Universal Credit may never deliver value for money

The Government’s controversial Universal Credit programme has not yet delivered value for money and possibly never will, according to the National Audit Office (NAO).

In a damning report published today (15 June), the watchdog says the flagship welfare policy has taken ‘significantly’ longer to roll-out than intended and could end up costing more than the benefits system it is replacing.

According to the NAO, Universal Credit’s current running costs are around £699 per claim, compared to the target of £173 per claim by 2024/35.

The report also notes the roll-out of Universal Credit was due to have been completed by October 2017, but only around 10% of caseloads are currently claiming payments under the scheme.

The report also claims the Department for Work and Pensions has not shown sufficient sensitivity towards some claimants and that it does not know how many claimants are having problems with the programme or have suffered hardship.

In 2017, around one quarter (113,000) of new claims were not paid in full on time. Late payments were delayed on average by four weeks, but from January to October 2017, 40% of those affected by late payments waited in total around 11 weeks or more, and 20% waited almost five months.

Despite improvements in payment timeliness, in March 2018 21% of new claimants did not receive their full entitlement on time with 13% receiving no payment on time.

The NAO estimates that between 270,000 and 338,000 new claimants will not be paid in full at the end of their first assessment period throughout 2018.

And the report claims the Department believes it will never achieve 100% payment timeliness because it needs by law to verify the claimants’ eligibility.

‘The Department has kept pushing the Universal Credit rollout forward through a series of problems,” said NAO head, Amyas Morse.

‘We recognise both its determination and commitment, and that there is really no practical choice but to keep on keeping on with the rollout.

‘We don’t think DWP has shown the same commitment to listening and responding to the hardship faced by claimants. Maybe a change of mind set will follow the publication of the claimant survey on 8 June. We think the larger claims for Universal Credit, such as boosted employment, are unlikely to be demonstrable at any point in future. Nor for that matter will value for money,’ added Morse.

‘Failing on its own narrow terms.’

The director of action and research at the RSA, Anthony Painter said Universal Credit has failed on its own terms and must now end.

‘The NAO’s report shows that Universal Credit is failing on its own narrow terms – it promised savings but is costing more; it promised to be easier to deliver but is proving an administrative nightmare, and most importantly, it promised to be much more humane but has led to delays, debt, and destitution,’ added Mr Painter.

‘Even if it had succeeded on its own terms, this costly and complex new system misunderstands modern economic insecurity, which RSA research shows is widespread in the UK: 40% have savings of less than £1,000,  4 in 5 worry inflation will outstrip their pay, in-work poverty has become more common so a job is often not enough, and 47% of those “just managing” are worried they will need to relocate due to housing costs.’

Last month, the work and pensions select committee claimed the flagship policy has been ‘designed with little regard for the reality of self-employed work’ and could crush potentially viable businesses.