THE roll-out of Universal Credit will be later and more expensive than planned – and make working families worse off, two reports have found.
Iain Duncan Smith’s flagship benefits plan has already been beset by delays and yesterday, the Government’s own Public Accounts Committee (PAC) quoted a prediction by the Office for Budget Responsibility prediction that its latest March 2021 target date will miss the mark by six months. In a report, the committee called on the Department for Work and Pensions (DWP) to explain the delays, set out the costs and reveal how tax credit changes affect the case for the scheme, which is forecast to save £2.7 billion a year.
Meanwhile, the Institute for Fiscal Studies found an estimated 2.1 million families switched onto the credit, which replaces six current benefits, will face an average loss of £1,600 a year. It also found 1.8m will gain an average of £1,500.
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Last night, a Citizens Advice Scotland spokesman, Rob Gowans, said: “We have always been concerned about the cuts that are being built into the system, and today’s independent reports are very worrying in that regard.
“We would call on the Government to make sure that the change to Universal Credit does not mean less money in practice for any claimants, and in particular for those who are already struggling.”
According to the PAC, the DWP has been “evasive” when asked about the extent and impact of delays to the roll-out programme, which started in the Manchester area during 2013 and is expected to be available to new, single, job-seeking claimants across the UK by the spring.
Existing benefit and tax credit claimants without a change of circumstances will be brought into the programme later, and the PAC fears continuing delays will prevent the scheme delivering the promised £2.6bn in annual savings from fraud and error.
Urging the DWP to report publicly, committee chairwoman Meg Hillier hit out against the department for creating “uncertainty for claimants” and making it “difficult” for MPs and taxpayers to hold it to account.
The committee has called on the DWP to set out the facts by May, including details on contingency plans for problems with the digital service, which “may increase costs” and “delay the realisation of the benefits Universal Credit is expected to deliver”.
The PAC raised concerns about the impact of the business case, with the implementation already budgeted at about £1.8bn and several million pounds lost to computer problems.
Yesterday, the DWP said Universal Credit is “transforming lives across the country, with claimants moving into work significantly faster and earning more than under the old system”.
A spokesperson said additional benefits like increased childcare and support from a dedicated work coach had been “ignored” by the IFS.
However, Labour’s shadow Work and Pensions Secretary, Owen Smith, said Duncan Smith’s claims were “in tatters”, adding: “Everyone can now see that successive cuts to Universal Credit have destroyed many of the work incentives that were supposed to be the very reason for the scheme.”
The Equality Trust, which works to reduce inequality, said the new system “leaves the poorest running up the down escalator, struggling to keep pace with others”.