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| It’s official: universal credit is a colossal, costly, hellish catastrophe | It’s official: universal credit is a colossal, costly, hellish catastrophe |
| (about 1 hour later) | |
| The catastrophe of Iain Duncan Smith’s universal credit is laid out on the mortuary slab by the National Audit Office, the public spending watchdog. At phenomenal cost to the taxpayer, David Cameron and George Osborne backed this pointless upheaval that has inflicted untold suffering on claimants and yet achieves nothing measurable, says the national auditor’s autopsy report. It’s a breathtaking read. | |
| This should mark a tombstone moment for a government whose wanton maladministration has caused unforced errors in one public service after another: think of the needless turmoil in the NHS, immigration chaos, social care collapse and 62 free school fiascos. | |
| Today the Department for Work and Pensions is the offender: “The benefits that it set out to achieve through universal credit, such as increased employment and lower administration costs, are unlikely to be achieved.” The department is castigated for “a lack of regard in failing to understand the hardship faced by some claimants”. Forget normal Whitehall tact, here unfolds eight years of unrelenting failure, ploughing on despite alarms as costs rose to £2bn. | |
| Severe hardship is being caused because a quarter of claims are paid late, so people’s debts and rent arrears soar: districts where universal credit is rolled out see a 30% upsurge in foodbank use. Some 60% of claimants need an advance before payments come through, which becomes added debt, while council and social landlords are out of pocket for rent unpaid and private landlords refuse to let to those on universal credit: the system will never deliver all claims on time. | |
| Rollout should have finished last year – but after eight years of failures, each greeted with hubris and denial by Duncan Smith and his department, universal credit still covers just 10% of claimants. Warnings came over and over that many would not cope with hideously complex online claim forms: sure enough, the NAO says 43% have needed help – with no recompense for councils and charities struggling to provide it. | |
| You could say all this is unintentional, albeit the result of arrogantly ignoring experts who warned universal credit wouldn’t deliver more claimants into work. But add in the brutish sanctions, the deliberately cruel assessments of disabilities, with jobcentre staff bullied to knock people off benefits, and the DWP; this has been a hellish regime. The sanctioning system is slightly relaxed from the worst days when Duncan Smith boasted his system told claimants: “This is not an easy life any more, chum. I think you’re a slacker.” But still monstrous DWP injustices come up for appeals that are usually won. On top of that, the slashing of working benefit rates ensured universal credit makes people worse off. For every extra pound people earn, they lose 63p in working credits. | You could say all this is unintentional, albeit the result of arrogantly ignoring experts who warned universal credit wouldn’t deliver more claimants into work. But add in the brutish sanctions, the deliberately cruel assessments of disabilities, with jobcentre staff bullied to knock people off benefits, and the DWP; this has been a hellish regime. The sanctioning system is slightly relaxed from the worst days when Duncan Smith boasted his system told claimants: “This is not an easy life any more, chum. I think you’re a slacker.” But still monstrous DWP injustices come up for appeals that are usually won. On top of that, the slashing of working benefit rates ensured universal credit makes people worse off. For every extra pound people earn, they lose 63p in working credits. |
| Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits. | Universal credit is the supposed flagship reform of the benefits system, rolling together six benefits (including unemployment benefit, tax credits and housing benefit) into one, online-only system. The theoretical aim, for which there was general support across the political spectrum, was to simplify the benefits system and increase the incentives for people to work, rather than stay on benefits. |
| The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule. | The project was legislated for in 2011 under the auspices of its most vocal champion, Iain Duncan Smith. The plan was to roll it out by 2017. However, a series of management failures, expensive IT blunders and design faults have seen it fall at least five years behind schedule. |
| The original design set out a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. | The original design set out a minimum 42-day wait for a first payment to claimants when they moved to universal credit (in practice this is often up to 60 days). After sustained pressure, the government announced in the autumn 2017 budget that the wait would be reduced to 35 days from February 2018. This will partially mitigate the impact on many claimants of having no income for six weeks. The wait has led to rent arrears (and in some cases to eviction), hunger (food banks in universal credit areas report notable increases in referrals), use of expensive credit and mental distress. |
| Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks. | Ministers have expanded the availability of hardship loans (now repayable over a year) to help new claimants while they wait for payment. And housing benefit will now continue for an extra two weeks after the start of a universal credit claim. However, critics say the five-week waiting time is not enough and want it reduced to two or three weeks. |
| Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. | Plenty. Multibillion-pound cuts to work allowances imposed by the former chancellor George Osborne mean universal credit is far less generous than originally envisaged. According to the Resolution Foundation thinktank, about 2.5m low-income working households will be more than £1,000 a year worse off when they move on to universal credit, reducing work incentives. Landlords are worried that the level of rent arrears racked up by tenants on universal credit could lead to a rise in evictions. It's also not very user-friendly: claimants complain the system is complex, unreliable and difficult to manage, particularly if you have no internet access. |
| Amyas Morse, comptroller and auditor general, concludes helplessly that the department now has “little realistic alternative but to continue with the programme”. But with the administrative cost of every universal credit claim an eye-watering £699 per case against an ultimate target of just £173, others in the field call to stop this nightmare now and reconsider all options. For years ahead, however, who will dare attempt another radical shake-up? The most urgent need is to restore the £23bn Osborne cuts due to cause a record 37% of children in poverty by 2022, according to the Institute for Fiscal Studies. | |
| From day one, all those who understood the fiendish complexity of benefit systems warned Duncan Smith of the quicksands ahead. But with a blithe eureka, he claimed he had found the philosopher’s stone that would simplify everything, just like that. He sold it to his leader – David Cameron was never one for detail – as melding together six benefits in one easy form, all done online, so magic computers would change the amount paid each month with families’ changing lives. | |
| But there are reasons for complexity: the form was some 50 pages long by the time every human permutation of coupledom, children, disabilities, working hours, rent, council tax and plenty more was folded together. | But there are reasons for complexity: the form was some 50 pages long by the time every human permutation of coupledom, children, disabilities, working hours, rent, council tax and plenty more was folded together. |
| Paying benefits fairly is complicated because people’s lives are difficult: they change jobs, hours, incomes, numbers of children at home, partners, homes and illnesses. But Duncan Smith swaggered to his party that he had solved the great conundrums and perversities that fox every welfare system. How do you treat the sick and needy kindly, without perverse incentives? How do you top up low incomes without subsidising skinflint employers? As one great failure dogged another, as IT systems failed to fix all, such extravagant claims were made by this charlatan alchemist, that neither Cameron nor Osborne dared pull the plug and admit failure. So on it went. | |
| Sounding anything but optimistic, Morse ends by saying that the DWP will hopefully learn from past mistakes. But that’s not what happens in Whitehall. Duncan Smith jumped ship before this humiliation, pleading a sudden attack of tenderness for claimants subjected to cuts singularly lacking until icebergs loomed in front of his Titanic. Now he’s back on the backbenches as one of the good old boy “bastards” of John Major’s days. After this, those listening to him hammering on about a miracle economy and super-trade in post-hard Brexit Britain might question his judgment. | Sounding anything but optimistic, Morse ends by saying that the DWP will hopefully learn from past mistakes. But that’s not what happens in Whitehall. Duncan Smith jumped ship before this humiliation, pleading a sudden attack of tenderness for claimants subjected to cuts singularly lacking until icebergs loomed in front of his Titanic. Now he’s back on the backbenches as one of the good old boy “bastards” of John Major’s days. After this, those listening to him hammering on about a miracle economy and super-trade in post-hard Brexit Britain might question his judgment. |
| Also departed is Robert Devereux, the DWP permanent secretary who was well warned about likely calamity, yet he let Duncan Smith drive on. He never asked for a “letter of direction”, to show he had advised against this folly and so absolve himself of responsibility. Will other permanent secretaries learn from any of this? Unlikely. They always glide away from their mistakes. Devereux retired this January, as a Knight Commander of the Order of the Bath, a title all permanent secretaries expect, regardless of any disservice they did to the nation. | |
| • Polly Toynbee is a Guardian columnist | • Polly Toynbee is a Guardian columnist |
| Universal credit | Universal credit |
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| Iain Duncan Smith | Iain Duncan Smith |
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