Workforce, Pensions and Training

15.06.18

Government under pressure as NAO finds universal credit not delivering value for money

Universal Credit (UC) has not delivered value for money and-- it is uncertain that it ever will, according to research published by the National Audit Office (NAO) today.

The roll out of the new system has taken significantly longer than first planned, may cost more than the previous benefits system that it is replacing, and the department for work and pensions will not be able to measure whether it has achieved its goal of helping an additional 200,000 people into work.

Since the last NAO report in 2014, the department has made some progress in managing the programme, with current running costs stand at £699 per claim. But the Department for Work and Pensions (DWP) is aiming for £173 per claim by 2024-25.

The roll out of the programme was supposed to be completed in October 2017, but a number of problems have meant that eight years later only around 10% of the final expected caseload are currently claiming UC.

Although research by the department for work and pensions has claimed that satisfaction amongst claimants of UC and those claiming benefits under the previous system are comparable, a recent survey by the department found that four in 10 claimants were experiencing financial difficulties.

The NAO added that the department has brought hardship on claimants, suggesting there was “insufficient sensitivity” toward some claimants.

In 2017, around a quarter of new claims were not paid in full on time, and late payments were delayed by an average of four weeks.

But between January and October 2017, 40% of those affected by late payments waited a total of 11 weeks or more, with a fifth waiting almost five months.

Although the timeliness of payments has improved, in March of this year 21% of new claimants did not receive their full payments on time, and 13% received no payment whatsoever on time, and the department does not anticipate any significant improvement to the timeliness of payments this year.

The NAO predicts that between 270,000 and 338,000 new claimants will not be paid in full at the end of their first assessment period throughout 2018.

Worryingly, some private landlords told the NAO that they have become reluctant to accept UC claimants as tenants.

The NAO has recommended that the department for work and pensions should capture intelligence on claimants’ issues and opinions of delivery partners and external stakeholders.

Amyas Morse, head of the NAO, said: “The department has kept pushing the Universal Credit rollout forward through a series of problems.”

He added: “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 8 June.”

Responding to the report, Cllr Nick Forbes, senior vice chair of the LGA, said: “While councils support the principle of Universal Credit to incentivise work and increase income from employment, concerns remain about funding reductions for the programme.

He said that the ongoing challenges with the transition to UC are putting pressure on councils’ revenues and benefits services and wider support of low income households.

“The Government needs to restore funding to councils for local welfare assistance schemes so they can provide the local safety net to help those struggling to cope with welfare reforms, including the roll out of Universal Credit,” he added.

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