Means-tested benefits need better co-ordination, say MPs
By Nick Mann | 12 January 2012
One body should be given responsibility for ensuring the different
parts of the welfare system work together effectively and do not unintentionally penalise
claimants, MPs said today.
In a report on the £87bn spent every year on means-tested
benefits, the Commons Public Accounts Committee found that no department had overall
responsibility. Instead, nine government departments and 152 local authorities
administer 30 different means-tested benefits, which together account for around
13% of total public spending.
MPs also found that the ‘sheer complexity’ of the current
benefits system placed a heavy burden on claimants, with those claiming
multiple benefits having to deal with several different bodies.
PAC chair Margaret Hodge said: ‘This can be confusing and
potentially discourage legitimate applications. Departments responsible for
means testing must work together to get a better understanding of the burdens placed
She added: ‘There needs to be a single body responsible for overseeing
the interaction between different benefits, means tested or not, and ensuring
consistency and value for money.’
Welfare reform, and in particular the introduction of a
single Universal Credit, aimed to simplify the system and improve the incentive
for claimants to work, the committee noted.
But for this to happen, a better understanding was needed
of the impact some means-tested benefits had on claimants’ incentive to work,
the MPs said. They also found a lack of understanding of how incentives to work
interacted with other reforms being introduced by government.
As an example, the committee cited the potential impact a
university bursary award would have on a family claiming means-tested benefits.
Hodge said: ‘The government spends at least £87bn a year on means-tested benefits, and
the poorest households rely on them for a third of their
income. So it is crucial that government gets the design and implementation of
means-tested benefits right, to protect vulnerable claimants as well as the
‘If its fundamental reforms of the benefits
system are to work, the government must learn from past experience and co-ordinate
benefits more effectively.’
Responding to the committee’s
conclusions, the Department for Work and Pensions said the Universal Credit
would strike the ‘right balance’ between getting support to those most in need
and encouraging work, as well as protecting the system from fraud and error.
A spokesman for
the department said: ‘This report highlights exactly why we need
Universal Credit. It has been designed across departments with the benefits and
challenges raised by the PAC in mind. It will mean more people getting the
money they are entitled to whilst reducing complexity and fraud in the system.’