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Universal Credit saved from the ‘brink of disaster’, says charity

Iain Duncan Smith's flagship welfare reform has apparently been rescued from the "brink of disaster" and may even "eventually work", according to a new study.

Universal Credit has apparently been rescued from the “brink of disaster” and may even “eventually work”, according to a new study from the Institute for Government (IfG).

Iain Duncan Smith’s flagship ‘welfare reform’ has been beset by embarrassing delays, payment system glitches and expensive software write-offs – even a complete “reset” – with the full roll-out pushed back a further year and now forecast not to be completed until March 2022.

However it would seem that Iain Duncan Smith’s “ambitious” reform to Britain’s welfare system is on the road to recovery. But this doesn’t excuse the fact the troubled policy has been used as a cash cow for further cuts to social security spending, which will likely leave many families worse off.

The former Work and Pensions Secretary famously resigned over proposed changes to Personal Independence Payment, even though the hypocrite personally oversaw and implemented many other cuts to disabled people’s benefits prior to these proposed changes.

The Resolution Foundation estimated in May 2016 that 1.2 million families currently in receipt of tax credits will not be entitled to any support under Universal Credit, while a further 1.3 million will be £46 a week worse off. Around 2 million families will be £34 a week better off.

At the time, the left-leaning thinktank warned “progress made over the last 15 years under the tax credit system is at risk of being dismantled”, adding low-income working families will be “detrimentally affected” by Treasury cuts.

Others argued “work incentives” – one of the main principles of Universal Credit – would be reduced by lowering the amount a household can earn before Universal Credit payments start to be reduced.

And just three years ago in 2013 the National Audit Office (NAO) slammed the multi-billion pound programme, concluding “the Department for Work and Pensions has not achieved value for money in its early implementation of Universal Credit”.

In a press release on 5 September 2013, the NAO also warned “the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments.”

They added: “Such checks will not be feasible or adequate once the system is running nationally. Problems with the IT system have delayed national roll-out of the programme.”

But just three years later, IfG Senior Fellow Nicholas Timmins says Universal Credit is now in a much better state. In the report – Universal Credit: From disaster to recovery? – Mr Timmins says the single biggest cause of the initial failure was a wholly unrealistic timetable.

Using interviews with those involved in the early stages of development and NAO reports, Timmins explains what he believes went wrong with the new system and how it has since improved.

Despite this apparent recovery, Timmins is keen to keen to stress that many more things could still go wrong. “It is far too soon to tell whether Universal Credit will finally do the business”, he says.

“There are elements of the policy that are still not entirely clear and others that may well need changing. Huge challenges remain – not just taking on new claims but transferring the many millions on existing benefits and tax credits, including some of the most vulnerable on Employment and Support Allowance. Its generosity has repeatedly been cut.

“But the lessons from how it has been turned around from the brink of disaster to something that may eventually work could prove valuable for other government projects. And crucially, it now has a timetable that may finally prove realistic.”

Emma Norris, IfG Programme Director, added: “The story of Universal Credit has lessons not just for implementing welfare reform, but for delivering other major projects on government’s books today.


“It underlines the importance of thorough planning – Universal Credit was a huge change to the benefits system, but failed to sweat out the details or engage with users early enough. Understanding the people a policy is supposed to affect is a vital starting point for change.

“It also demonstrates the importance of having enough capacity to deliver – when Universal Credit began, DWP had twelve other major change programmes on its books and staff numbers were being reduced. And finally, it shows the importance of policy, operational and technical people working together from the very start. Policies can’t be created in a vacuum.”

The Institute for Government is an independent charity that works with all the main political parties to improve government effectiveness.

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