 Good morning everybody and welcome to another resolution foundation webinar. My name is Torsten Bell. I'm the chief executive of the foundation now over the last few weeks. We have spent a lot of time in seminars like this talking about lots of new policies and that's understandable. This is an unprecedented crisis so lots of new policies both needed and is actually being introduced. Lots of people what they will be relying on will be existing policies and how well those are actually delivered and so this event here today is focusing on universal credit which until recently felt like it was a new policy. But now is kind of old man of the policy world given introduction over kind of a matter of months of things like the job retention scheme or self employment protection payments. So it's an old scheme but it's facing its first big challenge with the first ever recession the system has seen. So what we're doing today is reviewing how the system has held up in the face of that challenge and actually what's happened to the people that have been trying to engage with universal credit over the last few months. So that is what we are aiming to do. This is obviously an event to go alongside a publication of a new resolution foundation report which we're going to show you a summary of shortly but you can read the whole thing on the website and I should say thanks to the standard life foundation for funding that research and that publication and then making this event possible. Now to make help us have that discussion with first of all going to hear from Mike Brewer who is the chief chief economist at the resolution foundation one of the authors of the report and he's going to take you through a short summary of that report in slide form. Then you're going to hear from Neil Cooling CBE who is the change director and the senior responsible owner of universal credit at DUP who's going to give us an insight into both what is what's been happening on the delivery of universal credit and how the organization has responded to this unprecedented unprecedented challenge and then you're going to hear from Emma Reeve who is the chief executive of the Trussell Trust which covers not all but the vast majority of food banks across the country and how there's one of the other delivery partners that are obviously helping people through what is a very difficult time at present. So that is the order of play. Now as always on our webinars you can engage with the event via Slido so you can submit questions right now on Slido the hashtag is crisis safety net and you can vote for other people with questions up and down we're going to take those once we've heard from our panelists and there's also going to be polls on that site so the first poll that's going up now that you can hopefully hear something here's some of what you're going to hear from the speakers first and then have your vote on which is try to think about what you used to think about universal credit and now having seen the last few months how has that affected what you do and don't think about the benefit and those are your options on the screen now. So that is the order of play as I say we'll then get to more time for questions from you guys and we're aiming to finish this at midday on the dot so you can all have some lunch so that is the goal and Mike you're going to kick us off with some slides so you can share your slides with Thank you very much Torsten. We thought it was important to look at universal credit as Torsten said because it was his first experience of a recession, although it's been around for the nine years it's always designed to be an unemployment benefit but it hasn't really cope with an economic downturn before. And in this research we're drawing on new evidence from a variety of sources but including in depth interviews with people who recently claimed universal credit, and also an online survey of 6,000 adults 250 of whom recently claimed universal credit. So the 17th of March the day after the government closed pubs and restaurants and advised us not to make essential journeys claims universal credit started to pick up a week later we entered a total lockdown and claims universal credit running at eight times. Now they soon tailed off but even now eight weeks later they're running at twice their pre crisis rate. And in the eight weeks shown in this chart DWP's management information systems recorded 2.6 million claims of universal credit. Now we know now that not all of those claims turn into actual awards of universal credit. And the most accurate data is that for the first four weeks of the crisis, the caseload and universal credit went up by 40% an extra 1.2 million people getting it. This is by all accounts a unprecedented and amazing surge in universal credit claims and it's DWP's enormous credit that their systems held up. This reflects the investment they did over the years in producing a digital service. It also reflects the hard work by 1000 civil servants in those frantic weeks in late March and April who were processing those claims. They overall systems held up and survey our survey of universal claimants views shows that people are broadly very very satisfied. So of those who made a recent claim 74% satisfied with the way DWP had handled their claim. And we know from government data that all of those who've claimed during the crisis, nine out of 10 having their payments made on time and in full. And the vast majority of those who are who have asked for an advanced payment are getting that within 72 hours. So all of this is fantastic. We only to look at what happened in some states of the United States to see what happens when antiquated systems are hit by this the sort of surge we've seen in the UK. Here universal credit has code and it is very much DWP's credit. Now one thing that was contentious in the lead up to the crisis is the five week wait for universal credit. And at the moment the government's response to that is to offer advanced payments. We know that one in three people who are claiming universal credit during the crisis are asking for an advance. Now in our survey we went to those people who didn't request an advance and we asked them why not and you can see the answers here. So the top two bars about 41% said they didn't need an advance because they had other resources to draw on whether that was savings their own earnings or learnings of a partner. But more worrying 38% about another two in five, they were worried about fear of benefit debt. They didn't came in advance because they were worried about getting to debt. And we think this is a really an unhelpful way to think about advances and it's a great shame that people seem to be going without an advance which which could indeed, sorry, they're not asking for an advance when the advance could help prevent them going to hardship. Now to help to dispel this idea that advances equal debt we suggest DWP postpone the repayment of advances for everybody for six months during the current crisis. But generally as I said, universal credit has passed its first test. But what's now clear is the crisis is going to carry on for many more months well into 2020 and possibly the year after. And as the crisis lengthens, new challenges lie ahead for universal credit and DWP. The first challenge relates to the job detention scheme. Now we're due to get details on the trade related this week on exactly what will happen to that. We know it's going to phase out in the rest