Universal Credit: the Government still isn’t listening to bad news

Gone too far to stop, but too far gone to work as intended. Even by the standards of previous National Audit Office (NAO) reports on major projects that have gone awry, today’s report on Universal Credit makes grim reading.

Universal Credit (UC) combines six benefits that could send claimants from pillar to post when making their claim into, in theory, one streamlined one, intended to make the transition into and out of work and back again seamless and easy, while making it clearer than ever before that there were real financial gains to be had from being in even low-paid work. At the time it was conceived – and even now – there was widespread support for the principle.

Its initial problems are well documented. The original timetable for implementation was wholly incredible. The first IT system proved so insecure that that the Department for Work and Pensions (DWP) had, in effect, to pause and start again; using the old IT with much manual workaround to learn something about how UC would operate in practice, while building a new, hopefully secure, version. The generosity of the benefit has been repeatedly cut.

All 8.5 million claimants – many of whom it must be remembered are in work – were meant to have been transferred to the new system by October last year. As of March this year, just 10% of the planned caseload are on UC, and they are new claims. The migration of those already on tax credits and other parts of the merged system has yet to begin. The end date for completion has headed off repeatedly into the middle distance. The current target was moved back, just this month, by another year to March 2023.

And for a significant minority of claimants, UC is clearly causing misery. Behind that lies a design decision that ministers always recognised was a challenge, but has proved to be a much bigger one than envisaged: the monthly assessment and payment periods. Rather than having separate claims for payments paid for different periods in the legacy benefits, it all comes as one. But that means claimants have to assemble the evidence for all parts of their claim in one go – identification, rent, childcare costs, earnings, etc. When the claimant has assembled the proofs, the department can then struggle to verify it all.

So, a fifth of claimants are still not being paid on time, and some wait literally months. A good chunk of those who do get paid on time – the target wait is currently five weeks from claim – are struggling.

To assemble its report, the NAO went out into five local authority areas where UC is up and running, to hear and assess for itself the evidence that the Commons Work and Pensions Committee has been hearing about hardships being experienced. These include rent arrears, greater use of food banks and cash-strapped local authorities having to do more to support claimants, with no guarantee that DWP will meet their costs. Over some issues, the department has adapted: making it clearer that advance payments are available while people wait, for example, with some 60% now receiving one. But that, of course, is a repayable loan. So in a benefit system intended to support the less well-off, both in and out of work, the first effect is to put a majority of its new claimants into debt.

The NAO judges, and probably rightly, that UC is now so far down the road that there is no going back. But further changes are plainly needed. Among the few silver linings in the report is an acknowledgement that the ‘agile’ approach to building the newer version of UC is working (up to a point), with the department listening to suggestions from its frontline staff about how to make the system work better as it is developed and implemented. But it stands accused of not listening enough to the experience of the people who matter most in all of this: its customers, the claimants. Right from the beginning, there has been an issue about the department, and/or its ministers, not wanting to hear the bad news.

Depressingly, the tin ear lives on. The department’s response to the NAO’s report rejects outright some of its key findings and seeks to assert that all is well. That does not bode well for the future.