The government's scheme to overhaul the welfare system has been the subject of much scrutiny in Westminster, but now the same is happening outside a north London job centre.
Two claimants become animated as they wait for the next part of their appointment inside
No, they don't want to do an interview - but yes, they have something to say about Universal Credit - the single payment streamlining six current in-work benefits. One woman was supposed to sign up to it, she says, only to be told she wasn't eligible - and doesn't know why. Another thinks paying housing costs directly to claimants is a terrible idea which some people will find impossible to manage.
Delays It is hardly a representative survey about one of the biggest changes to benefits since the start of the welfare state, but it tells you something important: Universal Credit has arrived. It is now up and running in 690 jobcentres and will be available for all single jobseekers in all jobcentres from the end of April. Almost 405,000 people have now made a claim for Universal Credit.
After delays, IT problems and an entire "reset" of the system - the piecemeal, if deliberately slow, implementation has begun. But that is the simpler part; the Department for Work and Pensions (DWP) now has to deliver the changes to 20 times that number of people, many of whose cases will be far more complex, in a project already running several years late
And it no longer resembles the scheme originally conceived under former Work and Pensions Secretary Iain Duncan Smith, at a cost of £1.7bn to implement.
Universal Credit was meant to bring "radical changes" to people's real incomes and incentivise them to move off benefits and into work, according to David Finch, a former economic analyst at the DWP.
"But... the strength of the improved incentives it was meant to bring have been gradually eroded," he says, speaking in his current role as a researcher at the Resolution Foundation. There have been significant tensions between the Treasury and the DWP over its cost. Last year the government announced funding cuts to the universal credit "work allowance" - reducing the amount people can earn before benefit payments are withdrawn.
'Great idea' Labour believes those changes have left the project in a perilous situation. "Universal Credit is a great idea that unfortunately is running the risk of being stillborn as a result of the cuts that Osborne and Iain Duncan Smith oversaw," says Labour's work and pensions spokesman Owen Smith. "It should make work pay for people but unless (new work and pensions secretary Stephen Crabb) reverses the cuts to the work allowance and restores the work incentives it's going to leave millions of people worse off."
Iain Duncan Smith's resignation in March came amid a febrile atmosphere over planned government cuts to disability benefits - later reversed - resulting in the effective protection of the welfare budget at current levels. The former cabinet minister criticised the "cutting away and eroding" of universal credit and an "assault" on its incentives system while he was in office. But those close to Mr Duncan Smith regard other criticisms of Universal Credit as over-played and a "media narrative". One source said the project was now "wholly owned by the civil service" and that there was no concern that Mr Duncan Smith's departure compromises it. Certainly the speech by his successor Stephen Crabb confirmed that. Mr Crabb said he was "absolutely committed" to the reform, describing it as "the spine that runs through the welfare system". So where does all this leave us?
Despite many people losing out after last year's changes, the Institute for Fiscal Studies thinks the objective of Universal Credit remains broadly intact - some of the worst disincentives to moving off welfare and into work will be gone under the new system. Government officials claim it will help generate £7bn in economic benefit each year and say it will "revolutionise" welfare. But its biggest challenge may lie not in its politics or even divided opinions over its funding, but in its delivery. In May it will start to be made available to all types of new claimants, including those on ESA illness and disability payments where perhaps greater political sensitivity lies. The full service will be available at five new job centre areas per month, ramping up to 50 a month in 2017. These will be testing times for a project aiming to reach eight million households by the end of this parliament.
A key problem in microfinance is that it takes nearly ten times as much work and cost to assess, process and manage ten loans worth $1,000, as it does to assess, process and manage one loan worth $10,000. The total income for the financial institution from these two cases is likely to be similar if not identical. There is a cut-off in loan and deposit sizes below which banks lose money on each transaction they make. Poor people usually fall below this cut-off. In addition, most poor people have few assets that can be secured by a bank as collateral. As documented extensively by Hernando de Soto and others, even if they happen to own land in the developing world, they may not have effective title to it. To address this problem, Schulze’s credit unions introduced the concept of the bond of association. This type of bond, which drew on informal systems of lending like ROSCAs, was developed fully in Raiffeisen’s village credit unions, helping to reduce the costs and risks of lending to people of good character but limited means. By bringing people together in pursuit of a common goal, it also strengthened local communities. An early credit union historian describes the impact this way:
In other words, the Raiffeisen Banks capitalized on the social dynamics of rural neighbourhoods to overcome barriers to service delivery. A villager who chose not to repay a loan could face social disgrace, sanctions in church and/or severe economic consequences like losses of opportunities to work. In contrast to the credit unions, urban banks that lacked these local information and enforcement advantages could not profitably serve this market.
