The Department for Work and Pensions has dealyed a major expansion of its flagship welfare reform, Universal Credit, amid concerns that it could push benefit claimants into financial hardship on a mass scale.
Over the weekend it was reported that work and pensions secretary Amber Rudd had scrapped plans for a vote to push forward to the next phase of the welfare overhaul, which will merge six benefits into one payment.
Rudd will now seek to implement a test phase transferring 10,000 people to the new system, according to the Observer. In so doing, she aims to "receive a fresh parliamentary mandate and be personally sure the system is working in the interests of every claimant" a government source told the newspaper.
The reports came after a series of warnings from parliamentary committees, the National Audit Office and MPs across the political spectrum about the impact it could have on welfare recipients.
The policy has been plagued by delays and has faced considerable pushback from MPs and external organisations amid reports that has pushed some claimants into financial hardship. An NAO report published last summer found 20% of new claimants between January and October 2017 waited five months or more for payments.
The same report found Universal Credit had failed to deliver value for money, but said it would be so complex and costly to abandon the reform that DWP was left with "no practical choice" but to press ahead.
In October Neil Couling, the director general responsible for Universal Credit at DWP, blamed staff shortages for the delayed payments.
In December, the Work and Pensions Select Committee urged Rudd to halt the rollout amid “deep, ongoing concerns” that the department was not ready for the new powers it would gain from the proposed Universal Credit regulations.
In a letter to a House of Lords Secondary Legislation scrutiny committee, committee chair Frank Field said Rudd must drop the legislation until the department was able to demonstrate “operational capacity” and show that it could ensure the welfare of claimants before the switch to the new system.
He added that parliament had been given "insufficient detail to make an informed decision on DWP’s proposals” in the draft regulations. It added that peers shared MPs concerns about DWP’s capacity to deliver managed migration without forcing vulnerable claimants into “hardship or debt”.
This was one of several warnings from the committee over the policy. In its most recent report, published over Christmas, the MPs claimed that a requirement for parents to pay childcare costs upfront before being reimbursed by DWP under Universal Credit would them from working – in direct conflict with the reform’s stated aim of getting more people into work.
Field welcomed Rudd’s decision to push the vote, saying: "The government seems finally to have woken up to the human catastrophe that was waiting to happen under its ill-formed plans for moving people on to Universal Credit."
"The secretary of state deserves credit for revisiting these plans. As a next step, and in keeping with this new approach, it is essential for the government to proceed with ‘managed migration’ of people to universal credit only once it has proved to parliament that it will not push more vulnerable people to the brink of destitution."
Mark Serwotka, general secretary of the PCS union, also said the move was welcome but that the government needed to go furhter and " radically overhaul the social security system".
"We welcome Amber Rudd realising that the latest phase of Universal Credit roll out will be a disaster and that she has delayed it. However the entire roll out should not just be reduced in size but completely halted," he said. Labour should also "commit to scrapping Universal Credit altogether", he added.