Tag Archives: Universal Credit

Tax Free Childcare

 Consultation arrangements over Tax Free Childcare in HMRC

Tax Free Childcare (TFC) was announced by the government as part of the 2013 budget. It is scheduled to launch in autumn 2015, and the broad aims of the scheme are:

–          A government contribution towards childcare which could be worth up to £2,000 per child each year.

–          All working families with children under 12 will be able to access the scheme within the first year of its opening.

–          To be eligible, both parents (or a lone parent) must be in paid work up to a maximum earnings threshold and not be in receipt of tax credits, Universal Credit or Employer Supported Childcare

–          Tax-Free Childcare will be delivered by HM Revenue & Customs (HMRC) in partnership with National Savings & Investments (NS&I) which is an Executive Agency of HM Treasury. The scheme will be simple, flexible and straightforward for parents and childcare providers; parents’ money will be secure; and they will face no fees or charges.

–          Self-employed parents and those working for employers who do not offer the existing Employer-Supported Childcare scheme will be able to access the scheme

–          Parents who are currently using the Employer-Supported Childcare scheme will be able to choose to stay in that scheme or move to Tax-Free Childcare. It will be their choice. However, Employer-Supported Childcare will be closed to new entrants once TFC goes live. Employers’ workplace nurseries will not be affected.

PCS have been offered stakeholder involvement in the project and we met recently with the Programme Director to get an early view of the work being undertaken. That meeting was very useful as a starting point but it is clear the project is still very much in development and that a lot of planning work needs to be done before we can begin talks on what TFC will mean in terms of jobs and where the work will be located.

We have agreed the need for further meetings with the Programme Director in the coming months as these plans start to firm up, and we will keep branches updated with progress.

Tim Coxon
On behalf of AGS Helen Watkins

R&C/BB/110/14

 

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Universal Credit Update

Management announce new timetable for Universal Credit roll-out

Under the government’s original places for Universal Credit new claims for JSA across the country should by now have become new claims for Universal Credit (UC). We should also have been expecting new claims for tax credits to become new claims to UC from April 2014. However, as we know the development of UC has been beset with serious problems that have resulted in that original timetable being ripped up.

New timetable for UC
A new timetable for UC has now been unveiled:

  • Bringing 6 additional Pathfinder offices onto UC by April 2014, to make 10 in total continuing to use the original, flawed UC IT system
  • Summer 2014 start to take claims from couples in the 10 Pathfinder areas
  • Autumn 2014 start to take claims from families in the 10 Pathfinder areas
  • Once this has been tested in the 10 Pathfinder areas extending new claims to cover more of the North West geographical area.
  • During 2016 UC to be fully available in each part of Great Britain, having closed down new claims to legacy benefits.
  • The majority of the caseload of legacy benefits to be moved onto UC during 2016/2017.
  • Final decisions on this timetable will be informed by the development of the enhanced digital IT solution

The enhanced digital solution

The original UC IT system is operating in the Pathfinder offices but it is accepted that this IT system is not robust enough for national rollout. This problem has been a major factor in the delay to the UC timetable and accounts for the reports that as much as £200 million may have to be written off for this failed IT system.

Management accept that the original UC IT system will never become the secure online digital system that Ministers want; one that would enable claimants to process their UC claims and changes of circumstances online.  Instead, during the second half of 2013, an enhanced digital IT solution designed to deliver this kind of online service for UC has been tested.

Original estimates were that this new system may be ready for late 2014. Management, however, have had to concede that this new digital online IT system cannot be delivered until the end of 2015. But, given the history of failure of large-scale IT projects in the civil service, many members will be sceptical that this one will be any different.

Faced with a situation where the bulk of UC implementation has had to be deferred for two years, a decision has been taken to continue to very slowly increase the size and scope of the UC Pathfinder, as per the timetable above, while the new IT system is developed. As this timetable makes clear, however, large-scale implementation of UC will not now happen before the end of 2015 at the earliest.

The enhanced digital solution is designed to automate a considerable amount of processing and telephony work. It remains to be seen how successfully this can be done, and the recent IT difficulties that UC has had do not give much cause for confidence.

Threat to Jobs?

If, however, such a digital IT solution were to be introduced effectively, it is clear that there would be a dramatic impact on jobs. Many processing and telephony roles would be automated. While it would not be possible to fully automate the process, a significant impact is still likely. At this stage it is too early to judge what this new UC IT system will deliver and the GEC will work closely with DWP colleagues to closely monitor its development.

Ministerial authority is currently being sought to recruit external IT experts to help build the new IT system for UC – following the earlier than expected withdrawal of support from the Cabinet Office’s Government Digital Services team who had been assisting in this work.

What happens now?

Apart from the small scale, gradual increase of UC in the Pathfinder areas, management are effectively starting again in drawing up new implementation plans for UC. They are working on a new assumption that large scale introduction of UC will not start before the end of 2015. This means that the bulk of legacy benefits will remain in force in the interim.

This major re-working of the implementation plans also calls into question whether the sites that were named as future UC sites in May 2012, (in both DWP and HMRC), are still destined to be UC sites. Management say that they have not changed their working assumptions in this regard but it is clear that these old assumptions could be changed given that new implementation plans are now being drawn up.

Pathfinders

The number of claims to UC that have been taken in the Pathfinder areas remains very low. Between April and 31 October 2013 only 2,900 new claims to UC had been received. This is a tiny amount when compared to the c.60,000 new JSA claims that DWP receives every week. Moreover claims to the Pathfinders are still restricted to single people with no dependants. These figures show how far UC has to go before it is any position to replace the existing benefits and tax credit systems.

Conclusion

It is clear that it will be some considerable time before we will be in a position to map out clearly what UC will mean for members in both DWP and HMRC. The GEC will continue to engage with UC management and our PCS colleagues in DWP to ensure branches and members are kept as up to date as possible.

Tim Coxon – Assistant Group Secretary
Tom TaylorIndustrial Officer

R&C/BB/68/14

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