UC Rollout £600M Under Budget, Insists IDS

The roll-out of universal credit has cost less than expected and is being carefully delivered “stage-by-stage”, the work and pensions secretary says.

Iain Duncan Smith told the Andrew Marr Show the new benefit was £600m under budget and was being tested gradually.

Universal credit, which replaces six payments, is being introduced across the country on Monday. It should be offered by all job centres by 2016.

Labour called it a “failing programme” that would take years to implement.

‘Waste and delays’

Universal credit replaces housing benefit, JSA and tax credits, and is currently available in nearly 100 job centres.

About 50,000 people in selected areas have claimed it since it was introduced in April 2013 – far fewer than the government originally said would be getting it by now.

Technological problems have caused delays and forced ministers to write off tens of millions of pounds.

But from Monday the benefit will be made available in 150 job centres over the next two months, with all job centres due to be covered by next year.

Mr Duncan Smith said he had acted on the advice of experts to introduce the new benefit in stages.

He said: “We remember what happened with tax credits and others under other governments, Labour and Conservative, where you launch them all at once, they don’t go right.

“Under tax credits 400,000 didn’t get their payments and billions have been lost.

“So we brought in some other people, they looked again at, they advised me and I took that advice, which was do it stage by stage, test it, then roll it out, then test the next bit, then roll it out and that’s what we’re actually doing.”

What is universal credit?

• An overhaul of the benefits system driven by Work and Pensions Secretary Iain Duncan Smith
• It will eventually replace six benefits: Income-based job seekers allowance, income-related employment and support allowance, income support, working tax credit, child tax credit and housing benefit
• Universal credit is tapered so that benefit payments are reduced gradually as claimants earn more
• There are no limits to the number of hours claimants can work a week
• Ninety per cent of universal credit claims are made online

The government’s analysis suggests claimants in pilot areas were 13% more likely to have found work within four months than similar groups claiming JSA.

The research tracked claimants between July 2013 and April 2014 in Warrington, Wigan, Oldham and Ashton-Under-Lyne.

Its results suggested those receiving universal credit were more likely than JSA claimants to believe the benefit system was encouraging them to find work, take any job they were able to do and spend more time looking for work.

But Labour said the government – which had originally promised that universal credit would save £1.7bn by cutting errors and fraud – had now cut that target by two thirds.

Shadow work and pensions secretary Rachel Reeves said: “The only person who believes Iain Duncan Smith’s promises on universal credit is Iain Duncan Smith.

“Iain Duncan Smith promised one million people would be claiming universal credit by April 2014. But the latest figures show only 26,940 people on the new benefit. At this rate it will take 1,571 years to roll out universal credit.

“Labour wants universal credit to work and we’ll call in the National Audit Office to do an immediate review of this failing programme to get a grip of the spiralling waste and delays.”

Ministers estimate that, once fully implemented, universal credit will boost the economy by £7bn every year because of an increase in people being in work and reduced benefit expenditure.