Auditors reserve judgement on Universal Credit value for money

25 Nov 14

Auditors today said they are not yet able to judge if the government’s flagship Universal Credit reform to the welfare system will achieve value for money.

Publishing an update on the programme to merge six benefits into one monthly payment, the National Audit Office said a decision to'reset' the scheme following IT problems had reduced risks by extending its implementation timetable

Yesterday, Work and Pensions Secretary Iain Duncan Smith announced it expected most claimants to be receiving Universal Credit by 2019. This is later than the initial aim of 2017 as the rollout was delayed following concerns raised by the NAO and MPs.

Since the reset in early 2013, the department had developed and refined its ‘test and learn’ approach for a phased expansion of those eligible for Universal Credit, auditors stated.

Extending the planned transfer of most tax credit claimants to Universal Credit to the end of 2019 was key to the lower risk.

However, it was not yet clear whether benefits, which the Department for Work and Pensions estimate at £20.7bn in net present value, would be realised.

Auditor general Amyas Morse said the reset had placed Universal Credit on a sounder basis but at significant cost. This was due to both the extension of the implementation timetable, and the decision to use existing systems alongside simultaneous development of a new ‘digital service’.

‘It is now vital that the department quickly establish clear goals for delivering the programme, in terms of cost, time and functionality, against which it can be held to account,’ he added.

Responding to the report, a DWP spokesman highlighted that Duncan Smith’s announcement yesterday meant one-third of all jobcentres would be taking Universal Credit claims from next spring.

‘The NAO report recognises that we are reducing risks and making progress,’ he added.

‘In terms of value for money, when fully in place the economy will benefit by £7bn each year and is set to make 3 million families better off by on average £177 a month.’

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