NAO report says impractical to cease UC rollout but DWP ducks hardship issues

Rolling out Universal Credit (UC) – National Audit Office.

NAO report

More about universal credit
More about universal credit and disability

The report finds that the Department for Work and Pension (DWP) does not have a realistic alternative but to continue with UC. Changes to jobcentres, digital systems and working practices make it both complex and expensive to revert to legacy benefits at this stage but the DWP has failed to ignore flaws which cause hardship within the UC system.

The full impact of universal credit on disabled people is yet to be felt because we still do not have full rollout of UC or migration from legacy benefits. However, in response to yesterday’s court decision concerning the loss of disability premiums following migration to UC, DR UK called for wholesale reform to automatically include both the severe disability premium and enhanced disability premium within universal credit to protect both current and future disabled claimants from hardship.

What the NAO says is working well about UC

• By 12 April 2018 the Department had rolled out its digital system to 258 jobcentres.
• Claimant satisfaction levels were similar to those on legacy benefits.
• NAO observed good relationships between work coaches and claimants.

What the NAO says is not working well about UC

• Many claimants have suffered difficulties and hardship during the rollout of the full service.
• DWP has found it difficult to identify and track those who it deems vulnerable because it does not have systematic means of gathering intelligence from delivery partners.
• DWP does not accept that universal credit has caused hardship among claimants, because it makes advances available, and it said that if claimants take up these opportunities hardship should not occur - though its own survey of full service claimants found that four in ten claimants were experiencing financial difficulties.
• One in five claimants do not receive their full payment on time - approximately 25% (113,000) of all new claims were late in 2017.
• Payment timeliness improved from 55% to 80% over the course of 2017 but the DWP believes 100% payment timeliness is not feasible because the Department depends on claimants supplying information to verify the claim to ensure it makes payments in accordance with the law.

How other organisations have been affected by UC rollout

• Increases in rent arrears for local authorities, housing associations and landlords.
• Increase in the use of foodbanks in at least some areas where universal credit full service has been introduced.
• Greater demand for advisory and advocacy services.

Future prospects for universal credit

• So far, the DWP has provided enough functionality to run a basic system – with heavy reliance on manual and inefficient processes.
• Verify, the government’s online identity verification tool has only been of use to 38% of claimants, compared with its expected 90%.
• The Department intends to improve automation over the next few years, but until then it will need more staff so it can undertake work manually.

Savings under the new system?

The NAO expresses doubt about DWP claims for saving money under the new system and for getting people into work. DWP estimates that UC will lead to 200,000 more people in work, but it will never know this because it cannot isolate the effect of universal credit from other economic factors in increasing employment.

Recommendations

• Improve the tracking and transparency of progress towards universal credit’s intended benefits.
• Formally assess the readiness of automation and digital systems to support increased caseloads before migration begins, and ensure the programme does not expand before business-as-usual operations can cope with higher claimant volumes.
• Work with delivery partners to establish a shared evidence base for how universal credit is working in practice.
• Make it easier for third parties to support claimants, including where there are additional support requirements.