POLITICS

Welfare Reform: Minister Lord Freud Told Single Benefit 'Universal Credit' Plan Is Not 'Credible' After Revealing Roll-Out Figures

04/11/2015 16:32 GMT | Updated 04/11/2015 18:59 GMT
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The Government's welfare mastermind has been warned plans to get millions of benefits claimants on to a flagship single hand-out within five years is not "credible".

Lord David Freud, the work and pensions minister, wants seven million people receiving the new Universal Credit by the "end of 2020", despite only 146,000 people being on the system to date.

Labour MP Steve McCabe questioned "how on earth" he was going to achieve a "massive" increase in take-up, and told The Huffington Post it risked a "recipe of chaos" for the benefits system.

The minister also said he was "talking" to George Osborne about the Chancellor's revised cuts to tax credits after a former advisor to his boss, Iain Duncan Smith, warned the U-turn could damage the flagship programme.

Universal Credit, arguably the centre-piece of the Tory overhaul of social security, will replace six of the main welfare benefits, and tax credits, with a single monthly payment.

The aim is to save billions of pounds of taxpayers money but has been dismissed by previous Governments because it is too complicated to implement.

Being grilled by MPs on the work and pensions Parliamentary select committee, Lord Freud said he was "quite confident" the plan would succeed.

He explained the project was following an "S-curve", which involved a "careful start, big ramp, and then a tail at the end".

Asked at what stage the scheme was at, he said: "We are coming up to the approach trajectory."

But Labour's Steve McCabe, who serves on the committee, questioned whether the target was realistic given the modest number of people on it since the programme was "re-set" two years ago.

The MP said: "If we're at 146,000 and we're at the bottom of the S as it begins to rise, and you want to get to 7 million by May 2020, that would suggest by any standard you've got to be near 3 million in less than 18 months time.

"You've got to have a massive escalation at some point. How is that credible? I'm wondering how on earth you seriously believe you'll hit that figure."

He told HuffPost UK later: "This matters because if you can't get your projections right what does it mean for your projected savings and does that mean people will suffer? You're left with a fragmented benefits system and a recipe for chaos."

In response, Lord Freud insisted there would be "a massive escalation" once the system has been tested fully.

And he defended Universal Credit for "producing benefits of £7 billion to society a year", adding: "I will not hurry the department to do something that is so big."

"It's the most incredible programme. It's much more efficient way of getting money to the poorest people," he said.

george osborne

The Chancellor has been warned against damaging Universal Credit to was tax credit problems

Philippa Stroud, the chief executive of the Centre for Social Justice and former adviser to Work and Pensions Secretary Iain Duncan Smith, today warned the Chancellor against taking money from the Universal Credit scheme as he looks to lessen the impact of £4 billion of tax credits savings.

Questioned by the committee whether the prospect of the Chancellor raiding the Universal Credit budget would delay its roll-out, Lord Freud said: "It doesn't give me cause for concern about the roll-out. That's a slightly different issue."

He went on to say changes to tax credits would mean "parallel changes" to the so-called working allowance element of Universal Credit.

He added he would "doubt it" if tax credits still existed in 2020, meaning they would be replaced by then.

"We will go on talking (with the Treasury) because the two systems are in parallel," Lord Freud said.