of 2020. And as the job retention scheme fades out, and as employers are asked to make their own contributions to their employees wages, there is a risk that some will make their workers redundant. And so he must prepare for that second surge when the JRRS phases. Now this doesn't mean that the JRRS has to carry on and that second, you know, it's quite right the JRRS is phased out, but it just means DWP need to be ready, get their staff ready again to cope with that second surge. The second challenge relates to when and how to provide back to work support. Now when the crisis hit DWP quite rightly stopped all work search activities in Job Center Plus and this was to allow their staff to focus on processing claims, as well as of course to respect social distancing rules. But at some point soon they're going to have to switch back to providing back to work support. Now when they do that should be dictated by by the health advice, and also by when the labor market starts to pick up as measured by the vacancy rates. What they do will be the subject of future resolution foundation reports, but it's quite clear they can't go back to the pre-crisis rather light touch conditionality plus sanctions regime. We said they have to devise brand new see brand new schemes that can cope not only with two to three million unemployed people, but also cope with the sort of labor market we find ourselves in. And this is going to require significant resources and additional staffing in Job Centers. The third challenge relates to family budgets and the pressure that an extended downturn will put upon families on universal credit. The good news here, of course, is that one of the first things the government did with the crisis hit was put in a seven billion pound package to social security benefits. It increased universal credit rates by 20 pound a week match those in tax credits, and it put up rates of local housing allowance. And this is providing a very welcome boost to the poorest families. So this chart shows our estimate of what those changes mean to household incomes spread across the income distribution. And this shows that households in the poorest quarter of income distribution for them that benefit increases about worth about 5% of their household income. So that's usually welcome. But as I said a few minutes ago, as the job retention scheme starts to phase out there is a risk that families are going to be moved across from from being furloughed to being out of work and on universal credit. And there they are they are going to see quite a big hit their living standards. There's complicated charts in our reports. Let me try and talk you through it. What we're showing here is a replacement rate, which measures the income you would get if you were furloughed or out of work, expressed as a fraction of the income you would get when you are in work. And we're showing this in two scenarios. One is for when everybody is on the JRS scheme, they're on they're on having furloughed that's shown in purple with the yellow dots. The other is where everybody is is made redundant and has to claim benefits and that's shown with the green bars and the black dots. Now the yellow dots and the black dots show the situation of a typical worker. That's the median replacement rate. And the purple and green bars show the spread of replacement rates that we see within all the groups shown on the chart. Here's on the top row, which is the chart for all all workers. If we look at the yellow dot that shows that if when workers are moved on to the job retention scheme and put on 80% of their previous earnings. Their actual in work disposable income for the typical employee is about 91% of what it was when they were in work. Now it's more than 80% because when we do these calculations, we also account for benefit income and the income of others in the household. The black dot though shows what happens to a typical employee if they're made redundant and they claim social security benefits. And in that situation they're out of work income is 54% of what their income was when they were in work. So there's a really big living standards hit coming up for those families who are moved off the JRS as it was phased out. But of course, we must remember that those families who missed out on the JRS in the first place and this is what they're this is this experience they're having right now when they claim a universal credit. And when we talk to the universal credit and these new universal claimants in our in depth interviews in our surveys, we found that in general they are a bit better off than existing benefit recipients quite a high fraction are still working. They have higher levels of saving that used to come from some of them came from jobs which which which pay reasonably well. And in general, they feel they can cope fine in the short run, but there's a great deal of worry about what might happen if the crisis carries on. So here are just two of the quotes. We'll be able to manage at the moment two or three months I reckon one and another. We're not going out so there's a lot that we're not spending travel and going out generally, all that we are spending money on utilities and food. I suppose we're trying to make food stretch as much as far as possible within about two months from now will be in serious trouble. So this reminds us just like Torsten said introduction that allow there's a lot of focus on the new schemes, when they have been phased out as they will. It's going to be up to universal credit and the social security system more generally that supports families through this long crisis. And that brings us on to our recommendations. So as I said, DWP need to significantly increase staffing levels in job centres to prepare not just for that second surge, but also to help the unemployed back to work. It's going to be a massive task. And secondly, and ideally before the JRS is phased out they should take action to strengthen the safety net. They should suspend the capital rules, which would allow those with more than 16,000 pounds of savings and claiming universal credit. They should mirror the £20 a week rise in universal credit in the other non means tested contributory benefits like job seekers allowance. This would strengthen the safety net for a larger number of families. And most importantly to ensure this coronavirus crisis doesn't become a living standards crisis. The government should confirm that the £20 a week increased universal credit, which is only announced for one year. They should announce that that carried that is made permanent because there's no sign of this crisis having gone away by March 2021. Secondly, it's clear that more and more families are now hitting the benefit cap and so they're not just seeing it, they're not seeing it at all with the impact of that £20 a week rise in universal credit. And so ideally we think the benefit cap should be suspended, but if not, then it should be adjusted so that £20 a week increase is fully passed through and all those on universal credit can see the benefit of it. And finally, as the crisis continues DWP should be monitoring claimants financial situation. And if they decide that any increase in generosity is needed, they should prioritize couples and families with children. That £20 a week was a flat rate rise across all family types. And so it goes isn't going to go as far in large families as it does for single adults. To recap them to the enormous gratitude of those