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Universal Credit, the Government's Flagship Welfare Policy, Has Become a Fiasco

Posted: 05/12/2013 17:32

On Thursday, Iain Duncan Smith admitted what everybody else has known for months but which he was still denying in the House of Commons last month. Universal Credit is massively late.

In just the latest shambolic development with this project, a brief ministerial statement was tabled on Thursday morning, the day of the Autumn Statement. It said that "the majority" of benefit claimants would be switched to Universal Credit by 2017 - until now, Mr Duncan Smith has insisted that they all would. It said that new claims to existing benefits would end by the end of 2016 - only last year, it was still being claimed that would happen by April 2014. And it said that "Universal Credit service will be fully available in each part of Great Britain during 2016."

This raises a large number of questions. Has Universal Credit in effect been delayed until after the election? How many people will remain outside Universal Credit by 2017 and who will they be? Which elements of Universal Credit will be unavailable until 2016 - i.e. after the next election? When will the key outstanding policy decisions for Universal Credit - now over two years late - finally be taken? And what will the final cost of this project be?

One of the problems has been conflicting views about how to sort out the IT. The Cabinet Office argued that they should start again from scratch, while DWP wanted to continue the pathfinder IT system, on which it has spent over £300million. It does not augur well for the future that, according to a departmental press release on Thursday morning, this dispute has not been resolved. It says that two systems will be developed: "Pressing ahead with the existing system while the enhanced IT is being developed will allow for greater understanding of ... Universal Credit".

The government's own Office for Budget Responsibility (OBR) has stated that there will still be 700,000 claimants on existing benefits at the end of 2017. One report suggests that housing support will remain outside Universal Credit until after the General Election. And given that previous ministerial assurances have proved false, even the new deadlines must be regarded as uncertain. As the OBR has said today: "given the delays to date, and the scale of migration required in 2016 and 2017, there is clearly a risk that the eventual profile differs significantly from this new assumption."

Labour has consistently supported the principle of Universal Credit. We have set up a 'Universal Credit Rescue Committee' comprising experts to advise us, in the event of Labour being elected at the 2015 General Election, what steps will be needed to salvage the project. The Committee had its first meeting last month, and will meet again before Christmas.

Universal Credit is the government's flagship welfare reform. It has become a fiasco. Ministers failed at the outset to grasp the scale of it. Now the prime minister has failed to get a grip, or even to resolve the dispute between his Ministers. Rescuing the project is going to be tough. Today's development gives no hint that the current administration is up to the task.

 

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