MPs call for Treasury to suspend Universal Credit funding until business case approved

SUMMARY:

The government’s flagship welfare reform programme, Universal Credit, was given a damning review by a select Committee last week.

Opposition MPs have called for the Treasury to suspend funding for the government’s flagship welfare reform programme, Universal Credit, following a damning report by the Work and Pensions Committee, which found that after more than eight years in development a business case has still not been approved.

The report explained that the programme – which is intended to unify a number of out-of-work benefits into one seamless system – has been receiving funding from the Treasury on an ad-hoc basis.

Universal Credit has been plagued by delays and technical problems. In 2013 the programme was brought in-house during a ‘reset’, after it was found that suppliers had been paid handsomely for “ultimately pointless design”.

The Committee’s report stated that the programme had now been brought “back from the brink”, but pointed to the lack of business case, verification issues and the need for increased automation as ongoing problems.

Major programmes follow a three-stage process for securing business case approval. The first, the strategic outline business case (SOBC), was approved after some delay in September 2014. The programme had also reached this stage in 2011, before returning to square one with the reset in 2013. The second, the July 2015 outline business case (OBC), was approved in November 2015, informed by the positive October 2015 PAR. This secured funding for the programme until the end of 2017.

The third stage, the full business case (FBC), has not yet been submitted.

Upon release of the report, chair of the Committee Frank Field MP, said:

Perhaps the most damning point that emerges from any assessment of the Government’s progress on Universal Credit is that in the eighth year of the programme, the Department itself has yet to produce the full business case for its own mega reform.

The programme managers appear to expect us, the public, and the Minister responsible to take it on faith that UC will deliver the much improved employment outcomes they claim for the vast range of people – disabled, single parents, carers, the self-employed – who will claim UC. At the moment they are relying on the simplest cases – single, unemployed claimants with no children. They have produced no evidence to back up the key, central economic assumption of the biggest reform to our welfare system in 50 years.

Where’s the business case?

Field and his fellow MP, and Shadow Work and Pensions Minister, Jack Dromey, took to the House of Commons following the release of the report to question Minister for Employment, Alok Sharma, about its findings.

Specifically, Field called for the Treasury to suspend funding for Universal Credit until the final business case had been approved. He said:

First, this huge project—huge in Government finance and huge in what it might do to our constituents—is based on no business case at all. I am therefore pleased to see my friend the hon. Member for Salisbury (John Glen), who is now the Economic Secretary to the Treasury, sitting on the Treasury Bench. I ask through you, Mr Speaker, that he does not approve further development of universal credit until the Treasury has received the business case from his colleague the Minister for Employment, the hon. Member for Reading West (Alok Sharma).

Secondly, the project assessment reviews talk about the industrialisation of claims. This is the roll-out of a benefit that is, to put it at its kindest, hit and miss. The problems that our constituents could face are beyond imagination, and the cost to taxpayers will be enormous.

The Minister for Employment responded by saying:

I will of course consider the report, and my hon. Friend the Economic Secretary to the Treasury has indicated that we will work closely together on reviewing its content.

Field insisted that the government has no up-to-date data on if Universal Credit helps people move from benefits into work and made further calls for the Treasury “not to sanction further cash” until the Department for Work and Pensions has produced a business case.

Fellow Labour MP and Shadow Minister, Jack Dromey, concurred and added his concerns about the impact on constituents:

Universal credit was designed to smooth the transition into work and to help lift people out of poverty. Does my right hon. Friend share my concern that, more than seven years after universal credit was first announced, and after repeated resets and delays, it is clear that the Government still cannot provide evidence for their key claim that people claiming universal credit will be more likely to find employment?

I mean not just single unemployed people without children, before cuts to work allowances, who appear in the statistics that the Government cite, but the full range of people—single parents, the self-employed, carers and disabled people—who are now claiming universal credit as the full service is rolled out.

My take

Rather unbelievable that a government project can be ‘reset’, have wasted millions of pounds of taxpayers’ money, still not have a business case, and yet be deemed a success by the Department for Work and Pensions. As Frank Field MP noted during the debate, “I would love to say that it was IT-focused, but it is neither that nor person-focused”.

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