“To govern”, Polly Toynbee writes, “is also to deliver”. For anyone looking for further evidence of governmental incapacity and incompetence, Universal Credit is the gift that goes on giving. A new report from the National Audit Office focuses in the main on the problems facing new claimants, but on the way it points to a series of other issues. The most immediate problems are
- The effect of the 5-week delay before first payment. 57% of claimants seek advance payments, which means that their benefit is subsequently reduced to repay the advance; a further 22% delay claiming and incur debts as a result. So, taken together, 80% of claimants face financial difficulties because the benefit is not designed to provide help when it is needed.
- ‘Fraud and error’ – a figure which lumps together a load of different problems – is running at 10.5% of payments, almost a record for benefit payments. Most of this, the NAO reports, is down to fraud by claimants; we’re not told what type of fraud, but if so, UC is even more untypical of other benefits than it seemed to be at first.
- The cost of implementing the benefit is increasing: the current estimate is £4.6 billion.
It’s worth reflecting on the last of these. The Full Business Case for UC had claimed that UC would yield £24.5 bn in people choosing to work more, £10.5 bn in distributional improvements, whatever they are, and £9.1 billion in reduced fraud and error. The ‘distributional benefits’ are unclear: UC has imposed a terrible cost on the people it has failed to serve, with most claimants suffering financial hardship and (despite some moderation) a ridiculously large number having benefits stopped in the name of discipline – nearly 90% of all sanctions in 2019 were imposed as a penalty for missing appointments. The last figure is obviously wrong, and in the wrong direction. For the first, if there was ever any basis for the DWP’s claim that 200,000 more people would move into work – there probably isn’t – £4.6 billion would cost £23,000 for every one of these. For the same price, the government could have created rather more than 200,000 useful jobs.