Universal Credit's Multiple Failings Exposed In Financial Watchdog's Damning Report

Costs spiral, delays mount - as the roll-out continues.

The crisis-hit Universal Credit benefits scheme could end up costing more than the system it replaces, with ministers unable to tell if the reform will ever be a success, a damning report finds today.

The independent National Audit Office (NAO) found that Universal Credit has so far failed to deliver value for money and may never do so – as officials press on with its roll-out regardless.

Despite repeated government claims that the reform will put 200,000 more people into work, the NAO said the Department for Work and Pensions (DWP), led by Esther McVey, has been forced to admit it won’t ever be able to determine whether this pledge has been achieved.

The system, which replaces the six main benefits with one single payment, was intended to cut bureaucracy and save taxpayers’ money, but the NAO found running costs 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.

The Department for Work and Pensions has admitted it can't measure whether Universal Credit will increase employment.
The Department for Work and Pensions has admitted it can't measure whether Universal Credit will increase employment.
PA Wire/PA Images

The system has been beset by problems, amid claims it leads to an increase in poverty and hardship, but the NAO said the government had little choice but to press ahead with it.

“The [DWP] has pushed ahead with Universal Credit in the face of a number of problems, but has shown a lack of regard in failing to understand the hardship faced by some claimants,” said chief auditor Amyas Morse.

“The benefits that it set out to achieve through Universal Credit, such as increased employment and lower administration costs, are unlikely to be achieved, yet the department has little realistic alternative but to continue with the programme and hopefully learn from past mistakes.”

MPs responded with anger to the report’s findings, including Frank Field, chair of the work and pensions select committee.

The Labour politician, who has heavily criticised the new system, said: “This report blows up the DWP’s constant assertion that everything is going well and that any criticism comes from those who wish to make trouble for Universal Credit.”

Field added that claimants “are being screwed down into destitution while the DWP insists that all is okay”.

Frank Field has criticised the Universal Credit system.
Frank Field has criticised the Universal Credit system.
PA Archive/PA Images

The Lib Dems’ Stephen Lloyd said the report was a “devastating indictment” of Universal Credit, while one leading charity said it summed up the experience of many claimants it had helped.

Gillian Guy, chief executive of Citizens Advice, said: “The government must take action to fix these unacceptable problems with Universal Credit, ensuring people are paid on time and that adequate support is in place. This is especially important as the pace of the rollout increases.”

A DWP spokesperson insisted the system was “good value for money” and would realise a return investment of £34bn over 10 years.

“Previous administrations poured billions into an outdated system with a complex myriad of benefits, which locked some people into cycles of welfare dependency,” they added.

“Whereas we are building a benefit system fit for the 21st century, providing flexible, person-centred support, with evidence showing Universal Credit claimants getting into work faster and staying in work longer.”

The department said 83% of claimants are satisfied with the service and the majority agree that it “financially motivates” them to work.

The spokesperson added: “As the NAO acknowledges, we have made significant improvements to Universal Credit as part of our ‘listen and learn’ approach to its rollout, and it’s on track to be in all jobcentres nationally by the end of 2018.”

On Thursday, a High Court judge said that two severely disabled men who were transferred onto Universal Credit suffered unlawful discrimination when their income suddenly dropped.


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