22 Oct 2014

Why universal credit won’t be universal until 2018. At the earliest.

It’s the best of times and worst of times for welfare secretary Iain Duncan Smith.

The universal credit – an all in one replacement for welfare benefits – is proving popular with claimants in the places where it’s being trialled. That’s the good news.

The bad news is, at the current rate of roll out will take a long time to take effect.

That’s bad news for George Osborne too, as he’s relying on a £35bn saving from the move to the new benefit.

The original target was to get a million people onto universal credit by this year. In reality there are just 14,000.

Today the Department for Work and Pensions (DWP) released a new projection of the roll-out dates: 100,000 people will be getting the new benefit by May 2015, rising to 500,000 by May 2016.

With new claims for old benefits becoming impossible in 2016, that will need a much more rapid roll out process. Yet, said the project leader John-Paul Marks, “We want to make sure we move universal credit forward in controlled steps”.

Neither Mr Marks nor Mr Duncan Smith could give me a clear date as to when the 7.7m people estimated to be eligible for the benefit would all be getting it.

“There is a level of uncertainty and risk – it’s a massive transformation programme. It’s a significant, complex undertaking and we understand that” said Mr Marks.

Mr Duncan Smith said “You have to have flexibility so we land this carefully – simply gathering everybody up and dumping them in at an arbitrary point does not work. Targets and arbitrary figures are one of the problems of programme rollouts that don’t allow you to achieve the change. I believe the more people understand universal credit, the more they’ll want it.”

He hoped everyone would be on the benefit by 2018, though he admitted some difficult groups may not.

In a survey conducted in August 2013, during the pathfinder stage of universal credit, the DWP found two thirds of claimants say it helps them work more hours, that it’s a better financial incentive. Half of all claimants said it was easier to claim – but a quarter disagreed. But this data is more than 12 months old: the DWP admitted it “needed to be quicker” publishing the survey data.

Universal credit has been plagued with technical problems. The government has lost £130m on a computer system that didn’t work, according to a committee of MPs. Hence the decision to roll it out slowly, and by trial and error.

As it stands, the flagship welfare policy of the Conservatives will have taken two whole parliaments to take effect. And so will the fiscal benefits. The government estimates a total of £9bn will be saved by getting more people into work, and £35bn overall once the programme is up and running.

The case for universal credit rests on its ease of use – which seems to be proven, though on the basis of early trials on single claimants only – and on the savings made. These, it seems, will take a lot longer to appear than thought.

The government originally estimated a net reduction in public spending from universal credit of £38 billion over 12 years to 2022-23. With only the best part of seven million people yet to transfer, its hard to see this happening.

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