Universal Credit Costs More Than System it Replaces

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Universal Credit Costs More Than System it Replaces

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By Lauren Howells

Universal Credit “may cost more than the benefits system it replaces”, the National Audit Office (NAO) has announced. 

Universal Credit “has not delivered value for money 

Introduced to simplify the benefits system, Universal Credit merges six benefits (income support, income-based jobseeker’s allowance (JSA), income-related employment and support allowance (ESA), housing benefit, working tax credit and child tax credit) into one payment.

The NAO said that there had been a £1.9 billion spend to date on Universal Credit. In its recent report, the NAO concluded that Universal Credit had not delivered value for money so far and said that it was uncertain that it ever would.

Running costs currently, sit at £699 per claim. The government intends for this figure to be £173 per claim by 2024-25.

Universal Credit roll-out considerably slower than intended 

Universal Credit Costs More Than System it Replaces

Originally due to complete in October 2017, the NAO said that the roll-out of Universal Credit had taken “significantly longer” than intended, with only 10% of the final expected number of people currently on the system, eight years after work started.

The NAO went on to say that since it had last reported on Universal Credit in 2014, the DWP had made “some progress” in managing the programme but the Department would never be able to measure whether or not it had achieved its goal of increasing employment by putting an additional 200,000 people into work.

Four in ten claimants experiencing financial difficulties

A recent survey by the DWP found that 4 in 10 of those surveyed who were claiming Universal Credit, said that they were experiencing financial difficulties.

The NAO accused the DWP of not showing “sufficient sensitivity” towards some claimants and said that it had seen evidence that “many people” had suffered “difficulties and hardship” during the roll-out of Universal Credit. The report stated that the DWP does not accept that Universal Credit has caused hardship among those claiming it.

According to the NAO, around a quarter (113,000) of new claims for Universal Credit were not paid in full on time in 2017, with late payments delayed by an average of 4 weeks. Forty per cent of those who weren’t paid on time between January and October 2017, had to wait for around 11 weeks or more, with a fifth (20%) having to wait nearly 5 months.

In March 2018, the NAO said that 21% of new claimants did not receive everything they were due on time and 13% received none of their payment on time.

NAO does not anticipate a significant improvement

The NAO has estimated that, throughout 2018, between 270,000 and 338,000 new claimants will not be paid everything they should be at the end of their first assessment period. It pointed out that those with “more complex cases” were more likely to be paid late.

In addition, it said that in 3 out of the 4 areas it had visited where data was available, the use of food banks had “increased more rapidly” after the roll-out of full-service Universal Credit. 

The NAO stated that it would now be “so complex and costly to return to legacy benefits”, there was “no practical alternative but to continue with Universal Credit”.

Amyas Morse, head of the National Audit Office, said:

“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.”

By | 2018-06-19T09:53:32+00:00 June 19th, 2018|Personal Finance, Politics|0 Comments

About the Author:

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After completing her law degree, Lauren decided to follow her passion for writing. She regularly contributes articles to CLNews on personal finance and general consumer topics.

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