17 Sep 2012
UC and U-turns: when to start worrying about Universal Credit
The Department for Work and Pensions (DWP) used to proudly claim Universal Credit (UC) was the biggest change to the welfare state in over 60 years. Attention is now increasingly focused on the department’s ability to deliver a scheme to justify the rhetoric. Are these soaring ambitions beginning to feel more like albatrosses round the neck of ministers?
Labour has been claiming for months that rollout will slip and has now called for the DWP to delay the launch by a year. But Ministers understandably bristle at suggestions they’ve missed a deadline which is still a year into the future.
Officially, UC will launch in October 2013 and DWP always said that the migration to UC would be gradually phased right up until 2017. The intention has been that no new claims for housing benefit would be accepted after April 2014, by which point all new benefit claimants (both in and out of work) will go straight on to Universal Credit.
The question is: will this really be achieved? What does seem likely is that the October 2013 launch will be the softest of soft launches. Expect only the simplest of cases to be allowed onto UC at first.
But personally I’m wary about criticising DWP if implementation is moved to the slow lane. Eight million households will have to migrate to Universal Credit and for many it will be their only income: no one wins if they are are rushed onto an untested welfare regime which cracks under the pressure.
Equally worrying are the continued gaps in policy detail and delays in answering them, such as how to deal with temporary accommodation, free school meals and in-work conditionality. It’s now expected that regulations to nail down the detail of Universal Credit won’t be debated in parliament until December 2012, just four months before the pilots launch.
This is later than planned and suggests that the Social Security Advisory Committee’s report on the draft regulations – recently handed in confidence to the DWP – has made uncomfortable reading for Ministers. Will they accept the amendments necessary to make the safety net fit for purpose?
Another high risk area is the relationship between Universal Credit and reforms to the PAYE tax system. Real Time Information (RTI) will be launched between April and October 2013 and will require employers to report employees’ earnings on a monthly basis. The UC system will lock into the RTI computer and adjust a household’s benefit automatically as earnings change. If RTI doesn’t work, then a major advantage of UC is thrown into doubt. And one major new government IT project built on top of another major government IT project should fill everyone with confidence, right?
Ministers have little tolerance for scepticism. They insist that this is the first government IT project delivered via agile technology, meaning flaws can be exposed and ironed out during development. But the concern is that IT consultants are simply telling Ministers and officials what they want to hear. In response Iain Duncan Smith has announced that he’s now flanked by a “red team” whose job is to doubt everything and question every claim made about delivery.
Shelter has always said we support the introduction of Universal Credit in principle – the current benefits system is fiendishly complicated for many households, particularly when transitioning into paid work.
But Ministers are perhaps now realising why no previous government managed such a radical overhaul of welfare. Delivering Universal Credit in a way that protects low income households is more important than meeting deadlines set down when UC was little more than a wonk’s proposal. A collective moratorium on the term ‘U-turn’ as a political attack would perhaps be helpful in giving DWP the space it needs to get UC right.