families who are dependent on it universal credit past its initial test and either appears to be complimented on that. Now it has to step up to new policy and operational challenges as the crisis continues. Get ready for a second wave of claims. Deploy resources to tackle the unemployment problem and address the pressure on living standards as the crisis continues. Great. Thank you very much indeed. Mike, there's a lot in there. One thing we want to leave you with is just a recognition that one thing that is weird about this crisis is how different the different stages of it. It's not a normal crisis where there's an economic problem and then we're just dealing with a normal recession. It is a crisis with very distinct phases. The hard lockdown, the unwinding of the lockdown and then the more normal recovery phase. And it's not just the health policy that needs to deal with that difficult phasing. It's all of our economic policymaking too. Now, Neil, you've been delivering all of the stuff we've just been talking about. So what's the insider's version of what's going on? Yeah, thanks Torsten and thanks Mike. It's always a bit daunting following Mike and his analysis is really interesting stuff. I mean, I thought I might just focus on why has UC been able to cope. And that might then inform some of the answers people might want for what you've been describing as the second phase might. And I think the system's been able to cope for six main reasons. First of all, automation. So the system is quite highly automated. It's not completely automated. In fact, some of the changes and things we've had to put in are because it's not. But that high level of automation means that once we get claims through the initial claiming process, the automation can run. And that's how we were able to pay over 100,000 people on one day, for example, new claims, which was heard of really. Mike alluded to this. The system is predominantly digital. It's not completely digital because also some people aren't, but that's allowed us to have a lack of queuing. There was a bit of queuing for a while around the verify system which is run by the Cabinet Office. Where there were some blockages and there were some people queuing there. But in general, you haven't had to queue to get on to you universal credit, either physically or indeed online. And we've really souped up the size of our system in quite short order to make sure that it can cope not just with the volumes it's got now but future volumes too. The simplicity of the system. Now I know any system of social security is going to have complexity in it, but relative to legacy system. It is a lot simpler. That's meant that we initially had a two day training package for people to immediately come and help with that initial surge. And we've now got a three week training package that allows us to train people up to be sort of 90% competent on the system deal with 90% of claim types. And that means we've been able to mobilize people really really quickly into that. It's been pretty good at meeting urgent need. We've done over a million advances. I'm interesting on Mike's data on why people aren't taking them out. We've got similar bits of internal research that shows that as well that resistance from my minority of people to the idea of getting into debt so we know that's a factor. But, you know, we have got one million advances into people's hands and it was probably the first bit of government help to get to people of any of any of the responses and right across government. I think it's been some amazing responses to the to the to the pandemic. And it also was, you know, uplifted the rates. Mike alluded to this by about 20 pounds a week or 86 pounds a month. It's worth understanding a couple of things about that. We were asked, and I was asked by ministers that you know they wanted to help people affected by the pandemic. And what I said was, that meant that you couldn't I couldn't create a new class of benefit climate kind of pre COVID and post COVID on universal credit. So to want of a phrase, there was a kind of windfall gain from existing UC climates from that very, very happy with that to happen. But what it what it does mean is that looking down it through that sort of telescope when you look at something like the benefit cap for example, we didn't perceive that as a problem because new claimants will be coming from work so we'll get the nine month grace grace period. And the legislators I've noticed have looked at from the other way around from the existing claimant pre COVID claimant perspective. That's a legitimate thing to do, legitimate thing to lobby for. But that's why it's that way around. And if you look at the so I call them legacy benefits or the contributory benefits, they are very old IT platforms they are not as nimble or come on to the nimbleness of universal credit in a minute. They basically take one operating year that takes about five months to to organize, which is why we use the September upgrading data, sorry, the September inflation data to upgrade from from April. There were the gestical problem there, notwithstanding the policy choice which was to help people affected by the by the pandemic, but in actually delivering any any uplift. The systems are just not amenable to us to us doing that through an up through an upgrading process. And that leads me on really to the final point really, which is the flexibility of the UC system has been one of the I mean we have changed how we administer claims that we put 270 changes into the system at the last count. And that allowed us to search people from different areas of DWP and indeed other government departments into working on on universal credit we change what is essentially a face to face service in terms of the initial application into something that that could be done down with telephone and done remotely. And that and we did that in the space of days. So that, for example, when we suspended conditionality for three days our staff having to go in and manually change the conditionality group by system change we were able to change that for every new new applicant, and it's that flexibility that I think has given us the scope to respond as we have. So looking ahead to the potential of a second search. And you know I'm, I'm, I'm optimistic that some employers will will respond to the support they've got from from government to effectively labor horde through the pandemic to keep that as they may well remember the experience in the 90s recession where people didn't call it labor and then have real skills problems as employers afterwards so I'm hopeful you'll you'll you'll see furlough working in that way. But should we get a second search, then I'd be keen to protect these fundamentals, which would be to keep structural change to a minimum. It's easier to change rates of benefit than it is to change groups of entitlement. I'm trying to say no to clerical manual processes so when ministers or others may say well, couldn't you do this Neil. Well you could I could put human beings on to a task. The trouble is, in the pandemic, human beings are our biggest point of risk. We have a limit how many human beings we can get into our offices much lower than than before. And making processes that are not reliant on automation that are reliant on human beings adds to your risks that should there be a second search, you can't cope with those volumes. So you absolutely have to try and protect the automation, but