Worries mount ahead of Universal Credit rollout in Portsmouth after watchdog's damning report

It was touted as the government's revolutionary new benefits system, designed to help struggling families put food on the table.

Friday, 15th June 2018, 7:01 am
Updated Tuesday, 19th June 2018, 4:49 pm
DAMNING REPORT The new Universal Credit system is failing to deliver value for money and is causing hardship for low-income families, according to a new report

But instead, Universal Credit (UC) is failing to deliver value for money and is causing hardship for many low-income families.

That, at least, is the damning verdict today being issued by a government watchdog in its latest report.

The National Audit Office (NAO) said UC costs more to administer than the previous system of six benefits it replaced, including job seeker’s allowance, tax credit and housing benefit.

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Critics have said the NAO’s report ‘blows up’ the Department for Work and Pension’s (DWP) claims that everything was going well.

And with Portsmouth just months away until the controversial system is introduced, fears are mounting about the impact it could have on the city’s poorest residents.

Labour councillor Judith Smyth said the situation was already causing major problems for people nationally.

‘It’s a good idea in theory but in practice it’s disastrous,’ she said. ‘There are people in arrears with the rent which has led to some people going homeless as a result of the delays.

‘It’s inhumane to make people on low incomes to go so long without having their benefit to live on. It’s very difficult if you have a family to feed and don’t know what to do. People are struggling to get advice and understand how it works whether that is online or over the phone.’

Her worries echoed those in the findings of the NAO, which said the system’s rollout was already running behind schedule.

The national introduction was meant to have been completed by October last year, but only about 10 per cent of the final expected caseload are currently claiming the benefit. Portsmouth’s UC rollout is expected to happen in the autumn.

DWP research says satisfaction among claimants is comparable to those claiming benefits under the previous system, but an official survey showed that two out of five were experiencing financial difficulties, the NAO said.

Cllr Smyth feared UC could damage life chances of the 3,000 children who live in poverty in Portsmouth.

She added: ‘To make matters worse these people don’t have any money reserves to put down and keep them going while they wait. It is having a massive impact on families who are under great pressure. It is damaging the life chances of children already struggling.’

Around one in four new claims – 113,000 – were not paid in full on time last year, with late payments delayed by an average of four weeks, although some waited five months, the NAO reported.

While the NAO said the system’s running costs were £699 per claim against an ambition of £173 by 2024.

The DWP does not anticipate delays will improve this year and believes it will never achieve 100 per cent payment on time because of the need to verify claimants’ eligibility, the NAO said.

Amyas Morse, head of the NAO, said: ‘The department has kept pushing the UC rollout forward through a series of problems. We recognise both its determination and commitment, and that there is really no practical choice but to keep on with the rollout.

‘We don’t think DWP has shown the same commitment to listening and responding to the hardship faced by claimants. Maybe a change of mind-set will follow the publication of the claimant survey on June 8.

‘We think the larger claims for UC, such as boosted employment, are unlikely to be demonstrable at any point in future. Nor for that matter will value for money.’

The report noted that £1.9bn had been spent on UC, including £600m on running costs, while the DWP’s expectation of an annual benefit of £8bn ‘remains unproven’.

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 UC claimants getting into work faster and staying in work longer.

‘UC 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 per cent 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 UC 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.’