The North West's Welfare Revoltion

The process of direct payment will be trialled in four, north-west towns Photo: PA

It's the biggest, most ambitious shake-up of the welfare system since its birth, and it's starting here in the North West.

Come next month the government's answer to our bloated benefits system, Universal Credit, will be trialled in Oldham, Tameside, Warrington and Wigan. Four-so called 'pathfinder' towns.

The idea behind Universal credit, according to the Department for Work and Pensions, is to simplify the welfare system. It will take a number of existing, separate payments:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credits
  • Working Tax Credits
  • Housing Benefit

and replace them with a single payment, paid directly to the claimant.

This, the government says, 'will help claimants and their families to become more independent', not only by taking control of their own money, but by ensuring that when those out of work find employment, their benefits will be withdrawn gradually over time. A greater incentive to find work, the government says. Warrington South and Conservative MP David Mowat says the policy is summed up in 3 words: 'making work pay'.

The problem is undeniable. In Britain almost a quarter of GDP goes on welfare - last year it cost us £159bn, almost as much as heath and education combined.

Here in the North West, around 1 in 5 people of working age receive benefits.

Universal Credit aims to bring both of those figures down.

The protest and reservation comes less in the principle and more in the planning. The system if payment requires claimants to have internet access and an online back account.

It will be paid in a single, monthly payment - a significant change for many claimants who currently receive welfare weekly.

From speaking to housing trusts in Warrington and Oldham though, the biggest fear appears to be arrears. With housing benefit going directly to the tenant and not to the social landlord.

During a pilot for direct payment in one part of Wales, arrears rose seven-fold in just seven months. It's with that the housing associations here are fearful.