Universal Credit not value for money, reports National Audit Office

A job centre - Image credit: PA Images

Universal Credit has not delivered value for money and may end up being more expensive to run than the system it is replacing, the UK Government’s spending watchdog has reported.

It also threw doubt on claims that it would boost employment and criticised the Department of Work and Pensions (DWP) for failing to respond to “the hardship faced by claimants”.

In a critical assessment, the National Audit Office (NAO) said it was “uncertain” that the beleaguered system would ever prove cost-effective, while taking aim at the fact it had taken “significantly longer to roll-out than intended”.

However despite the criticisms, the report, which is the NAO’s first on Universal Credit since 2014, said there was “no practical choice” but to continue pursuing the policy, given it would be “so complex and costly to return” to the legacy system.

The NAO's figures suggest Universal Credit may cost more to administer than its predecessor – despite ministers’ intention for it to cost £99m less per year.

The body shows current running costs at £699 per claim, against an ambition of £173 per claim by 2024-25.

The report also criticises the fact that only 10 per cent of the final expected caseload are currently claiming Universal Credit, despite the programme having been expected to be fully up and running by October last year.

Elsewhere the NAO criticised administrators for not showing “sufficient sensitivity” towards some claimants, despite figures from this year showing around one in five of new claims were not paid in full on time, while more than one in ten received no payment on time.

It expects that even amid attempts to improve the system, between 270,000 and 338,000 new claimants will not be paid in full at the end of their first assessment period throughout 2018.

The authors also blasted the DWP’s expectation that most claimants would have enough money to cope over the initial waiting period, when “in reality, nearly 60% of new claimants receive a Universal Credit advance to help them manage before receiving their first payment”.

Furthermore the NAO pointed to its own studies which suggested an increase in rent arrears, reluctance on the part of landlords to accept claimants as tenants and an increase in foodbanks in areas where Universal Credit had been rolled out.

Head of the National Audit Office Amyas Morse said the UK Government should give the same commitment to listen to those affected by the system's failings as it had to trying to improve it.

He said: "The department has kept pushing the Universal Credit rollout forward through a series of problems.

"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 the 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."

Commenting on the report, Citizens Advice Scotland head of policy Susan McPhee said the service was “well aware of the difficulties people were facing due to the roll out of Universal Credit".

She said: “The National Audit Office report highlights many of the problems having a negative impact on individuals.

“We want the UK Government to halt the roll out of Universal Credit until the policy and delivery issues have been fixed to prevent further unnecessary hardship."

The SNP’s social justice spokesperson, Neil Gray MP, said the UK Government must not ignore the findings and called the findings an “indictment” of the policy.

by John Ashmore

Employment

Full rollout of Universal Credit delayed until 2022

He said: “This report shows just how much of a mess the Universal Credit roll out is. The SNP has been warning about the issues with the payments system for six years – but the DWP are tin-eared – leaving people in desperate situations.

“For the National Audit Office to conclude that Universal Credit has not delivered value for money – that it is uncertain that it ever will –  and that it may end up costing more than the system it replaces, is a total indictment of the Tories callous and damaging policy.

“The DWP has pushed ahead with their shambolic roll-out despite all the warnings, and the total disregard shown for the hardship faced by claimants is nothing short of immoral and shameful.

“The UK Government continues to be bogged down in its own Brexit mess, and what this report shows is that the DWP flagship welfare reform is completely rudderless.”