‘Very little progress’ on Governments’s Universal Credit scheme

By The Press Association25th February 2015News EnglandNews England, Unemployment, Welfare Reform

The Government’s flagship Universal Credit has come under fresh attack after MPs said “very little progress” had been achieved even though £700 million has been spent on the scheme since it began five years ago.

The Public Accounts Committee said that by October last year fewer than 18,000 people were claiming the credit, which replaces six means-tested benefits, out of around seven million expected in the long term – just 0.3% of the eligible population.

The committee made a series of recommendations, including urging the Department for Work and Pensions (DWP) to set out clearly what it has gained from its spending so far.

The MPs noted that the DWP had justified spending such large amounts of money on the promise of future benefits such as higher employment, but they said they could not judge the value for money at this stage.

Labour MP Margaret Hodge, who chairs the committee, said little progress had been achieved on the front line, with fewer than 18,000 people claiming UC by last October.

“We hope the Department’s expectation that this number will rise significantly by February 2016 proves to be accurate.

“As the Department has justified this spending on the promise of benefits in the future – such as from higher employment – rather than on the actual delivery of benefits to date, we simply cannot judge the value for money of this expenditure at this stage.

“The IT infrastructure for Universal Credit continues to be of particular concern. The Department has spent £344 million with suppliers developing its ‘live’ service systems for claimants who have straightforward initial claims which do not involve all six benefits, yet it expects to re-use just £34 million worth of this IT in the longer term.

“The live systems are technically limited and expensive to operate because they require manual intervention. The Department is developing and testing a new digital service, which it intends will deliver Universal Credit to all types of claimant in the long term.

“In the meantime it has adopted a ‘twin-track approach’ – running the two separate systems in parallel. This is complicated and expensive. The Department believes this will bring forward the anticipated benefits of the programme but it must ensure it does not allow the mixed, two-track approach to continue for longer than is required.”

Ms Hodge said the DWP had “re-set” the programme two years ago to put it on a sounder footing, but added it had already fallen a further six months behind schedule for developing the digital service.

A DWP spokesman said: “Universal Credit is on track and we are making good progress – almost 64,000 people have made a claim and this time next year UC will be in every jobcentre in the country.

“Latest evidence shows it’s already transforming lives with UC claimants moving into work faster and earning more.

“Using existing IT ensures value for money and will save the taxpayer over £2bn.”

Unison general secretary Dave Prentis said: “So far Universal Credit has cost the taxpayer a good deal of money, without a great deal to show for it all.

“Encouraging more people to apply for help online will no doubt help save money in future, but while digital applications might suit many people, official figures show that four million people are either unable to use technology or who feel uncomfortable doing so.

“The Department for Work and Pensions has left 20,000 housing benefit staff working in local authorities facing an uncertain future as they see their work disappearing.”

Rachel Reeves, Shadow Work and Pensions Secretary, said: “It is astonishing that David Cameron’s government has spent £700 million on Universal Credit yet fewer than 30,000 people are claiming it.

“The huge waste and delays to this failing programme means so far it has cost a staggering £26,000 for each person on Universal Credit.

“Labour wants Universal Credit to work and we’ll call in the National Audit Office to do an immediate review of this failing programme to get a grip of the spiralling waste and delays.”