Universal Credit has not delivered value for money and it is uncertain if it ever will, according to a damning report by the National Audit Office.
The report says UC has taken significantly longer to roll-out than intended, may cost more than the benefits system it replaces and the Government will never be able to measure whether it has achieved its stated goal of increasing employment.
It says the Department for Work and Pensions has admitted it cannot measure whether Universal Credit will lead to its economic aim of getting an additional 200,000 people into work. The report adds that Universal Credit may also cost more to administer than the previous system of benefits it replaces, with current running costs at £699 per claim, against an ambition of £173 per claim by 2024-25.
The roll-out was due to complete in October 2017, but after a number of problems, only around 10% of the final expected caseload are currently claiming Universal Credit. While the Government does not accept that Universal Credit has caused hardship among claimants, the NAO says it has seen evidence from local and national bodies that many people have suffered difficulties and hardship during the roll out of the full service.
The NAO says the Government 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.
It cites figures showing that in 2017, around one quarter (113,000) of new claims were not paid in full on time. Late payments were delayed on average by four weeks, but from January to October 2017, 40% of those affected by late payments waited in total around 11 weeks or more, and 20% waited almost five months. Despite improvements in payment timeliness, it says that in March 2018 21% of new claimants did not receive their full entitlement on time with 13% receiving no payment on time.
The DWP says it does not anticipate payment timeliness to improve significantly in 2018. On this basis, the NAO estimates 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 and that those with more complex cases are more likely to be paid late. It adds that the DWP believes it will never achieve 100% payment timeliness because it needs by law to verify the claimants’ eligibility.
The NAO says: “The Department expected most claimants would have enough money to cope over the initial waiting period after their claim is submitted (previously six weeks, now five). In reality, nearly 60% of new claimants (around 56,000 a month) receive a Universal Credit advance to help them manage before receiving their first payment.”
Increases in rent arrears since the introduction of Universal Credit in an area, which claimants can often take up to a year to repay, have been reported by local authorities, housing associations and landlords. Some private landlords told the NAO they have become reluctant to rent to Universal Credit claimants. It reports increases in the use of foodbanks after Universal Credit full service was rolled out to the area.
Local authorities have reported additional costs due to administering Universal Credit. The Government says these can be claimed back, but data is not being recorded so the NAO says it is hard to gauge the full cost.
The NAO states: “The Department must ensure that the programme does not expand before business-as-usual operations can deal with higher claimant volumes, and must learn from the experiences of claimants and third parties, as well as the insights it has gained from the roll-out so far.”
