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Universal Credit May Not Deliver ‘Value For Money’, Says NAO

Iain Duncan Smith’s flagship Universal Credit programme may not deliver ‘value for money’, the Government spending watchdog has warned today (26 November).

The net value of Universal Credit is now estimated to be £14.5 billion – £1.7 billion lower than three years ago. The figure supposedly accounts for reduced welfare spending and other ‘societal benefits’.

However, the National Audit Office (NAO) said it’s too early to determine whether Universal Credit will deliver ‘value for money’ for taxpayers, “regardless of how it is implemented and the cost of doing so”.

Delays in the implementation of Universal Credit, changes to its delivery service and problems with IT mean additional costs for taxpayers, including £2.8 billion more in staffing costs (NAO estimate) and £130 million wasted on failed IT software.

The DWP is planning to start rolling out new IT software for Universal Credit in just 18 months. However, the NAO said the DWP “does not yet have a contingency plan” if the IT software (delivery service) experiences “delays or fails”. This in turn could result in yet more losses.

According to the NAO, if the new delivery service is delayed by just 6 months the value of Universal Credit “reduces by £2.3 billion due to lost societal benefits”.

Their report also criticised the government for failing to “stabilize senior leadership roles and responsibilities”. Universal Credit has seen seven chiefs in only two years, with the former DWP Work Service Director Neil Couling replacing Howard Shiplee less than two months ago.

Chair of the Public Accounts Committee Margaret Hodge MP (Labour) accused the DWP of “throwing good money after bad”, in botched attempts to fix Universal Credit.

Margaret Hodge said: “The Department is throwing good money after bad by introducing a short-term fix with no adequate plan for delivery, insufficient skills and unclear milestones to measure progress against.”

Shadow Work and Pensions Secretary Rachel Reeves added: “The National Audit Office has cast grave doubts over the future of Universal Credit. This shocking report says the benefits of Universal Credit have fallen by £1.7 billion and that value for money, ‘can’t be determined’. It also confirms the roll-out of the new benefit won’t be complete even by 2019 as Iain Duncan Smith has repeatedly promised.

“The National Audit Office report is further evidence that the government’s handling of Universal Credit has been disastrous. It’s neither on time or on budget as the government promised. It’s yet another example of Tory Welfare Waste. Ministers must urgently get a grip of the huge waste and delays to this failing programme.”

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

“The Department for Work & Pensions has reset Universal Credit on a sounder basis but at significant cost, by extending the time for implementation and choosing a more expensive approach.

“It is now vital that the Department quickly establish clear goals for delivering the programme, in terms of cost, time and functionality, against which it can be held to account.”

Work and Pensions Secretary Iain Duncan Smith defended the botched roll-out, arguing it was “best” to properly test Universal Credit before expanding the programme to more jobcentres.

He added that poor families on Universal Credit would “get more money”. They “go into work quicker, they stay in work long and families will benefit enormously”.

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Labour To Expose “Tory Welfare Waste”

Rachel Reeves MP, Labour’s Shadow Work and Pensions Secretary, will use a speech in Redbridge on Wednesday to highlight Tory welfare waste.

Labour say they will publish independent research showing David Cameron’s Government has spent £5 billion more than it planned on tax credits over the course of this Parliament, and that spending on in-work benefits is set to continue rising in real terms.

Rachel Reeves is expected to say: “Today we are publishing new independent research which shows that David Cameron’s Government has spent £5 billion more than it planned on tax credits over the course of this Parliament.

“This huge overspend is the result of the Tory Government’s failure to tackle rising levels of low pay and job insecurity. This failure means spending on in-work benefits, including housing benefit, is set to continue rising in real terms well into the next parliament.

“This is yet another example of Tory welfare waste: billions more of taxpayers’ money spent on in-work benefits, 900,000 people waiting for a combined 118,000 years in a huge backlog for sickness and disability benefit assessments. And the shambles of Universal Credit leading to huge delays and over £130 million of taxpayers’ money already wasted on failed IT.”

Photo credit: Regional Cabinet via photopin cc

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