Universal Credit Or Universal Failure?

The Universal Credit welfare reform has come under criticism as it is dubbed ‘poor value’ and is blighted with technical faults and difficulties.

What is Universal Credit?

Universal Credit is a new welfare reform that aims to replace 6 key benefit payments into a single monthly payment for people in or out of work. £425m has currently been spent to date on the scheme and it consists of a standard allowance plus other ‘elements’, for example, childcare, housing and caring. It will also provide provisions for those with a limited capability to work. Therefore, individual circumstances will affect the amount a claimant will receive.

If a claimant qualifies then this monthly payment will cover everyone who qualifies for support in your family. For the purpose of the benefit, ‘Family’ could mean the claimant as a single person, or their partner/children.

the Universal Credit replaces the following tax credits and benefits;

  • Tax credits
    •  Child Tax Credit
    • Working Tax Credit
  • Income-based Jobseeker’s Allowance
  • Income Support
  • Housing Benefit

Child Benefit will not be replaced by Universal Credit. The aim of the reform is to ensure that people are better off in work and to reduce fraud.

When will it be introduced?

Universal Credit is currently being used in parts of Greater Manchester and Cheshire as a pilot run. A gradual introduction to the rest of the UK was planned for October 2013, but this has been delayed following the pilots. When Universal Credit is implemented, tax credits will not be affected straight away so the payment will continue as normal to begin with.

The problems

 £425m has currently been spent on the reform, and £34m was simply written off for investment in IT systems.

The National Audit Office (NAO) has claimed that the pressure to hit targets meant risks were taken in the implementation of Universal Credit. This resulted in “limited functionality” in IT systems with an unfamiliar project management approach used. This was underlined by a delay in the roll-out of the new benefit due to IT glitches, although the Work and Pensions Secretary Iain Duncan Smith now claims these have been fixed.

The cause of the problem could be due to the merging of several complex computer systems that were in use in the benefits offices, HM Revenue and Customs and local councils. Amyas Morse, head of the NAO, said that “The programme suffered from weak management, ineffective control and poor governance”, indicating that it was not just the software that was causing the issues.

All is not lost however, as he then went onto say that “Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out.” 

Yet more blunders

Universal Credit has proved an admirable demonstration on how not to run a department, but unfortunately this seems to be a continued theme across the Civil Service at the moment. The problem came to light as the Ministry of Defence wasted £74m due to basic accounting errors, and the news that the Government has failed its audit on the Whole of Government Accounts. In a time of economic instability the country cannot afford to be throwing away money like this, and it’s time the Civil Service and the Government upped their game.