Universal Credit was supposed, through some process I can’t claim to understand, to reduce fraud and error in the benefit system. According to the Business Case, there were supposed to be reduced overpayments worth £14 billion over twelve years, or £1.16 billion per annum. I commented in 2012, and again last December, that I found this claim implausible: Universal Credit doesn’t do anything about most of the circumstances which lead to fraud and error, but it does add layers of complexity to make confusion and mistakes more likely. Now we have the first figures from the DWP on fraud and error in Universal Credit. Universal Credit was overpaid by 7.3%, compared to 5.0% of JSA (the nearest comparable benefit) and 5.2% of Housing Benefit. It was underpaid by 2.6%, while JSA was underpaid by 0.8%. The system makes more mistakes in both directions. The DWP points to the complexity of managing some claims – but that, of course, is the point.
The DWP summary pleads that the difference between UC and JSA is ‘not statistically significant”, and that in any case UC and JSA are not directly equivalent. True enough, but Universal Credit was supposed to cut fraud and error by somewhere between a third and a half of all overpayments. If UC was supposed to save a third but is actually costing nearly fifty per cent more, the level of fraud and error is running at more than double what was expected. If it was supposed to save half, it’s three times what it should be.