The Department for Work and Pensions should publish a set of clear milestones for the roll-out of Universal Credit, including plans for different claimant groups and local authorities, according to a Public Accounts Committee report published today.
The report acknowledged that Universal Credit - which aims to replace six means-tested benefits and tax credits with a single payment - has "stabilised and made progress” since the committee first reported on it in 2013. But the committee is critical of continued delays and a lack of transparency over progress milestones.
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DWP told MPs that it was on track to meet four of the five milestones it has published, including beginning the roll out of a new digital service in May 2016 and migrating existing welfare claimants by 2019.
The new digital service, however, is now due to complete six months later than when PAC looked at the programme a year ago, and this delay will push back “the date when existing claimants can start to be moved onto Universal Credit and reduces the number of Universal Credit claimants at the end of 2019,” says the report.
The committee says it is “disappointed by the persistent lack of clarity and evasive responses by the department to our inquiries, particularly about the extent and the impact of delays”.
The lack of “clear and specific milestones creates uncertainty for claimants, advisers, and local authorities” says the report, as well as making it difficult for parliament and the public to hold officials to account for progress.
Evaluation of Universal Credit, although “extensive”, has a narrow scope, says the report, so “impacts on claimants remain very uncertain”.
The PAC report comes as the Institute for Fiscal Studies (IFS) publishes an analysis stating that Universal Credit will cut the welfare bill by £2.7bn per year in the long term. But the report says that 2.1m working households will get less in benefits when Universal Credit is introduced, while 1.8m households will get more.
Robert Joyce, an associate director at the IFS and an author of the report, said: “The long run effect of Universal Credit will be to reduce benefits for working families on average – a reversal of the original intention.
“However, the potential gains from simplifying the working-age benefit system remain mostly intact: Universal Credit should make the system easier to understand, ease transitions into and out of work, and largely get rid of the most extreme disincentives to work or to earn more created by the current system.”
The PAC report also noted that DWP has not updated the business case for Universal Credit to take account of the tax credit changes announced in the chancellors Autumn Statement last November.
These changes will mean that the cost of transitional protection for people currently claiming tax credits increase by up to £150m each year, according to the Treasury, but DWP “could not clearly explain who would be covered by the transitional protection arrangements.”
A spokesman for the Department for Work and Pensions said: "Universal Credit will make work pay and increase financial incentives for people to work more, while also bringing the welfare bill under control."
The spokesman added: "Universal Credit also includes a wide range of additional benefits - including increased childcare and more support from a dedicated work coach both things that were ignored in the IFS's analysis."