Universal Credit Full Rollout Faces Significant Cost Overrun and Delays, Reports the National Audit Office
New Estimates Revealed
The National Audit Office disclosed that the complete implementation of Universal Credit will require an extra expenditure of at least £900 million and an additional six years compared to previous projections. This substantial increase is primarily attributed to inflation and the prolonged schedule.
History and Progression
Initially introduced by the Tories almost 14 years ago, Universal Credit serves as a replacement for six “legacy” benefits, including Child Tax Credits. Despite the longstanding presence of this welfare reform, the Government is still in the process of transitioning claimants.
Escalating Costs
In 2020, the Department for Work and Pensions (DWP) initially estimated a cost of £2.85 billion for the implementation of Universal Credit, marking an £834 million surge from the 2018 projections. Subsequently, in December 2023, this figure rose further to £2.92 billion, representing an additional £78 million escalation.
Challenges Faced
Highlighting the complexities of the transition, auditors caution that approximately one in five households utilizing the old Tax Credits system encountered payment halts due to their failure to migrate to Universal Credit. Despite invitations extended to claimants to switch to the new system by the conclusion of 2023, a significant portion did not make the transition.
Unforeseen Termination of Benefits
The NAO report reveals alarming statistics, with around 31,000 individuals out of 150,000 cases processed by the DWP experiencing benefit terminations during the closure of their cases. The watchdog expressed concerns regarding the Department’s limited comprehension of the reasons behind some legacy benefit claimants not adopting Universal Credit.
Call for Comprehensive Evaluation
Gareth Davies, Head of the NAO, emphasized the necessity for DWP to ensure that individuals who have not migrated to Universal Credit receive their entitled benefits. While acknowledging some positive labor market impacts resulting from Universal Credit, Davies stressed the Department’s obligation to substantiate the program’s anticipated benefits on a larger scale indicated in the business case.
Department’s Response
Responding to the findings, a DWP spokesperson underscored that most Tax Credit recipients have successfully transitioned to Universal Credit, accessing crucial support while progressing towards financial self-sufficiency. The spokesperson noted the sustained positive influence of Universal Credit on employment rates, with recipients more likely to secure employment six months post-claim. Additionally, a variety of assistance programs are available to aid individuals in their transition, including extensions for those requiring heightened support.
FAQs
1. What factors have contributed to the increased costs in the full rollout of Universal Credit?
The increased costs are largely attributed to inflation and delays in the implementation timeline.
2. How many years longer is the full rollout of Universal Credit estimated to take?
The rollout is projected to take an additional six years than previously anticipated.
3. What were the initial and revised cost estimates for implementing Universal Credit?
Initially forecasted at £2.85 billion, the cost escalated to £2.92 billion in December 2023.
4. Why have some households on the old Tax Credits system experienced payment stoppages?
Approximately one in five households faced payment halts due to their failure to transition to Universal Credit.
5. How many legacy benefit claimants had their benefits terminated during the transition process?
Out of 150,000 cases closed, around 31,000 individuals had their benefits terminated, raising concerns about the understanding of claimants’ decisions.
6. What does the National Audit Office recommend regarding the evaluation of Universal Credit’s impact?
The NAO recommends a thorough assessment of Universal Credit’s effects to ensure the program’s efficacy and value for money.
7. How has Universal Credit positively influenced the labor market according to the NAO report?
The report highlights some positive impacts on the labor market resulting from Universal Credit, although the full extent of benefits remains to be demonstrated by the DWP.
