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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8 reader comments

  1. Al says:

    Paul, you ought to ask this: “When will every claimant at *any single* jobcentre be moved to UC?”

    The rollout of UC to date, such as it has been, has focused mostly on one single group- new claims from single unemployed people. These apparently have the simplest payments (being generally constant from week to week). Their UC claims have been worked out manually in the participating jobcentres. The lack of a functioning IT system is the reason the rollout is being done in this manner- to give the impression of progress to offer political cover to a dysfunctional system.

    The more complicated claims rely on a functioning real-time IT system drawing data from HMRC, something which apparently does not exist, despite recent statements by IDS and Lord Freud to the contrary (“The IT works”). It does not. UC cannot be fully rolled out without this real time interface, instead we get language from DWP about more jobcentres using UC, but these all process only new claims from the simplest claimants, by hand. it is obviously impossible to process every claim by hand, so UC is a dead duck without this IT system.

    Cynics might say the Government is making positive noises about the UC rollout in the hope of making it to the election without the true state of the UC disaster being known, so that political pointscoring could be made by a (perhaps inevitable?) decision of a new administration to cancel the entire ailing project.

    Computer Weekly had some articles on the state of UC a while ago. There is a great scoop to be had for a tenacious journalist here. The flagship welfare reform policy of a government being an unworkable disaster, whose true state is deliberately being masked from public view. An open goal.

  2. Jon Lisle-Summers says:

    Not only has this migration been an expensive failure, in the meantime, people have died through wrongly-applied benefit sanctions…

  3. Tim Morton says:

    Interesting article, I’ve followed this story for a long time. So your comment about 50% of claimants saying it’s working were the claimants in August 2013, this statistical release from September 2013 shows only 2150 claimants, and 70% under 25 – the vanilla cases – https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/262638/Universal_Credit_Statistical_First_Release.pdf

  4. Jack Sanders says:

    Universal credit will be paid monthly so when you add Osborne’s new 1 week waiting time for UC it’s up to 5 weeks before you’ll get your first payment from the initial claim.

    That’s 5 weeks and no food, so forget that featured DWP employees spin

    1. jgah says:

      It could actually be up 6 weeks: There is the seven day waiting period, then an “administrative period” of up to a week. When the claimant is paid, they will only get one month’s benefit, including housing costs. That means they will either have to find two weeks rent from their own resources (more often than not non existent) or go into arrears, which even with the lower rent levels charged by social landlords, will be a debt well in excess of £100.

  5. chris says:

    We already know its dead in the water! IDS knows it, but lets be honest if the truth came out of his mouth it would be a mistake

  6. Janmajay Deb says:

    It’s easy to bring changes, however success depends on how the changes are managed. It feels some time that the implementation of UC is driven by political gain, wish the term for the Government was more than 5 years so that more time could have been allocated to implement the changes.

  7. showmaster says:

    Errm? Popular with claimants? So far 14,000 out of 9,000,000 of the simplest claims only are being dealt with so if Universal Credit is universally popular with everyone, and their dogs, that makes a grand total of 0.15% satisfied and 99.85% who should have been on it by now dissatisfied.

    If they carry on with the reduced rate of transfer, 500 monthly, it will be 1,500 years before the system is fully operational. That is if they can deal with the complex cases as fast as the simple ones.

    Please do not show this article to a council anywhere trying to deal with the utter shambles of Housing Benefit which Universal Credit has failed to deal with.

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