I am really pleased with how universal credit responded in the pandemic. We didn't design it for a pandemic. I never have this in my mind that this would be happening we have business continuity plans but never. I think unemployment surges colliding with a with a pandemic I don't think we don't envisage that. So I'm very proud of how DWP and in fact our partners across the welfare sector have responded to this challenge to support millions of our fellow citizens. Thanks to us. Thanks Neil thanks for setting that out and giving us your take on the last few months. Hi, thanks very much for having me Torsten and thank you too for the excellent report that's that's come out today I think. On behalf of the 1250 food banks in our network. And we feel that much of what was in the report today reflects the experience on the ground and and before the crisis hit our research showed that 86% of people who were forced to come to a food bank and their main source of income was benefits so for us universal credit is of intense interest as it is the thing that so many people who come to the banks are reliant on so and thank you for the report today and for the opportunity to speak to it. And I think it's important as the report did to pay credit to a Neil and his team in the DWP as well for the Herculean task they've undergone over the last 10 weeks and being able to respond to such an incredible surge in demand for universal credit. And I think to have delivered that in a timely way for for so many people is is incredible and worthy of recognition. I think as well through the report and many of the government's new schemes, including the job retention scheme and the self implied income support scheme where we're alluded to and we're mentioned and Neil also alluded to them and I think. Again, it's these have been incredibly welcome and we recognize that these schemes have prevented many more people having to come to food banks than we have seen and and held many more people out of falling into financial hardship. However, as as you would imagine, I'm here today to talk about what we're seeing on the frontline in food banks and what's clear from the increase in demand that I'm going to talk through in a moment is that despite these incredible packages and despite the efficiency of the operations within the DWP still many more people are falling through the safety net and are experiencing significant financial hardship. And as a result, we together with other charity partners across the anti poverty sector have asked the government to consider a new range of policies many of which are also highlighted in today's report, looking at how we can put in place. This is an important report to stop people falling through the safety net and ending up having to rely on the services of organizations like like local food banks. We are seeing unprecedented levels of demand, we have publicly released our data for March, and particularly for the last two weeks in March, which is after the pandemic had started. And then we saw an 81% increase in demand, and that increase was instantaneous. So within the first two weeks of March compared to the first two weeks of March last year, we saw 12% increase. Historically last year we saw about a 19% increase year on year in demand for food banks, but in the last two weeks of March we saw an 81% increase in demand. And what was clear to us is that many people were not being caught by the safety net and we're falling through to such a point that they didn't have enough money to cover essentials such as food. And we will be releasing our data for April next week, and we're just finishing analyzing that in the moment but what's clear from what we're hearing from our food banks on the frontline is that demand has not decreased in April and they continue to be under unprecedented the needs of people in their local communities. Our data has shown us that families are being particularly affected and we have seen a 122% increase in the number of children who we've had to provide emergency food support for. That is a doubling that represents a doubling in the numbers of families with children that we would normally see within a food bank, and that was was immediate at the outset of the pandemic. Low income continues to be the key driver of why people are referred to food banks by frontline referral agents. And again, we've seen a doubling in the number of people who are being referred for the reason that the income they're receiving primarily through benefits is insufficient to cover the costs of essentials. What was was extremely interesting and looking at reading the report today was that what it identifies really clearly is that the UK social security system provides fairly low levels of income replacement with people losing around half of their income. When they move on to benefits and out of work as was shown on Mike's chart a moment ago. And the report was on to say that the logic behind this is that with the UK's fast moving jobs market job seekers would be able to find work quickly and should be incentivized to do so. But also as the report says the coronavirus has upended that assumption. And certainly for people coming to food banks at the moment it's incredibly difficult to expect that they would be able to look for or gain employment during these times. And therefore, for that reason we believe an additional set of policies need to be put in place to protect people over this time, whilst the jobs market is such that it's not easy for people to find new work and move into it quickly. Firstly, from a policy point of view we need to ensure that income levels are able to keep people out of poverty. The government's job retention scheme has was set up firstly to keep people linked with the employers they're with in the hopes that they will be able to return to their work. And after and furloughing is finished and they're able to take up their jobs and continue working, but also it was set at a level to ensure that people families were held out of financial hardship. But what we can see from the report today is that on average people who have been furloughed and have moved on to the job retention scheme have seen a drop off in their income of just 9%. Compared to people who potentially lost their jobs or their businesses were not able to furlough them potentially because they closed and have had to move on to universal credit who have seen a 47% decrease on average of their disposable income. So the comparison there is significant. Both groups of people are facing a market where potentially it will be hard to find work over the coming months. But for the people who have moved on to universal credit, they have seen a much more significant income shock and drop in income. And as has been highlighted by Mike, and potentially with the second wave with a reduction going forward of the job retention scheme will see more people facing that income shock. So it's very important that as we consider what universal credit needs to be in a market where it's not so easy for people to find work and where the expectation cannot be that they will only be on benefits for a short period of time and then move into work. What what level of income do we need to put in place to ensure that nobody is facing the kind of hardship that sees them having to come to a food bank. We would say that within that as well be important to address any disparity between legacy benefits and universal credit, considering