemes put in place to avoid unemployment - the Coronavirus Business Interruption Loan, the Coronavirus Job Retention Scheme, and the Self-employment Income Support Scheme - the Resolution Foundation predicts that the eventual rise in unemployment will be at least as large as, and much swifter than, that seen during the financial crisis.

While observing that there is some hope that the volume of claims will fall from the current unprecedented highs, even if it remains elevated above both normal times or those seen during the financial crisis, the Resolution Foundation warns it would be unwise to be complacent. As a result, it calls on the government to - 

Calling on the government to get universal credit 'battle ready' for its crucial role in the growing unemployment crisis, Senior Economist at the Resolution Foundation Karl Handscomb said - 

'Despite the hugely welcome wage and income subsidy schemes for furloughed employees and self-employed workers, a huge number of people are still going to lose their jobs and need immediate income support to avoid hardship. For these people, universal credit will be the key source of help.

The Chancellor has already announced a £7 billion plan to make the system more generous. The key challenge now is to encourage more people to claim universal credit, process those claims rapidly, and get payments out to people as soon as possible.

The roll-out of universal credit in recent years has been beset by controversy. But its performance over the next few months is the real test of this new benefit system – as it provides a living standards lifeline to millions of households.'

For more information see Government must get Universal Credit ‘battle ready’ for the UK’s unemployment crisis from resolutionfoundation.org