Universal Credit causes hardship and costs too much, report says

Friday, June 15, 2018

The Government's flagship benefit scheme has not delivered value for money, its roll out has been slower than intended and it 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.

UC is paid monthly (or twice monthly in Scotland) and the amount given depends whether the claimant is under or over 25, single, or a parent.

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.

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.

“The scheme that was meant to save £8 billion is not doing that. It’s costing about £700 per claim against a target of about £170, it’s only reached 10% of people, it’s way behind schedule and there’s all this evidence now that people are ending up in debt,” says Labour’s Steve McCabe, of the pensions committee on the Julia Hartley-Brewer show.

“The two things that are wrong is the amount of money you can earn before you start losing [benefits] has been cut and cut and cut so work doesn’t pay anymore.”

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.

“If you look at the way the system works, you still have a range of different organisations administering a whole range of benefits and that’s complicated for the claimant,” Deven Ghelani, founder of Policy in Practice, told Julia Hartley-Brewer.

“I moved into Policy in Practice to see how a good policy manifests itself in practice, and what we’re seeing is it’s quite messy.

“Where I agree with this report is there are still a significant minority of people on UC struggling with the system even with the changes that have been put in place.”

He said that changes could still be made to improve the way claims are handled: “Where I disagree is that you can still make changes from where it is now that will considerably improve on the way the current benefits system works.”

Ghelani said that more support was needed to address the reasons people might be struggling.

“It’s not always to do with their benefit claims, they sometimes have other underlying issues - with literacy, mental health, perhaps addiction or they’re already in debt.

“Moving to universal credit can be a particular challenge because of the way it’s paid - the underlying driver is the adequacy of support people on low incomes have had.”

The NAO recommended the programme did not expand before "business as usual operations" could deal with higher numbers of claims.