National Audit Office report on Universal Credit: Our Response

15 June 2018

Tony Wilson, Director of Policy and Research at Learning and Work Institute, comments on the recent National Audit Office report on Universal Credit:

“Universal Credit remains a good idea in theory, but today’s report lays bare just how wrong things have gone in practice. With nearly half of claimants experiencing financial problems and one quarter getting their benefits late, the saving grace is that Universal Credit is running so far behind schedule. Full roll out will now be at least six years late, and even this relies on the government getting new regulations through Parliament before summer – so expect more delays.

Perhaps most troubling in today’s report is the long list of things that the government isn’t measuring. It doesn’t recognise that there are ongoing local costs, so these were left out of the business case. It doesn’t accept that the reforms can cause hardship, so it won’t talk to partners about how to address it. And most remarkably, the government can no longer measure the impacts of Universal Credit on employment – so we will never know whether all of this upheaval has been worth it. Given that the government’s own research shows that one in four Universal Credit claimants who should be looking for work are not doing so, and our analysis suggests that the number of ‘claimant’ unemployed doubles after Universal Credit rollout, this needs to be urgently addressed.

Despite this, in the long run the government is still forecasting hugely positive impacts from Universal Credit, worth £34 billion over ten years. However these are based on heroic assumptions – like work coaches being able to support nearly four hundred people at a time, and running costs being one fifth what they were in the old system. In practice, the NAO show that current caseloads are four times smaller and unit costs four times larger than these targets – and that even small changes in the business case assumptions will increase costs by billions.

The NAO concludes that it’s now too late to turn back. However it’s also not too late to fix things. We want to see action in three areas. First, by reversing the Treasury’s £2.3bn raid on work allowances so that under Universal Credit it will pay to work; secondly, by resetting the relationship with local partners in order to support the most vulnerable, address hardship and manage the impacts on local services; and thirdly, by ensuring that Universal Credit transforms support to prepare for work, get into work and get more and better work.”