Rolling out Universal Credit

Transcription

1 This statement is nt fr publicatin r bradcast befre 00:01 n FRIDAY 15 June 2018 HC Reprts by the Cmptrller and Auditr General Rlling ut Universal Credit Universal Credit has taken significantly lnger t rll-ut than intended, may cst mre than the benefits system it replaces, and the Department fr Wrk and Pensins (the Department) will never be able t measure whether it has achieved its stated gal f increasing emplyment. In tday s reprt, the Natinal Audit Office (NAO) cncludes that Universal Credit has nt delivered value fr mney and it is uncertain that it ever will. Since the NAO last reprted n Universal Credit in 2014, the Department has made sme prgress in managing the prgramme but has itself admitted that it cannt measure whether Universal Credit will lead t its ecnmic aim f getting an additinal 200,000 peple int wrk. Universal Credit may als cst mre t administer than the previus system f benefits it replaces, with current running csts at 699 per claim, against an ambitin f 173 per claim by The rll-ut has been cnsiderably slwer than was initially intended. It was due t cmplete in Octber 2017, but after a number f prblems, eight years later nly arund 10% f the final expected caselad are currently claiming Universal Credit 1. The Department s research states that satisfactin amng claimants f Universal Credit and thse claiming benefits under the previus system is generally cmparable t what it replaces 2. Hwever, in a recent survey by the Department, fur in ten f claimants wh were surveyed stated that they were experiencing financial difficulties. The Department des nt accept that Universal Credit has caused hardship amng claimants but the NAO has seen evidence frm lcal and natinal bdies that many peple have suffered difficulties and hardship during the rll ut f the full service. The NAO states the Department has nt shwn sufficient sensitivity twards sme claimants and that it des nt knw hw many claimants are having prblems with the prgramme r have suffered hardship. In 2017, arund ne quarter (113,000) f new claims were nt paid in full n time. Late payments were delayed n average by fur weeks, but frm January t Octber 2017, 40% f thse affected by late payments waited in ttal arund 11 weeks r mre, and 20% waited almst five mnths. Despite imprvements in payment timeliness, in March % f new claimants did nt receive their full entitlement n time with 13% receiving n payment n time. The Department des nt anticipate payment timeliness t imprve significantly in On this basis, the NAO estimates that between 270,000 and 338,000 new claimants will nt be paid in full at the end f their first assessment perid thrughut Thse with mre cmplex cases are mre likely t be paid late. 3 The Department believes it will never achieve 100% payment timeliness because it needs by law t verify the claimants eligibility.

2 The Department expected mst claimants wuld have enugh mney t cpe ver the initial waiting perid after their claim is submitted (previusly six weeks, nw five). In reality, nearly 60% f new claimants (arund 56,000 a mnth) receive a Universal Credit advance t help them manage befre receiving their first payment. 4 Increases in rent arrears since the intrductin f Universal Credit in an area, which claimants can ften take up t a year t repay, have been reprted by lcal authrities, husing assciatins and landlrds. Sme private landlrds tld the NAO they have becme reluctant t rent t Universal Credit claimants. In three f the fur areas the NAO visited and fr which data was available, the use f fdbanks increased mre rapidly after Universal Credit full service was rlled ut t the area. This agrees with the Trussell Trust s reprt shwing upsurges f 30% in fdbank use in the six mnths after Universal Credit rlls ut t an area, cmpared t 12% in nn-universal Credit areas. Lcal rganisatins which supprt claimants and assist in the administratin f the benefit have reprted incurring additinal csts. The Department says it has tld lcal authrities it will pay them fr additinal csts assciated with administering Universal Credit if they prvide evidence f the expenses, but it places the burden f prf n the lcal authrities, uses its discretin n assessing claims and has nt sught t systematically cllect data n wider csts. It will therefre have n means t assess the full mnetary impact that Universal Credit is having. The prgramme has necessitated a number f changes which have becme increasingly embedded acrss the Department. It wuld be s cmplex and cstly t return t legacy benefits at this stage that the NAO believes there is n practical alternative but t cntinue with Universal Credit. The Department must nw ensure that the prgramme des nt expand befre business-as-usual peratins can deal with higher claimant vlumes, and must learn frm the experiences f claimants and third parties, as well as the insights it has gained frm the rll-ut s far. The NAO recmmends that the Department shuld capture intelligence n claimants issues and the pinins f delivery partners and external stakehlders in a systematic way. Amyas Mrse, head f the Natinal Audit Office, said tday: The Department has kept pushing the Universal Credit rllut frward thrugh a series f prblems. We recgnise bth its determinatin and cmmitment, and that there is really n practical chice but t keep n keeping n with the rllut. We dn t think DWP has shwn the same cmmitment t listening and respnding t the hardship faced by claimants. Maybe a change f mind set will fllw the publicatin f the claimant survey n 8 June. We think the larger claims fr Universal Credit, such as bsted emplyment, are unlikely t be demnstrable at any pint in future. Nr fr that matter will value fr mney. Key facts 1.9bn Spend t date n Universal Credit, cmprising 1.3bn n investment and 0.6bn n running csts 8.0bn Department fr Wrk & Pensins expectatin f the annual net benefit f Universal Credit, which remains unprven 113,000 Number f late payments f new claims in 2017

