Universal Credit 'not value for money', says spending watchdog
The Government’s flagship benefit scheme has not delivered value for money, its roll out has been slower than intended and has caused hardship for many people, according to a damning official report.
The National Audit Office (NAO) said Universal Credit (UC) cost more to administer than the previous system of six benefits it replaced, including job seeker’s allowance, tax credit and housing benefit.
The spending watchdog said it was uncertain if UC would ever deliver value for money.
Critics said the report “blows up” the Department for Work and Pension’s (DWP) assertion that everything was going well.
Labour MP Frank Field, who chairs the Work and Pensions Select Committee, described UC as a “shambles, leaving a trail of destruction in its wake”.
The NAO said the system’s running costs were £699 per claim against an ambition of £173 by 2024.
The national rollout was due to complete in October last year, but only around 10% of the final expected caseload are currently claiming the benefit.
DWP research says satisfaction among claimants is comparable to those claiming benefits under the previous system, but an official survey showed that two out of five were experiencing financial difficulties, the NAO said.
“The Department does not accept that Universal Credit has caused hardship among claimants but the NAO has seen evidence from local and national bodies that many people have suffered difficulties and hardship during the rollout of the full service,” the report said.
“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.”
Around one in four new claims – 113,000 – were not paid in full on time last year, with late payments delayed by an average of four weeks, although some waited five months, the NAO reported.
The DWP does not anticipate that delays will improve this year and believes it will never achieve 100% payment on time because of the need to verify claimants’ eligibility, the NAO said.
It recommended the programme did not expand before “business as usual operations” could deal with higher numbers of claims.
Since the introduction of UC there have been increases in rent arrears and the use of food banks, the NAO reported.
Amyas Morse, head of the NAO, 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 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 June 8.
“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.”
The report noted that £1.9 billion had been spent on UC, including £0.6 billion on running costs, while the DWP’s expectation of an annual benefit of £8 billion “remains unproven”.
A DWP spokesman said: “Previous administrations poured billions into an outdated system with a complex myriad of benefits, which locked some people into cycles of welfare dependency, 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.
“Universal Credit is good value for money and is forecast to realise a return on investment of £34 billion over 10 years against a cost of £2 billion, with 200,000 more people in work.
“Furthermore, 83% of claimants are satisfied with the service and the majority agree that it ‘financially motivates’ them to work.
“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.”