that people on all forms of benefit are facing the same jobs market. And it's important as has been highlighted that where families have been particularly affected that nobody is left behind. And again, benefits cap a two child limit are two things that particularly disproportionately affect families with children or families living where housing costs are higher. So we would say that those are two things that are preventing people who need access to the additional benefits that have been put in place, being able to access them. And we would look for we would ask the government to look for ways in which they could increase benefits particularly for families with children during this challenging time. So just to conclude out we would say that policies such as benefit caps and two child limits were agreed for a time when people could look for work and we are now moving into a period that we we imagine will be for a much longer period of time than just a few weeks, in which it's unlikely that people can swiftly move off of benefits and back into work. So we need to consider what policies need to be put in place and we are keen to work with government on what those policies can be that ensure people have enough money that they never need to come to a food bank. Great. Thank you very much, Emma. That's very sobering summary of what you're saying on the ground. Let's let's for the rest of this conversation. For the audience, what we're going to do is structure this in two halves. We're going to first of all focus on talking about what's happening now, what we can see happening over the last few weeks and months on the delivery side and on the human side of what's going on. And then we're going to turn to the future challenges facing universal credit of the kind that Mike set out in his presentation. But before we kick that off, I think we're going to bring up the results of the poll that you've been voting on while we have been talking about how flexible are our views to new evidence turning up is the question. And you have become so mainly you're not very flexible. It's my main takeaway out there. We've seen lots of evidence. But in so far as we are flexible for the half of people who are flexible. Then we are two to one coming more positive. Okay, so thank you very much indeed now on the to kick off our discussion about the status quo. So I think Neil has covered the questions from questions from Samantha and about this issue about why are we not operating old legacy benefits that the contributory system, the people who wouldn't get the means to universal credit are able to claim for at the moment and why haven't those been increased in line with universal credit which is basically it would be nice to do that but the it doesn't let us. And also whether what you're satisfied with it is another question but that is the you've been given an answer to it. Let's focus on this broader question which Emma is raising but other two which is who falls through the gaps. So where are the challenges why are we seeing big increases of people coming to food banks if universal credit payments are having happening quickly. So what I mean to kick off that conversation is have a there's a question from Liam on the savings rates issue. Which is basically how is the savings to remind everybody within universal credit you have a normal income means test so if you've got a partner earning lots of money and you lose your job you don't get to qualify for universal credit. But you also have a savings means test. So you have savings above 16,000 pounds you don't get access to universal credit. Now there is a taper system in there. But it's a question about the nature of it so is that a big driver of what you're seeing so there's a savings means test reason you might not get universal credit as your partner has other income or there is you might not be eligible. At all for example if you are you don't have access, you don't have a course to public funds, maybe because of your migration status you may not have access to universal credit so where do we think there are people who are falling through the gaps. But take that up first. And certainly for us when we've seen such a significant increase in the numbers of children coming. It's very clear that particularly families with children, both single parent families and two parent families have both seen a significant increase in the numbers that are coming to food banks and I think there are additional pressures on households during this time in terms of additional costs of supporting children at home potentially where there's no access to free school meals and other childcare potential where food will be provided so just the additional costs of having children at home mean that that is more expensive. At the same time, the uplift and benefit which was flat rated across is not penetrating to families to the same degree because the per capita increases it doesn't factor in with families with larger numbers of children and also they are hitting up against things like the benefit cap and the two child limit. And so we have heard just to push on that to understand so is your view that the people coming into the food banks in general are lots and will be receiving universal credit but having problems with the level of it or they're not beginning access to universal credit. So we are definitely seeing an increase in the number of people who don't have access to universal credit, but that is not the majority of the people that are coming in the majority of people coming in will be receiving universal credit or other benefits. And nonetheless, they're saying that the benefit the income they're receiving from their benefits is insufficient to cover the cost. That's very clear. Mike, do you want to come in on just general where the gaps where the gaps might be in terms of who's coming through. Yeah, absolutely. I mean, what we outlined in our report is that there are some people who if they're made redundant will see a really large fall in their income. And that's going to be principally those people who don't get to claim universal credit when they lose their job, either because of the savings limit or because they have a partner with earnings. I mean, it's not it's not clear yet whether those are also the people who would then have to claim a food bank. So you might think that somebody with 16,000 pounds in the bank probably would not need to go to a go to a food bank and simply somebody who has a partner in work probably have enough money to get to avoid going to a food bank. But there are certainly those those two groups of people who individually when they if they made an employed or if they fall off a JRS they're going to see their standard of living fall really quite sharply. The groups who are missing out on support altogether. You've mentioned those with no recalls to public funds. And then I think yeah that really the group that Emma is highlighting are people whose whose needs are not being fully met by universal credit either because they're bumping up against the benefit cap or they've got more than two and all the flat rate 20 pound a week is doesn't really go very far. If you have if you have children and particularly when you when you factor in the vouchers system for free school meals might not really be providing a suitable substitute. Okay, why don't we then take another bunch of questions around this. What's going on right now element of this discussion so focusing