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Is Universal Credit in trouble?

Posted on 2013-09-25

Since the initial announcement of Universal Credit, the reform has come under much criticism. Initially the opposition was concerning the tenants receiving a single payment of which they had to pay their landlord their rent from. Landlords voiced their concerns about the possibility of rent arrears rising, which was compounded by the trials of the scheme up and down the country. Many areas found arrears soaring seven fold, including South Wales who saw rent arrears in just seven months go from £20,000 to £140,000.

Landlords weren’t the only critics. Many tenants also voiced their concerns about the reform. Research by the consultancy Policis has found nine out of ten tenants want their housing benefit paid straight to their landlords. The survey also showed that 35 per cent of tenants are not confident they would be able to keep up their rental payments and over half of tenants believe these plans would make it more difficult for them to manage their money than the current fortnightly payment scheme.

This month, a new wave of criticism has been ignited. This time it doesn't concern the reform itself, but in fact the amount of money it's costing thus far to implement. The Major Projects Authority- a Government troubleshooter- has suggested that as much as £200 million spent on the Coalition’s main welfare reform programme may have been wasted. The National Audit Office earlier this month found that £34 million spent on computer systems and services for the project has been written off because it delivered no value for taxpayers.

The MPA’s prediction was disputed by senior officials at the Department for Work and Pensions. Mike Driver, the department’s finance director, said it was “not the case at all” that £200 million will be lost. However, he admitted that the department is reviewing IT spending and may have well have to declare more losses.

The evidence session saw senior officials facing severe criticism of their management of the Universal Credit programme. Margaret Hodge, the committee chairman, savaged Robert Devereux, the DWP’s top official. “You yourself were not in sufficient day-to-day overall control in monitoring this process,” she told him. The committee identified what MPs said were extremely lax spending controls on the project. In one case, a senior civil servant gave a junior personal assistant the authority to sign off large IT contracts.

The criticism of officials follows claims made by Iain Duncan Smith, the Work and Pensions Secretary, that civil service failures are the main cause of problems with Universal Credit. Liam Byrne Labour’s shadow work and pensions secretary, said the hearing further damned Mr Duncan Smith. He said: “This has blown apart yet another cover-up by Iain Duncan Smith who it seems has tried to hide further write-offs on his disaster-hit Universal Credit project.

"We're now told there was no ministerial accountability and financial control was so weak that secretaries were signing huge purchase orders." Mr Byrne also demanded that the DWP publish an internal report into Universal Credit by auditors from PWC. Mrs Hodge, who has seen a copy of the document, said it raised yet more doubts about the project. (Source: The Telegraph).

Next month, Universal Credit will be launched to 6 Jobcentres including Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton. More claimants will later move on to universal credit as and when they have a significant change of circumstances, such as starting a new job or when a child is born. Then from April 2014 until October 2017, the rest of those affected in England, Scotland and Wales will be moved on to universal credit in stages. It will start in Northern Ireland from April 2014, six months after the system in the rest of the UK begins.

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