3 Psitin as at March 2018 Frecast ( ) Caselad (claimants) 815,000 (490,000 n full service and 325,000 n live service) Caselad (husehlds) 660,000 (490,000 n full service and 325,000 n live service) 8.5 millin 6.6 millin Number f claimants per wrk cach (thse wh have a dedicated wrk cach) Number f claimants per case manager Cst per claim Percentage f claimants able t verify identity nline 38% 80% Payment in full and n time (first assessment perid) 79% N target Ntes fr editrs ENDS 1. Since the Department started rlling ut full service, it has changed its rllut schedule fur times (see paragraph 1.18 and Figure 4). In July 2016, it annunced it wuld rll ut full service mre slwly, ending in September It als said it wuld cmplete the prgramme by March 2022, a year later than expected. This was t accmmdate plicy changes annunced in the summer Budget The Department als built cntingency int its timetable t allw fr further slippage. The Nvember 2017 Budget intrduced several plicy changes t Universal Credit and a further three-mnth delay t December 2018 t cmpleting full service rllut. The Department has used sme f its cntingency timing t accmmdate these changes. In March 2018, the Department annunced a further change t its rllut schedule fr jbcentres in Wales. This was because f delays cmpleting its Welsh language service. This has nt affected the Department's plans t cmplete full service rllut t all jbcentres by December On 7 June 2018, the Department annunced that it wuld extend the cmpletin f Universal Credit t March 2023 in rder t adapt the system t accmmdate changes t transitinal prtectin, which is designed t ensure claimants mving frm legacy benefits are n wrse-ff % f Universal Credit claimants surveyed by the Department reprted satisfactin with the verall service, cmpared t 82% f thse n Emplyment Supprt Allwance and 85% n Jbseekers Allwance (Figure 8). 3. The Department s survey f Universal Credit claimants fund that nly 54% f claimants reprted that they were able t make a claim nline withut help; thse with health cnditins were significantly mre likely t reprt difficulties than thse withut a cnditin. T receive payment, a claimant must verify their

4 identity, sign a claimant cmmitment and prve that they reside in the UK. They must als prve they are eligible fr each element they claim, such as husing r childcare. Where things g wrng peratinally r claimants struggle with prcesses, they wait lnger fr payment and can be at risk f financial hardship (see paragraph 2.13 and Figure 9). 4. While advances can help claimants manage financially in the very early stages f a claim, they are lans, which are usually repaid t the Department thrugh deductins frm future Universal Credit payments. These deductins start in the first mnth after receiving the advance. In 2017, average new claim advance repayments were arund 43 per mnth, r arund 8% f the average mnthly payment. Hwever claimants may als face deductins fr ther reasns, fr example rent arrears, utility repayments and repayment f tax credit verpayments. Ttal deductin rates can be up t 40% f the claimant's standard allwance - at which pint the Department nrmally caps deductins (see paragraph 2.25). 5. The Department believes that Universal Credit will cst 99 millin less a year t administer than legacy benefits. This requires Universal Credit t save 335 millin thrugh autmatin f prcesses and streamlining six benefits int ne. The Department then expects t reallcate abut 237 millin f this t spend as supprt fr wrk searches fr up t ne millin additinal claimants wh are nt subject t cnditinality under legacy benefits. Hwever, we cannt be certain that Universal Credit will ever be cheaper t administer than the benefits it replaces (See paragraph 3.18 and 3.19). Achieving the verall efficiency savings depends n: reducing the running csts f each claim frm an average f 1,077 in t 173 by (Figure 20). n additinal csts fr lcal bdies. Hwever, as we discuss in Part Tw (paragraphs 2.29 and 2.36, and Appendix Five), lcal bdies tld us that Universal Credit was creating additinal csts. The Department has said it will nt measure these additinal csts until lcal rganisatins can demnstrate they are being caused by Universal Credit; Universal Supprt delivered lcally nt extending beynd the implementatin perid, during which it will cst 170 millin. Hwever, as we set ut in Part Tw (paragraphs 2.28 t 2.30), lcal bdies and vulnerable claimants are likely t require sme supprt beynd this perid; and debt recvery nt csting mre than it des under legacy systems (see paragraphs 3.8 and 3.9). 6. Press ntices and reprts are available frm the date f publicatin n the NAO website. Hard cpies can be btained by using the relevant links n ur website. 7. The Natinal Audit Office scrutinises public spending fr Parliament and is independent f gvernment. The Cmptrller and Auditr General (C&AG), Sir Amyas Mrse KCB, is an Officer f the Huse f Cmmns and leads the NAO. The C&AG certifies the accunts f all gvernment departments and many ther public sectr bdies. He has statutry authrity t examine and reprt t Parliament n whether departments and the bdies they fund, natinally and lcally, have used their resurces efficiently, effectively, and with ecnmy. The C&AG des this thrugh a range f utputs including value fr mney reprts n matters f public interest; investigatins t establish the underlying facts in circumstances where cncerns have been raised by thers r bserved thrugh ur wider wrk; landscape reviews t aid transparency and gd practice guides. Our wrk ensures that thse respnsible fr the use f public mney are held t accunt and helps gvernment t imprve public services, leading t audited savings f 734 millin in Press Ntice 30/18 All enquiries t the NAO press ffice harriet.craig@na.gsi.gv.uk / will.pllard@na.gsi.gv.uk / pressffice@na.gsi.gv.uk

5