on who is actually coming on who are the kinds of people coming on to universal credit Neil. I'm going to put up a question from Duncan. We can bring it out which is mainly asking how how middle class is the new inflow basically how do they differ to the existing UC payments in particular there's a number of elements there there's Duncan is asking basically does that change the long term people's views about universal credit but but let's just kind of come to that but focus initially on who is flowing on. How do we think their needs are different to the existing payments levels of in work maybe versus out of work to Neil do you want to go first. So we've seen a profound shift in the nature of people coming on to universal credit pre COVID. So before COVID there were there was a declining proportion of people who were unemployed coming on to universal credit. You're now obviously seeing a much bigger proportion of unemployed people coming. There was a short phase spike of self employed people. Mostly around the announcement of the self employed income support scheme there was a peak. And the press saying it was a bit of peak and but that's dropped back to the normal levels of claims from self employed people. And we've seen the system work so we've seen quite a lot of universal credit people who were on pre COVID but their earnings have gone down. So they've stayed on universal credit but they're getting more universal credit as a systems adapting. I mean it's interesting links back to the previous point which I won't go back to too much but the reasons why people are not entitled. 10 not to be capital there's a very small amount of I mean women model manage migration I think you have 20,000 people with capital coming from tax credits over about over a million so it's not a big situation there. The thing that is denying people universal credit moment is partner earnings or their level of earnings have reduced but not to the level that universal credit would take up the strain. So that's all people that when we in the report I can't remember the percentage might but we see the number of people coming through who then don't put who are who applied but then didn't get the benefit eventually because they were ineligible. That's what you're seeing is that that drop off is being driven by partner earnings. And the drop off is slightly higher than pre COVID I think the last time I looked but not not massively so but the characteristic tends to be that there's a partner working or you know it's the income of the household. Okay, that's really good to hear on this on this question of like the background so insofar as we can see in the survey data. So as you say you've got you've got something slightly old going on which is the people coming on will tend to be in some ways lower income than the predecessors because they're more they're more likely to be unemployed. But their previous income may well be higher than what you will have been used to for people coming on to people in universal credit who are long term universal credit users will generally be lower income over their lifetime than those who are flowing on in the middle of a crisis and that is one of the things about policy in a crisis which is your population is a different group of people to the ones that you would have in the is that is that coming through Neil. So that's that that is coming through a bit so people are suffering, you know as Mike's report pointed out big income drops from from their jobs. There's also an interesting geographical spread this came out in the state to last week, but the highest number of claims are actually the southeast and southwest and Northern Ireland. The reason I don't know the Northern Ireland system it's not we're not responsible in GV for that. There are but there's a coastal town pattern as well. Things like tourism, hospitality, they're the sectors taking the big, the big hits here. You know manufacturing is being protected I think by following a lot, a lot more but it's those sorts of jobs that are going there. So Cornwall has been badly hit bits of the southeast quite quite badly hit it's not the normal north south divide that we see in previous recessions. I think that's driven is that driven by UC's relatively generous treatment of renters as in they've got the higher rents are in the south so you're more likely to claim some universal credit. So there's some there's some renters thing here but I think it's what's with its, it's being driven by the nature of the jobs market. Okay, great. There might do you want to come in on just a bit on what because there's more detail report on who we think is flowing on. There's absolutely actually tons of facts in our report on this, I think. Don't do all of them. No, I know it's so tempting isn't it. Okay, well we did find a high portion of self employed so one in four of the new claimants we found were self employed that's much higher than their than their instance across across the population and that's entirely sensible for them to claim universal credit either while they're waiting for the self employment grant or maybe they're not eligible. So a higher fraction do not have children compared to the existing caseload who tend to have children and this is this is probably because if you're on a low income and have children you're quite likely to already be on universal credit so that new people flowing on don't have children. And a higher fraction than the existing caseload are private renters and I will probably like to facing higher high rental costs and indeed we've been benefiting then from the increase in housing support that was provided by the government. A lot of rainworks still obviously if you've lost their job, there will be many unemployed but a lot are in work still on low earnings and it really reminds us that universal credit is not just an unemployment benefit anymore it's there to support people who are on a low earnings. Some people will be in furloughed and have their earnings cut low enough so they can play universal credit but it's going to be there to support not just unemployed but also those on low earnings throughout the next crisis. Okay, thanks Mike right we're now going to just we're going to kick us off into the second bit of this conversation which is what one of the long term future challenges facing the crisis I think we're going to bring up a chart for you to have a go at getting your accuracy of your economic data knowledge. Okay so this is the chart that again you can this freeform text entry on Slido for you to tell us what this chart is just a small hint, both lines are showing you different ways of thinking about what something. So the key is what is the, what are they kind of showing you if you get what both lines mean, then you get a double price, given that the price is absolutely zero, then zero times two doesn't get you very far. Anyway, however on that while we kick off the conversation about the future challenges. So here really we're thinking about both what's going to happen in the crisis but also, given that it may go on some time does the just length of it change the nature of the challenge facing. So why don't we, so Mike set up one of the issues which is, so the chancellor this week is setting out the next phase of the job retention scheme, where he said that from August employers will have to pay a percentage as yet to be announced and then to be announced the next day or two. What percentage of the