Universal credit ‘may never deliver value for money’

The Government has been accused of presiding over a catalogue of errors in the roll-out of the £1.9bn universal credit system, which the National Audit Office says is pushing claimants into financial hardship while failing to deliver value for money.

The independent auditors also revealed that the new benefits scheme could end up costing more than the system it replaces, and that ministers are unable to tell if the reform will ever be a success.

Universal credit “rolls six major working-age benefits into one monthly payment, including job seeker’s allowance, tax credits and housing benefit”, reports The Guardian. Its central aims are to “simplify the benefits system, making it more efficient and to provide incentives for claimants to enter work”.

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But the NAO says it has “significant doubts” that these aims can be achieved. The auditors said ministerial claims for universal credit are in some cases “theoretical” and based on “unproven assumptions”.

“Damning is an overused cliché for NAO reports, but boy that word applies here,” says HuffPost’s Paul Waugh.

“Despite repeated government claims that the reform will put 200,000 more people into work”, he adds, “the NAO said the Department for Work and Pensions (DWP) has been forced to admit it won’t ever be able to determine whether this pledge has been achieved”.

But the scheme is so massive and complex that “there is really no practical choice but to keep on,” the NAO’s Amyas Morse says.

While Morse said the NAO recognised that ministers were committed to the rollout, he said: “We don’t think the DWP has shown the same commitment to listening and responding to the hardship faced by claimants. We think the larger claims for universal credit, such as boosted employment, are unlikely to be demonstrable at any point in future. Nor for that matter will value for money.”

The DWP launched a vigorous defence of universal credit, insisting it was operating effectively. It said the NAO was incorrect to conclude the benefits of the programme could never be demonstrated.

“Universal credit is good value for money and is forecast to realise a return on investment of £34bn over 10 years against a cost of £2bn, with 200,000 more people in work,” a DWP spokesman said. “Furthermore 83% of claimants are satisfied with the service and the majority agree that it ‘financially motivates’ them to work.”

But Gillian Guy, chief executive of Citizens Advice, told The Independent the findings came as no surprise.

“Since universal credit was first introduced, we have helped tens of thousands of people who have struggled with the new system,” she said. “Many of those are finding it hard to make their claim, which can further hamper their chances of receiving their benefit on time.”