NAO chief Amyas Morse has written a stinging letter to work and pensions minister Esther McVey, suggesting she has misled MPs on the conclusions of a recent report on Universal Credit.
In an open letter sent to McVey today, Morse says he is writing to “clarify the facts” around recent statements she made about the government’s flagship welfare reform in the House of Commons.
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In its most recent report on Universal Credit, published on 15 June, the NAO found that the programme may never be value for money, but changes made across the department mean it is too late to reverse the reforms.
Morse writes that he requested a meeting with McVey after she told the House on 21 June that this report did not take into account recent changes to the roll-out of Universal Credit, and that departmental analysis showed the reform, which sees six working age benefits rolled into one, is “working”.
After a second set of statements in the House on 2 July – during which McVey said that the NAO had argued the Universal Credit “needs to continue to go forward and it needs to continue at a faster rate” – Morse writes that he decided “reluctantly" to send McVey an open letter to "clarify the facts" around the report.
Morse directly challenges McVey’s claim that the Universal Credit reforms are working as not proven, saying: "The department has not measured how many Universal Credit claimants are having difficulties and hardship. What we do know from the department's survey is that although 83% of claimants responding said they were satisfied with the department's customer service, 40% of them said that they were experiencing financial difficulties, and 25% said that they couldn't make a claim online.
“We also know that 20% of claimants are not paid in full on time and that the department cannot measure the exact number of additional people in employment as a result of Universal Credit."
Responding to McVey’s claim that the NAO report was based on out of date information, Morse writes that the report was "fully agreed with senior officials in your department" and based on "the most accurate and up to-date information from your department". This had been confirmed in writing with the NAO on 6 June, he said.
"It is odd that by Friday 15 June [when the report was published] you felt able to say that the NAO "did not take into account the impact of our recent changes,” Morse continued.
He also challenged McVey's statement that the NAO had argued universal Credit is roll-out should not be slowed down.
"My recommendation made clearly on page 11 of the report is that the department must now ensure it is ready before it starts to transfer people over from previous benefits,” Morse writes.
This, he argued, will avoid performance "declining further" as the department takes on higher volumes of claimants.
Following the publication of the report, the former work and pensions secretary Iain Duncan Smith said the NAO’s latest report on the working-age benefits system was “a shoddy piece of work”, while separately a roundtable event hosted by the Institute for Government and the Social Security Advisory Committee found civil servants thought the NAO needed to take a more constructive approach to scrutinising welfare reform.