04/07/2018 11:32 BST | Updated 04/07/2018 15:39 BST

Esther McVey Savaged Over 'Incorrect' Claims About Damning Report Into Universal Credit

The MP has received a public dressing down from the National Audit Office.

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Welfare Secretary Esther McVey has received a public dressing down for making a series of untrue claims about a damning report into Universal Credit.

A report from the National Audit Office (NAO) published earlier this month painted a dire picture of the Government’s flagship welfare policy, saying it has not delivered value for money and it is impossible to know if it will help get people off benefits and into work.

But appearing before MPs to discuss the report after its publication, McVey claimed the report called for the roll-out of Universal Credit to be sped up, that it was indeed working, and the inquiry was not based on up-to-date information.

NAO chief Sir Amyas Morse took the unusual step of writing an open letter to McVey to set the record straight, saying her statements were not correct and her behaviour was “odd”.

He said that the final report, published on June 15, had been agreed with “senior officials” in DWP just days before it was released.

He wrote: “It is odd that by Friday June 15 you felt able to say that the NAO ‘did not take into account the impact of our recent changes’.

“You reiterated these statements on 2 July but we have seen no evidence of such impacts nor fresh information.”

Sir Amyas added: “I’m afraid your statement on 2 July that the NAO was concerned Universal Credit is currently ‘rolling out too slowly’ and needs to ‘continue at a faster rate’ is also not correct.

“While we recognise regrettable early delays to Universal Credit, my recommendation…is that the Department must now ensure it is ready before it starts to transfer people over from previous benefits.”

Whilst the report did acknowledge “some progress” had been made in managing Universal Credit, it was damning in its criticisms of the system.

Key quotes from the NAO report on Universal Credit

  • “Universal Credit has taken significantly longer to roll-out than intended, may cost more than the benefits system it replaces, and the Department for Work and Pensions (the Department) will never be able to measure whether it has achieved its stated goal of increasing employment. In today’s report, the National Audit Office (NAO) concludes that Universal Credit has not delivered value for money and it is uncertain that it ever will.”
  • “The NAO states the Department 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.”
  • “The roll-out has been considerably slower than was initially intended. It was due to complete in October 2017, but after a number of problems, eight years later only around 10% of the final expected caseload are currently claiming Universal Credit.”

Universal Credit rolls six separate benefits into one, and was the brainchild of former DWP Secretary Iain Duncan Smith – who described the NAO report as a “shoddy piece of work”.

The NAO found running costs for Universal Credit are currently 300% above estimates.

It costs around £699 to administer a single Universal Credit claim, against an ambition of £173 by 2024.

A total of £1.9bn has been spent on Universal Credit so far, with a suggested £8bn of savings remaining unproven, the NAO added.

Meanwhile thousands of claimants are forced to cope with delayed payments, with around 113,000 new claims not paid in full on time last year.

Late payments were delayed by an average of four weeks, but delays were as long as 11 weeks in the first ten months of 2017.

Some 20% of claimants waited almost five months for money, the NAO found, with the scheme’s overall roll-out moving much more slowly than first planned.

Figures show that Universal Credit had around 815,000 claimants in March 2018 – against a forecast of 8.5 million by 2024.

McVey appeared in the Commons a few hours after the letter was published and apologised to MPs for “inadvertently misleading” Parliament. 

“What I meant to say was the NAO said there was no practical alternative to continuing with Universal Credit,” she said.

McVey doubled down on her claim the NAO had failed to take into account recent changes to how Universal Credit is implemented.