furloughs costs they will pay that will lead to some people flowing off the job retention scheme is their employers lay them off made them redundant. So the idea is obviously that it also leads employers to be encouraged to bring people back so there's a benefit as well from doing that. But the calibrating that is the real tough decision go too far and you get a big number of layoffs go too soft and you get a slower recovery than you'd like to see. So how is prep going for, you said earlier, you know, hopefully there won't be a big, there definitely shouldn't be a spike of the scale we've already seen. If we see a second spike, how are you planning for that. Yeah, so. Yeah, you're getting me because when to that connections with dodgy must be next must be the Xbox is being played upstairs. I'm trying to stop that and the least the moment. So, we are doing a fair bit of kind of conditions planning as you will expect. We've actually also the job centers are going back to helping people into work. We don't need the mass processing capacity that we switched on there. So we flip that back with an eye that we might need to do a backflip into those arrangements and clearly, you know, we've proved those work very well. The other thing I was just going to also got the mic because you probably come to other policy bits which won't be for me to comment on but just a bit on history here. I noticed there's been quite a lot of debate about what what the help the job center should be giving what what government response should be just a word to history here. I think there's a bit of a sense in everybody's memories that somehow that help was available immediately. I just draw people to the fact that the Future Jobs Fund didn't start till October 2009, some 12 months after the start of the crisis back then, and the young person's guarantee was only in place from January 2010. So it does take a little bit of time to mobilize responses. And this isn't a normal economic shock as you've alluded to Torsted, but typically I tend to think of them like, if you ever remember any geography, the kind of escarpment and the dip slope. The escarpment tends to be where their numbers go up very, very fast. And the dip slope and what you need to do is intercept policies for these to get support people back into work because the labour market will respond. Okay, thanks Neil, you'll return your camera for a second to give your connection a chance to overcast it. And we're in terms of this kind of the question might raise earlier about, you know, somebody can maybe lots of people may be able to cope for a few months on even half their previous earnings, but that's a very different business if you have to survive for six months on those kind of earnings. So how are you thinking about that. I think I think I was just thinking exactly that I think that's the, the, what Neil said as well as well as what Mike had said in Mike's reports and in speaking to the people you interviewed 80% of people were saying that they're worried about their finances going forward and I think people are incredibly resilient. And we see that all the time in food banks people have gone for long periods of time without coming to food bank. They try to come as little as possible so on average people come to a food bank in a year only seven times. So people are incredible at trying to make things make ends meet and get through. But there's only so long you can you can do that in these kind of circumstances and I think what Neil is saying is particularly important as well that in order to put job job support schemes in place and support the additional support people may need to move back into employment. That will take time. And so we have a position at the moment where we need to look at what those interim measures are what they the temporary income support scheme will look like where it's not realistic to assume people move swiftly into work because a the jobs are unlikely to be there and be they maybe in different places from where they were before and people might need to be supported with training to move into them. So what does it look like and what what support needs to be put in place to ensure people have enough money that they're not having to turn to food bank. Mike why don't we take a question which is what what should what data should we be looking at to think about when the move comes to thinking well, as well as focusing on people protect people's incomes, we need to dial up the attempts to help people get back into work. Absolutely yes and I know I'm not trying to criticize DWP at all for not having a future jobs when operating right now that would that would be pointless I mean that the really key thing to look at is the vacancy rate. There is very little point in encouraging forcing help people look for work if there are not no jobs to be found that we saw a couple of weeks ago data for vacancy rates in April. You know, get your superlatives out there you know fell off a cliff, we need those to get some way back towards a more normal level before we can even think about, you know, before there are any jobs to get the unemployed unemployed to look for. So that's the key statistic look at the vacancy rate. As you say to also hopefully is the JRS, you know, eases down it will encourage firms to start doing a bit more. They might be able as activity starts to pick up in sectors as the lockdown goes away. Some firms will want to hire new people, but until that happens there really isn't any point in providing practical works at CHELP. Keep an eye out for the vacancy data basically. Now why don't we take, let's first of all show the results from this chart and then I'm going to take a very heavily related question which is for you Mike. So if you can maybe can we show you the what people have given us as their answers. Well the top ones cheated because that's basically the answer. In fact you've all got the answer basically more or less they're not quite everyone, but they're okay so the, but this is a remarkable success rate. I hope you haven't all been sharing your answers with each other. Okay, so why don't we just pull up quickly the actual chart to show you what the make clear what it actually is. Here we go we're alive on my IT skills right. Okay, so this is the chart that we showed you and this is the version with the labeling so the blue line is showing you in real terms how generous the basic out of work benefit for a single person is this is to keep it simple focusing on single people here which is you can see that they're obviously in real terms it goes up over time although it didn't go up much from around 2000 until the big increase that's just happened. But the in the in the over the long term obviously in terms of how generous a benefit system is it doesn't make much sense to focus on real terms because ideally your economy is growing and your generosity is growing in line with that so the red line is focusing on how the system goes up to average earnings. The big big long term picture here is long term decreases in generosity from peaks in the 1960s that's the red line coming down but again you can see a big increase recently taking us back to the early 90s levels of generosity I'm going to go through this and bring up the question on Slido from Stephen who is asking a version of a version of where does this take us does this does the fact that we've increased it by 20 pounds a week show that there's something going on so Mike why