The COVID-19 Crisis and Universal Credit in Glasgow: September 2021

Sarah Weakley, Research and Knowledge Exchange Lead, College of Social Sciences
Laura Comincini, Postgraduate Researcher, Adam Smith Business School, and Policy Scotland Intern

This is the fourth and final working paper in the series on Universal Credit in Glasgow and Scotland from Dr Sarah Weakley, and her co-author on this paper, Laura Comincini. It uses publicly available Department for Work and Pensions (DWP) data to investigate the income crisis among low-income people who access Universal Credit (UC) in Scotland during the COVID-19 pandemic with a focus on data at the Glasgow City local authority level. The data covers the period from the onset of the COVID-19 crisis (March 2020) to July 2021, or shorter when more recent data was not available. Having up to 17 months of data allows us to investigate what trends have emerged and persist in UC caseload; this paper reports on these trends and considers the implications of these trends on policy and practice.

Key Issues

A new normal

The latest figures show there are 72,729 people (54,527 households) on Universal Credit in Glasgow. 19,359 of these households include children. These caseload figures have stayed relatively stable since July 2020, after a steep increase in the caseload in the spring of 2020. The nearly year-long stability in the caseload suggests, to the concern of many, that this higher caseload risks becoming a permanent feature of the Scottish and Glasgow economies for the foreseeable future, unless acted upon now through appropriate and holistic policies.

Duration

Current data shows that the majority of the people who entered the Universal Credit caseload in spring 2020 have not been able to leave it by finding work that pays well enough to be above eligibility thresholds. This upends all previous trends and runs counter to a welfare system that is designed to be a short term ‘safety net’ that is predicated on a buoyant labour market. Now most of the people on the caseload have been accessing UC for more than a year, which means they have been living on extremely low incomes throughout the entirety of the COVID-19 crisis.

In-work poverty

A notable change in the UC caseload since the beginning of this crisis has been the proportion of people accessing UC who are attached to the labour market. Since labour market restrictions began easing in April 2021 the number of people on UC who are in employment has been increasing, a signal that higher employment levels are not necessarily conducive of better income conditions and may not enable people to escape poverty.

Adequacy and planned cut

Even with the £20/week increase in UC payments since March 2020, Universal Credit payment amounts provide a very low level of income support for recipients to cover their essentials. On average UC income is just 53% of median income across all workers, a figure that includes the uplift ^[1]. This uplift is planned to expire at the beginning of October 2021. Recent analysis from the Joseph Rowntree Foundation finds that across the UK 6 million low-income families will be impacted by this cut and 500,000 people will be swept into poverty, including 200,000 children.

Knock-on impacts to other services and supports

The larger Universal Credit caseload in Glasgow, and the inadequacy of this support to meet a household’s needs, has knock-on impacts to local level income supports from the public and third sectors to shore up gaps in support. In the coming months it will be important for these local actors to identify priority families in the long-term recipient category who likely require more holistic interventions to improve their economic position, wellbeing and access all the supports they are eligible for. This will require stronger collaborations with all partners and more importantly, sustainable funding to do this important work.

^[1]Resolution Foundation (2020) This time is different – Universal Credit’s first recession

The COVID-19 Crisis and Universal Credit in Glasgow: September 2021 (PDF)Download