The federating approach marked a distinctive departure from conventional thinking about economies of scale in business. Traditional businesses achieved scale through a single, centralized head-office with power delegated to branches. The cooperative model inverted this method, instead scaling up one of its founding principles: individual cooperation between members. Individual credit unions delegated specific powers for specific purposes to a federal body, with residual powers remaining in local hands. By respecting the principles of democratic control and subsidiarity credit union leaders were able to achieve vast economies of scale without surrendering local autonomy.
Compared to Schulze’s urban credit unions, the village banks of Raiffeisen were smaller and had to rely on much more limited human resources. This made them very vulnerable to fraud and mismanagement, and (independently of any actual problems) very vulnerable to public skepticism. To address these problems the credit unions formed auditing associations. “Some of the auditor’s responsibility was simply auditing, but much took a more constructive role, providing the local cooperatives with helpful materials and eventually setting up formal training courses for cooperative managers.”  This dual role emerged from private sector incentives and was funded from within the movement, by user fees charged to the credit unions.
Even before they had fully consolidated in Germany, credit unions began spreading across Europe. In 1864 Léon d’Andrimont formed the first of many ‘people’s banks’ in Belgium, in Liège. In 1865 Luigi Luzzatti, the ‘Schulze-Delitzsch’ of Italy, founded the first credit union there: the People’s Bank of Milan. In 1872 the Co-operative Wholesale Society in England formed a retail deposit and loan department, which eventually transformed into The Co-operative Bank familiar there today. In 1878 a network of ‘people’s banks’ formed the Groupe Banque Populaire, and four years later the first credit union in the system now known as Crédit Mutuel was formed in Wantzenau, near Strasbourg. In 1883 Leone Wollemborg, the ‘Raiffeisen’ of Italy, formed the first casse rurali in Loreggia. Credit unions also spread to Austria, Switzerland, Hungary, the Netherlands and the Balkans by the 1890s. By 1889 the movement had spread to Baroda state in British India, where the Anyonya Co-operative Bank Limited was formed.
The first credit union in North America, the Caisse populaire de Lévis in Quebec, Canada, began operations on Jan. 23rd, 1901 with a ten cent deposit. Founder Alphonse Desjardins, a reporter in the Canadian parliament, was moved to take up his mission in 1897 when he learned of a Montrealer who had been ordered by the court to pay nearly $5,000 in interest on a loan of $150 from a moneylender. Drawing extensively on European precedents, Desjardins developed a distinctive parish-based model for Quebec: the caisse populaire. In the United States, St. Mary's Bank of Manchester, New Hampshire holds the distinction as the first credit union. Assisted by a personal visit from Desjardins, St. Mary's Cooperative Credit Association (now named St. Mary's Bank) was founded by French-speaking immigrants to Manchester from the Maritime Provinces of Canada on November 24, 1908. As the leader of St. Marie's church, Monsignor Pierre Hevey was instrumental in establishing this credit union. Attorney Joseph Boivin managed the credit union, as a volunteer, out of his home in the evenings. America's Credit Union Museum now occupies the location of Boivin's home, where St. Mary's Bank first operated. Pierre Jay, a central banker and Edward Filene, a Bostonian merchant and philanthropist, were instrumental in establishing enabling legislation in Massachusetts in 1908. Filene's philanthropy, combined with the practical implementation efforts of his associate Roy Bergengren were critical to the emergence of credit unions across the United States. Unlike the credit unions of Germany or Quebec, most credit unions in the US emerged from an employer-based bond of association. In addition to the traditional information and enforcement advantages resulting from the fact that members shared the same workplace, the employer-based bond permitted credit unions to use future paychecks as collateral.
The Credit Union National Extension Bureau, the forerunner of the Credit Union National Association was formed as a confederation of state leagues at a meeting in Estes Park, Colorado in 1934. Attendees at the meeting included Dora Maxwell who would go on to help establish hundreds of credit unions and programs for the poor in her lifetime and Louise McCarren Herring, whose work to form credit unions and ensure their safe operation earned the title of "Mother of Credit Unions" in the United States. In 1932 Bergengren, at the invitation of Canadian priest and adult educator Moses Coady, drafted a model credit union law for the English-speaking province of Nova Scotia. The law was ratified in the provincial legislature the same year, and credit unions rapidly spread to the other Anglophone provinces. The development tools used by the Antigonish Movement led by Coady injected a much stronger populist tone in credit union development, and these methods were spread widely in the developing world after World War II