“National Audit Office – NAO concludes that Universal Credit has not delivered value for money and it is uncertain that it ever will.”
Friday 15th June 2018 ∼ Alex Tiffin
Universal Credit has taken significantly longer to roll-out than intended, may cost more than the benefits system it replaces, and the Department for Work and Pensions (DWP) will never be able to measure whether it has achieved its stated goal of increasing employment. In today’s report, the National Audit Office (NAO) concludes that Universal Credit has not delivered value for money and it is uncertain that it ever will.
I can now report on the shocking findings of the National Audit Office (NAO), on the roll-out and management of the government’s flagship welfare benefit, Universal Credit.
Before I go on, here are Some key facts the NAO found.
- £1.9bn spent to date on Universal Credit, comprising £1.3bn on investment and £0.6bn on running costs
- 113,000 late payments on new claims in 2017
- 60% of claimants using an advance due to waiting period
- £699 cost per claim with target of £173 by 2023
Since the NAO last reported on Universal Credit in 2014, they have concluded that the DWP has made some progress in managing the programme, but has itself admitted that it cannot measure whether Universal Credit will lead to its economic aim of getting an additional 200,000 people into work.
Not cost effective
Universal Credit may also cost more to administer than the previous legacy benefits, such as Job Seekers Allowance (JSA) or Employment and Support Allowance (ESA), that it replaces, with current running costs at £699 per claim, against an ambition of £173 per claim by 2024-25.
The roll-out has been considerably slower than was initially intended. It was due to complete in October 2017, but after a number of problems and set backs, eight years later only around 10% of the final expected caseload are currently claiming Universal Credit.
The DWP’s own research states that satisfaction among claimants of Universal Credit and those claiming benefits under the previous system is generally comparable to what it replaces. However, in a recent survey by the Department, four in ten of claimants who were surveyed stated that they were experiencing financial difficulties.
This ties in with research carried out by foodbank charity Trussell Trust, that found seven in ten new claimants to Universal Credit enter into debt as a result of claiming the benefit.
However the DWP 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 roll out of the full service.
The NAO states “the DWP 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.”
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, in March 2018 21% of new claimants did not receive their full entitlement on time with 13% receiving no payment on time.
No improvement expected.
Worse still, the DWP 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. Those with more complex cases are more likely to be paid late.
The DWP believes it will never achieve 100% payment timeliness because it needs by law to verify the claimants’ eligibility, which also applied under previous benefits.
The DWP 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.
Not just claimants are feeling the effects
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, this is a policy that private landlords UK wide are increasingly employing.
In three of the four areas the NAO visited and for which data was available, the use of foodbanks increased more rapidly after Universal Credit full service was rolled out to the area.
This agrees with the Trussell Trust’s report showing upsurges of 52% in foodbank use in the 12 months after Universal Credit rolls out to an area, compared to 13% in non-Universal Credit areas.
Trussell Trust Chief Executive said in a recent press release on their end of year figures
“As a nation, we expect no one should be left hungry or destitute – illness, disability, family breakdown or the loss of a job could happen to any of us, and we owe it to each other to make sure sufficient financial support is in place when we need it most.
It’s hard to break free from hunger if there isn’t enough money coming in to cover the rising cost of absolute essentials like food and housing. For too many people staying above water is a daily struggle. It’s completely unacceptable that anyone is forced to turn to a foodbank as a result.
Universal Credit is the future of our benefits system. It’s vital we get it right, and ensure levels of payment keep pace with the rising cost of essentials, particularly for groups of people we know are already more likely to need a foodbank – disabled people, people dealing with an illness, families with children and single parents.”
Local organisations such as Citizens Advice, which support claimants and assist in the administration of the benefit have reported incurring additional costs. The DWP says it has told local authorities it will pay them for additional costs associated with administering Universal Credit if they provide evidence of the expenses, but it places the burden of proof on the local authorities, uses its discretion on assessing claims and has not sought to systematically collect data on wider costs.
It will therefore have no means to assess the full monetary impact that Universal Credit is having.
The benefit roll-out has necessitated a number of changes which have become increasingly embedded across the DWP. It would be so complex and costly to return to legacy benefits at this stage that the NAO believes there is no practical alternative but to continue with Universal Credit.
It is this statement that many will find worrying. Despite the benefit haemorrhaging money, not being cost effective and showing a lack of sensitivity, there is no alternative?
The Department must now 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.
The NAO recommends that “the DWP should capture intelligence on claimants’ issues and the opinions of delivery partners and external stakeholders in a systematic way.”
“The Department has pushed ahead with Universal Credit in the face of a number of problems, but has shown a lack of regard in failing to understand the hardship faced by some claimants.
The benefits that it set out to achieve through Universal Credit, such as increased employment and lower administration costs, are unlikely to be achieved, yet the Department has little realistic alternative but to continue with the programme and hopefully learn from past mistakes”
Jobcentre staff facing massive caseloads.
The NAO also found that work coaches and case managers should expect a significant increase in their workloads and the roll-out continues.
Currently a work coach manages on average, 85 claimants but, this is expected to rise to 373 by 2023.
However case managers can expect the biggest increases, climbing from current levels of 154 claimants on average to a eye watering 919 by 2023. It begs the question is this going to impact claimants?
Just last week I reported on the head of the PwC union was complaining about a lack of training for frontline DWP staff. I wonder how unions will react to this news?
For those of you who’ve been following my story, you will know that this report would’ve came as no surprise to me.
The repeated denial by the DWP that Universal Credit is unfit for purpose is becoming increasingly difficult for them to justify, yet somehow they carry on doing it.
They have been shown to be insensitive and unfair. The rising costs are losing the tax payers’ money, and people are being pushed into poverty. How much longer will the Conservative government carry on down this path without at least trying to fix issues that have been repeatedly raised?
The evidence is now in black and white; Universal Credit is unfit for purpose and has created a hostile environment towards our most vulnerable in society.
To read more about me and my story please feel free to read my other articles documenting my life on Universal Credit.
Follow me on twitter @RespectIsVital
You can now find me on Facebook by searching: Universal Credit Sufferer
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