A future Labour government could scrap Universal Credit within months of taking office, sources close to the party have said.

Labour has already announced that it intends to pause the roll-out of Universal Credit and ask the National Audit Office (NAO) to review the cost effectiveness and implementation of the new benefit.

Sources close to the Labour Party are now saying they would consider abandoning Universal Credit it does not offer value for money.

Universal Credit, which merges a number of existing benefits into one monthly payment, has been beset with delays and software (IT) problems.

Figures released by the DWP earlier this week show that Iain Duncan Smith’s flagship welfare reform is nearly 987,000 behind its original intended target at this stage of its roll-out, with only 11,070 households in receipt of the benefit by the end of August 2014.

Around eight million households are expected to be in receipt of Universal Credit by the end of 2017. A figure which looks increasingly more unlikely as each month passes.

The DWP was also forced to write off a £40.1 million IT programme, with a further £91 million expected to be written-off over a five-year period. An action the Minister for Welfare Reform, Lord Freud, described as “deeply regrettable” and blamed Iain Duncan Smith for making the decision.

Lord Freud told fellow peers earlier this year: “We all know that, when you have a £2.5 billion programme with a high IT content, there are elements that you write that you do not need.

“In the private sector that can be a third of a programme. Clearly, any write-off is always deeply regrettable, but one has to put those things into a context.

“We remain within our budget of £2.5 billion — not £12 billion — and we are looking at an overall net benefit of £35 billion from this programme.

“The NAO (National Audit Office) has said that it is taking a regular interest in the programme; we will continue and will see more reports on it from the NAO.”

Rachel Reeves MP, Shadow Secretary of State for Work and Pensions, said that Labour supported the idea of simplifying the benefits system but “won’t waste taxpayers money on a failing programme with has suffered delay after delay.”

Party insiders have confirmed to the website Inside Housing that Labour could be prepared to scrap Universal Credit within four months of taking office, if it’s revealed by the NAO to be too costly to taxpayers.

A spokesperson for the DWP said that by the end of the year one in eight jobcentres will be offering Universal Credit.

He added: “The reality is that universal credit is already making work pay as we roll it out in a careful and controlled way”.


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