The Department for Work and Pensions has been urged to re-examine its plans to roll out Universal Credit, with a group of MPs warning more people face being pushed into financial hardship as the reform is implemented more widely.
Members of the Public Accounts Committee said they were “seriously concerned” about DWP’s ability to move an additional 4 million people from the existing benefits system to Universal Credit amid widespread evidence of hardship among claimants who have already been migrated.
They added that the pressure on staff and systems woud only increase as the number of people enrolled on Universal Credit grew, and warned there was “a real risk that we will see claimants facing hardship on a much larger scale”.
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The brainchild of former Conservative leader Iain Duncan Smith, Universal Credit combines a handful of unemployment and low-income benefits into a single payment. At one stage full adoption of the new system was envisaged by 2015, but service-specification changes and a lack of clarity on IT requirements delayed progress.
The government last month pushed its target date for full implementation back to December 2023.
The PAC’s just-published report urges the department to set out its plans to deliver the managed migration process in a way that “will not result in a deterioration of service quality or the creation of further hardship for claimants”.
PAC members said the department should also say which metrics it will use to determine whether the migration is working, and put contingency measures in place that would allow it to slow down, pause or stop the process if problems arise.
Reports over the summer pointed to an increase in numbers of people using food banks in the areas where the full version of Universal Credit is being rolled out.
The PAC said around one in five claimants did not receive their full payments on time, with some waiting for weeks – running up rent arrears and other debts while they waited.
MPs said the department needed to act to resolve those delays “as a matter of urgency” and put systems in place to measure hardship among claimants.
The pressure on front-line staff who are responsible for tailoring elements of Universal Credit to people who need extra support will also increase, the PAC report warned.
A reliance on coaches to make adjustments such as the number of hours claimants must spend looking for work can lead to unrealistic expectations on claimants, increase their risk of being sanctioned and leave coaches "overwhelmed", it said.
It called for more support for work coaches and better data gathering to ensure they are equipped to work with vulnerable claimants.
MPs said it was “hugely regrettable” that DWP had so far dismissed evidence that showed Universal Credit was hurting claimants. They argued that a “systemic culture of denial and defensiveness in the face of any adverse evidence” threatened the programme’s delivery and called on the department to improve how it listens to and acts upon feedback on problems with the system.
“Local organisations have found the department unresponsive to issues they have raised, and told us that the department is not learning lessons and applying them to the programme,” they said.
Elsewhere in the report, the committee said DWP must improve the way it uses evidence to implement and set targets for Universal Credit. It criticised a claim by ministers and the department that the reform would help to get 200,000 people into work, which it said was an unmeasurable target. DWP had also said those jobs will provide a £5bn boost to the economy.
The department has acknowledged that it will be unable to measure how many jobs have been added to the economy as a result of Universal Credit, but said it stands by the figure based on its projections.
“We do not believe this is a sufficient argument,” the MPs said. They said DWP’s inability to measure against the target “cast doubt on whether the additional cost of Universal Credit will ever prove to be value for money”, echoing the findings of a National Audit Office report in June.
“In future the department must make sure that all claims for Universal Credit are supported by empirical evidence rather than theoretical models,” the report said.
A DWP spokesperson said the department was already working to address some of the issues identified in the PAC report, with one example being the creation of a new partnership with the Citizens Advice Bureau to improve support for vulnerable claimants.
“We will carefully consider the findings in the report,” the spokesperson said.
“So far this year we have already announced several improvements to Universal Credit, such as plans to reinstate housing benefit for vulnerable 18-21 year olds, making direct payments to landlords, offering 100% advances and providing an additional two weeks of housing benefit for claimants.”