No way of determining value or efficacy of Universal Credit – but DWP has ‘no practical alternative’ but to press on, NAO concludes

Written by Richard Johnstone and Sam Trendall on 15 June 2018 in News

Auditors acknowledge some progress has been made in the last five years and department insists programme is providing value

Credit: PA Images

The Department for Work and Pensions is left with “no practical alternative” but to press on with the rollout of Universal Credit, although it may never be possible to properly determine if the benefits reform is effective or represents value for money.

That is the conclusion of a new report from the National Audit Office. The report noted that the DWP has “made some progress in managing the programme” since the NAO last examined the benefits-reform programme in 2014. But the rollout has continued to be beset by delays and ever-increasing costs.

When the NAO last reported on the Universal Credit five years ago, the programme had recently been “reset” and adopted a “twin-track approach”. This entailed the quick launch of a ‘live service’ built on existing systems, alongside the ongoing development of a ‘full service’ which represented the “long-term digital solution”.

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The report highlighted that, even since the department began rolling out the full UC service in May 2016, it has changed the schedule four times. 

In July 2016, it announced it would roll out the service more slowly, completing the full-service rollout across the country by September 2018, and full transition of all existing benefit recipients by March 2022. Then, following the November 2017 Budget, policy changes required a further three-month delay to December 2018 to completing full-service rollout. A further delay to rollout in Wales, due to delays completing its Welsh language service, was announced in March this year, while last week it announced the completion date would move to March 2023 – in order to adapt the system to accommodate further transitional changes announced by government.

"As the NAO acknowledges, we have made significant improvements to Universal Credit as part of our ‘listen and learn’ approach to its rollout, and it's on track to be in all jobcentres nationally by the end of 2018."
DWP spokesperson

Although the NAO said UC is “still at a relatively early stage of progress”, other changes the department has made would make halting implementation difficult.

"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," said the report. “As it has rolled out Universal Credit to more claimants and areas, these changes have become increasingly embedded across the department. It would be so complex and costly to return to legacy benefits at this stage, that the NAO believes there is no practical alternative but to continue with Universal Credit."

The report added that the DWP “will never be able to measure” whether Universal Credit has achieved its stated ambition of returning 200,000 people to work. The value for money of the programme will also remain intangible, auditors found.

“We cannot judge the value for money on the current state of programme management alone,” the report said. “Both we, and the Department, doubt it will ever be possible for the Department to measure whether the economic goal of increasing employment has been achieved.”

Response to criticism
Furthermore, the Department has sometimes not adequately engaged with criticisms of the programme, resulting in a failure to understand the hardships experienced by some claimants.

“The Department has responded to simple ideas to improve the digital system but defended itself from those that it viewed as being opposed to the policy in principle,” the report said. “It does not accept that Universal Credit has caused hardship among claimants, because it makes advances available, and believes that if claimants take up these opportunities hardship should not occur. This has led it to often dismiss evidence of claimants’ difficulties and hardship instead of working with these bodies to establish an evidence base for what is actually happening.”

Responding to the report, Work and Pensions Select Committee chair Frank Field said the report was “devastating” and revealed the department was "stuck making slow, fraught progress on a policy that it cannot now go back on".

"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,” he said. “Because ministers were taught to be in denial earlier in 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.”

He accused the senior officers running UC of being “firmly entrenched in La La Land” and he contrasted the claims made by DWP’s UC director general Neil Couling with the NAO’s evidence.

"Because ministers were taught to be in denial earlier in 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."
Frank Field, chair of Work and Pensions Committee

In the business case for Universal Credit, which was only approved last month despite the government already being committed to the reform, Couling wrote: "This business case clearly demonstrates that Universal Credit provides value for money and huge benefits for claimants, the broader population and the economy as a whole. […] Universal Credit supports people into work, will help them to progress whilst in work, and represents clear value for money for the whole economy.”

A DWP spokesman said: “Previous administrations poured billions into an outdated system with a complex myriad of benefits, which locked some people into cycles of welfare dependency. Whereas we are building a benefit system fit for the 21st century, providing flexible, person-centred support, with evidence showing Universal Credit claimants getting into work faster and staying in work longer.

“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.  Furthermore, 83% of claimants are satisfied with the service and the majority agree that it 'financially motivates' them to work.

“As the NAO acknowledges, we have made significant improvements to Universal Credit as part of our ‘listen and learn’ approach to its rollout, and it's on track to be in all jobcentres nationally by the end of 2018.”

About the author

Richard Johnstone is deputy and online editor of Civil Service World, where a version of this article first appeared. He tweets as @CSW_DepEd

Sam Trendall is editor of PublicTechnology

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