Universal Credit Contents

1Background

Introduction

1.On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department for Work & Pensions (the Department).1 We also took evidence from Leicester and Newcastle City Councils, and from charities, the Trussell Trust and Mind.

2.The Department is introducing Universal Credit to address issues of poor work incentives and complexity within the existing welfare system, by replacing six means-tested benefits for working-age households with a single online claim. Universal Credit is designed to be “like work” and to “maximise claimants’ responsibility and self-sufficiency” by paying claimants monthly in arrears, and paying all elements direct to the claimant. Its overarching aims are to: encourage more people into work through better financial incentives, simpler processes and increasing requirements on claimants to search for jobs; reduce fraud and error; and be cheaper to administer than the benefits it replaces. The Department has estimated that Universal Credit will deliver a net benefit of £8 billion a year.2

3.The Department started work on Universal Credit in 2010 with an original completion date of October 2017. However, the Government reset the programme in 2013, following a series of problems managing it and developing the necessary technology. Following the reset, the Department introduced a twin-track approach. It started to develop its long-term digital solution, known as ‘full service’ alongside using the systems it had built before the reset for its ‘live service’, which was available to claimant groups whose claims were simple to manage (mainly single, newly unemployed adults with no dependent children). It began rolling out full service in May 2016, extending Universal Credit to all claimant groups previously eligible for legacy benefits. Since then there have been several delays to the programme, which is now unlikely to complete before 2023.3

4.By the end of March 2018 the Department had spent £1.3 billion of the £2 billion it expects to spend on the programme by 2024–25.4 By 14 June 2018, it had rolled out full service to 338 jobcentres and 980,000 people were claiming Universal Credit, around 12% of the 8.5 million people the Department expects to be on Universal Credit by 2023.5 The Department plans to complete the rollout of its digital service to all jobcentres by December 2018. To date, people have come onto Universal Credit because they have either made a new claim, or were on an existing benefit and experienced a change in circumstance. The Department plans to begin transferring those on existing benefits to Universal Credit in July 2019.6

5.This Committee has previously reported on Universal Credit four times. Since 2015 the Committee has commented that programme management had stabilised but has expressed concerns around the Department’s openness and response to feedback.

Listening to feedback

6.When the previous Committee first reported on Universal Credit in November 2013, it commented that the Department’s Universal Credit team was isolated and defensive, and had developed a culture of reporting only good news and of denying that problems existed. We called for the Department to be more realistic and transparent and warned about the risks to the programme of it taking such a blinkered approach.7 In February 2016 the Committee reported that it remained unconvinced that the Department was becoming any more transparent,8 and in November 2016 it warned that it was not doing enough to address the Committee’s previous recommendations.9

7.Both Newcastle and Leicester city councils told us there is a stark contrast between the positive engagement they enjoy with the local jobcentre, and the frustration of dealing with the Department at a national level. For example, Newcastle City Council said that while the Department listens at a local level, it has not been able to influence the bigger picture and feels it is having the same conversations with the Department twelve months on. Similarly, Leicester City Council told us that the local jobcentre is very engaged and trying to do its best for claimants, but that nationally the Department has not learned lessons from areas which have had Universal Credit for longer periods, particularly around rent arrears and hardship.10

8.We were concerned about the Department’s attitude in the face of feedback from organisations facing difficulties in relation to Universal Credit.11 The National Audit Office had gathered views about the impact of Universal Credit from a range of organisations - including local authorities, housing providers, jobcentre staff and advisory services–to which the Department had responded by saying it believed much of the evidence was provided by organisations which were facing funding constraints and were lobbying for policy changes.12 The Department claims that it listens to feedback. But the evidence, underlined by the Department’s attitude in our evidence session, suggests otherwise.13 In practice, it does not seem to listen or give sufficient credence to issues raised by frontline organisations. The Department itself holds discussion forums with external organisations, but again attributes many differences to views about policy rather than the implementation of Universal Credit. It has responded to purely operational concerns–for example by improving the wording of claim forms–but has not been clear about how it tracks and responds to the operational impacts of policy design choices.14

9.Following the Comptroller and Auditor General’s report, which raised concerns over the implementation of Universal Credit, the Department repeatedly denied the substance of his findings both in the media and in Parliament and maintained that Universal Credit was working well. The Comptroller & Auditor General wrote an open letter to the Secretary of State to ‘clarify the facts’ and to confirm that the report had been fully agreed with senior officials in the Department.15 On 4 July 2018 the Secretary of State had to apologise for misleading Parliament regarding the content of the report.16 Such defensiveness was also evident throughout the evidence session.

1 Report by the Comptroller and Auditor General, Rolling out Universal Credit, Session 2017–19, HC 1123, 15 June 2018

2 C&AG’s Report, paras 15, 1.3, 2.3

3 C&AG’s Report, paras 2, 1.9, 1.17–18

4 C&AG’s Report, para 1.25

5 Universal Credit experimental official statistics: 29 April 2013 to 14 June 2018; C&AG’s report, key facts

6 C&AG’s Report, paras 1.18, 1.20, 1.22

7 Committee of Public Accounts, Universal Credit: early progress, Session 2013–14, HC 619, November 2013, pg 5 para 3

8 Committee of Public Accounts, Universal Credit: progress update, Session 2015–16, HC 601, 3 February 2016, page 3

9 Committee of Public Accounts, Universal Credit and fraud and error: progress review, Session 2016–17, HC 489, 7 November 2016, page 4

10 Q 33

11 Qq 34, 158–159

12 C&AG’s Report, para 2.26