• Letter from Frank Field to Neil Couling on Universal Credit claimant survey, 13 June 2018 ( PDF 454 KB)
• Letter from Frank Field to Neil Couling on Universal Credit claimant survey and Universal Support, 13 June 2018 ( PDF 297 KB)
• Letter from Frank Field to Neil Couling on Universal Credit employment impact and Business Case, 13 June 2018 ( PDF 388 KB)
• Inquiry: Universal Credit
• Work and Pensions Committee

The report catalogues a series of extraordinary failures of design and implementation, and portrays a Department ‘stuck’ making slow, fraught progress on a policy that it cannot now go back on – with neither direction offering value for taxpayer money.

Commenting on the NAO’s report, Rt Hon Frank Field MP, Chair of the Work and Pensions Select Committee, said:

“This report blows up the DWP’s constant assertion that everything is going well and that any criticism comes from those who wish to make trouble for Universal Credit. The points that individuals have raised with the Select Committee are now writ large as systemic faults within the system, and the Government is caught in a trap of its own making. Because ministers were taught to be in denial earlier the programme, it has advanced to a stage where there is now a mega cost to scrap it and a mega cost to taxpayers to continue with it. Either way, too many claimants are being screwed down into destitution while the DWP insists that all is okay. The Universal Credit we have seen is a shambles, leaving a trail of destruction in its wake. Sadly this report will make little difference if the senior officers running Universal Credit remain firmly entrenched in La La Land.”

Progress:

• The Department is stuck: it is making much slower progress than expected. As such, “Universal Credit is still at a relatively early stage of progress”. It cannot halt the programme, however. Its “incremental approach has led the Department to make many changes to its jobcentres, its digital systems and the working practices of the 12,000 people working on Universal Credit. As it has rolled out Universal Credit to more claimants and areas, these changes have become increasingly embedded across the Department. It would be both complex and expensive to revert to legacy benefits at this stage”. Consequently, the Department “does not have a realistic alternative but to continue”.
• The business case approved at the end of May 2018 “should have been the final check” on the decision to invest in UC: but it was produced “at a time when the Government was already committed” to rolling out the programme. It is therefore questionable whether it constitute a “check” at all, given the existing commitment to the programme.

Effect on claimants:

• The NAO “cannot quantify” how many UC claimants are experiencing difficulties with UC or hardship as a result. The organisations the NAO spoke to “referred to sufficient numbers of individual cases to indicate that at least a significant minority have been adversely affected”.
• The Department has not measured the impact on claimants or assessed how much hardship they suffer. It told the NAO that “the policy intent is to help people get used to monthly budgeting, and it does not accept claimants have suffered hardship as a result of UC”.

Payment delays:

• “Claimants who do not receive full payment on time have faced average delays of four weeks in addition to the five to six week waiting period. From January to October 2017, of those new claims to full service that were not paid in full and on time, 40% (20,000 households, which equates to one in ten of new full service claims) waited in total around 11 weeks or more for full payment; and 20% (10,000 households) waited almost five months or more.
• Even once the first payment has been processed correctly, claimants can also face delays in subsequent assessment periods
• “The majority of claimants do not have the money to manage [waiting for payment]. Take up of new claim advances is now 60%. Most claimants manage over this period by taking on additional debt”

There is also evidence that the “fix” the Government introduced to ameliorate the hardship caused by the design of the policy and processing delays —allowing claimants to receive up to 100% of their award in advance of the first payment—is causing problems of its own. The NAO report states:  “The changes to the rules regarding advances creates some challenges for the Department. Some people request an advance at a very early stage in the claim process. However, having received the advance, they do not continue with their claim and the claim is closed. This can make it harder for the Department to ensure the advance is repaid. The Department’s research found some individuals have made multiple claims, including one individual who has received 18 advances without following through to a fully completed Universal Credit claim.”

“Industrialisation”:

To make its promised efficiency gains, UC needs to become a far more automated system, and the delays to the rollout and automation of the digital service further reduce projected efficiency savings. The Independent Project Assessments received and analysed by the Committee unfortunately called for the “industrialisation” of UC for complex cases and vulnerable customers.  In those stark terms, however, it epitomises the challenges facing the UC programme. The Department last week released research showing that just 54% of claimants are able to apply for UC online without help.

The NAO report reveals further problems with the online systems. Verify—the Government’s online identity verification process—is vital to the Department achieving its efficiency objectives on UC. DWP was aiming for 90% of claimants to use the system, and is now aiming for 80%. But only 38% of claimants who try to use Verify manage to do so successfully, and 30% of claimants don’t try.

The Committee began its inquiries into Universal Credit in the last Parliament, and has maintained pressure on the Government to account for the impact and effects of the massive welfare reform, consistently questioning the policy’s design and DWP’s assertions about it. The three latest letters questioning program director Neil Couling further on the policy and DWP’s analysis and claims are attached. The table below summarises the current position, setting some of DWP’s claims about UC against the NAO analysis:

Further information

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