don't you give us like what how should we think about adequacy rates of benefits given some of the work in your paper. That show reminds us that 20 pound a week increase was just really very substantial for single people it didn't just undo the four years of benefit freeze and the previous governments you know it did far more than that. I don't think that many organizations would have claimed that the rate to universal credit for a single person does provide you with that a good income so whatever benchmark you use you could be there's the income standards approach to working out what what you need to live on living wage kind of calculation so we think we think we here we had a pretty good idea that the single rate of universal credit was not going to be enough for people to survive on. So I mean what what's changed of course that is is what well that the shock is different from from a normal economic activity and what's changed the is the fact that people who are being hit by unemployment now as we've all said are not likely to move into work as quickly as otherwise. And also with the scale of the shock to the economy, perhaps this is another way of putting putting a bit more accurate demand back into the common providing a little bit of a demand boost which will help as we as restrictions. Thanks, Mike. Can we just bring up the last poll then for the audience to vote on which is giving your version of the questions we're discussing here which is basically is, what is the what do you think is going to be the biggest challenge facing universal credit in the for the next phase of this crisis now three of those are ones covered in Mike's presentation at the beginning so making that second wave of claims actually happen. Hopefully a small second wave, and managing this larger longer term falls in living standards that people are currently facing and then getting the unemployment rate back down again. But the second one of those is not something we've touched on I think Neil you've been a good place to give us a like how obviously you've removed lots of the elements of a claim to make sure the processing can actually happen. So with it unavoidable increases in fraud risk and that's a price worth paying for making sure the processing can actually take place but how are you thinking about both current and future fraud risk in the system. Yeah, so unfortunately there is a there is a little bit of an increase in fraud mirror going on as you'd expect. Some people trying to exploit what we've done, and we made these changes knowing that there'd be that small impact. We are currently looking at well what can we do to counteract that. It's a little bit of a kind of we see what they do we then respond kind of going on there, but there are things we can do remotely offer for example data matching that correct for some of this stuff. So you'll see more of that coming into the system again it is to try and do it and to be to stick with the automation wherever you can, because I could put a bunch of clerical processes in. But it would slow everything down and then you'd see real hardship for people who are not trying to abuse the system. And we've, we're on the side of people, you know, not trying to abuse the system and trying to support them through this pandemic. That's what we're trying to do. So we did a set of in the report there's a set of interviews with people who are new claimants to Universal Credit about their experiences here as well as the survey data that we showed you in there. One thing that comes through from taking those as a whole is people in general quite like the combination of principally a digital system, but that getting a phone call from somebody is possible if you get stuck basically it's the kind of matches to honest how people talk about using online shopping. They want to know that there's like a backup there. Is that, is that maintaining that volume of phone calls and things doable and is that reducing fraud risk. Yes, and that's one of the things we've been doing. I mean, on the peak day we had 2.2 million phone calls. I'm sorry we couldn't answer those. It's just impossible. But we have updated and increased our capacity on the telephony people are now getting through on the phone. And we've started a don't call us we'll call you approach as well, which, and we've also we're we're on masking our calls. So people can see it's a call from the DWP to try and reassure people to take the call. There's quite a lot of people are not answering our call backs at the moment. So what comes up on my screen if I get a call from you now. I forget it's the it's the exact number that we call you from. So if you've tried to ring us, you'll get. I see. Okay. Okay. Before you just got a, you know, a mask or thing, most people don't take my school, my children telling me now. Turns out not so much. They'll be lucky to answer any calls unless someone tweets out and they're ignoring the whole thing. Now, look, no, why don't you give us your what's the one thing that you're most worried about thinking about the future. And then also same question from Mike and Emma. Well, the one thing I'm worried about is that we, you know, I agree with what people are saying about the importance of job centers returning to providing help as Mike says there's no point until the vacancy market has responded but we need to quickly get in and support there because we know that the longer you're unemployed, the greater risk is you stay unemployed. So we want to get back into that into that world and, you know, COVID makes it very hard. We can't do face to face in the world which we've done so we're trying to think about what we do how do we adjust our services for this world in much the same way that retail having to rethink their business model. Other services having to rethink. So we're doing a bit of that now we want to get. Great. And then Mike and Emma might want to go first but make sure it's swift because I promise people lunch lunch now back to Mike. I think the thing I'm most worried about will be the duration of this crisis and what the sort of cumulative impact does to people to financial strain family finances. Okay. Impressively quick Emma. Mike, what Mike said and and add to that the insufficiency of food banks to be able to continue to support and provide adequate support to all of the needs that people who are facing financial significant financial hardship are experiencing and for how long that will go on. Okay. Thank you very much. And then it's for a change for an event. Let's hear last from the audience around the panel. So what I mean bring up the poll answers for the audience is anxiety is, which is so that is the lasting basically focused on the top two issues of the ones that the panel have just raised so getting unemployment back down at the bottom those and you'll set out and then how to manage the lasting living standards shock that Mike and Emma have raised. So I'm sorry we've slightly overrun but can I just say thank you very much to to Mike Neil and Emma for giving us their thoughts and thank you for joining us today. And you will get, and there's a feedback session on this if you want to give us your thoughts on whether the session was useful to you or which bits of it were or weren't be nice. That is also available on Slido and there'll be other resolution foundations, then it's coming up in the near future so thank you for joining us thank you to our panel and have a good day everyone.