Universal Credit: Duncan Smith's master plan is grinding to a halt

The new welfare system will now be piloted in just one area, rather than four, next month.

When a government department sneaks out a press release the night before the start of the Easter weekend, it's a sure sign that it's trying to bury bad news. The news, in this instance, is that Universal Credit, Iain Duncan Smith's master plan to reform welfare, has all but ground to a halt. After previously planning to trial the scheme - which will replace six of the main benefits with a single payment - in four areas this April, the Department for Work and Pensions announced that it now would do so in just one. A single jobcentre, Ashton-under-Lyne, will accept claims for Universal Credit from 29 April, with the other three pilot areas, Wigan, Warrington and Oldham, not doing so until July. The national rollout is finally due to begin in October but ministers have yet to say when existing claimants will be moved over.

This transparent attempt to narrow the scope for failure is unsurprising. In recent months it has become almost impossible to find anyone in Whitehall who believes Universal Credit will work. This is principally due to the fantastically complex computer system on which the reform depends. In theory, benefit payments will be automatically adjusted as earnings vary, ensuring that claimants are always better off in employment than out of work. But that relies on real-time data transfers between HM Revenue and Customs and the Department for Work and Pensions, a system that few place their faith in. Earlier this year, ministers were forced to admit that it was failing 25 per cent of the time in private testing. With Universal Credit payments based on incomplete or incorrect salary information, the danger is that claimants will not receive the benefits they are entitled to.

Shadow work and pensions secretary Liam Byrne said: "The truth is the IT for Universal Credit appears to be nowhere near ready.  Universal Credit calculations depend on salary data from HMRC's new PAYE Real Time Information system.  Obligations for small firms to provide PAYE data on or before each employee payment have recently been delayed from April until October.  And DWP are so worried they are now barring access to their five main contractors.

“This scheme is now on the edge of disaster. ministers must admit this project is in crisis and start to fix it now – before millions of families tax credits are put at risk."

It was concerns over Universal Credit that prompted David Cameron to try and move Duncan Smith during last year's cabinet reshuffle. A replacement, it was hoped, might be more amenable to changes. But the Work and Pensions Secretary would not budge. Having devoted years in opposition and in government to the programme, he had no intention of being absent at the birth. Reluctantly, then, Cameron allowed him to remain in place. But with the government's reputation, as well that of Duncan Smith's, now staked on the reforms, he may yet come to regret his pusillanimity.

Work and Pensions Secretary Iain Duncan Smith outside Number 10 Downing Street. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty Images
Show Hide image

The buck doesn't stop with Grant Shapps - and probably shouldn't stop with Lord Feldman, either

The question of "who knew what, and when?" shouldn't stop with the Conservative peer.

If Grant Shapps’ enforced resignation as a minister was intended to draw a line under the Mark Clarke affair, it has had the reverse effect. Attention is now shifting to Lord Feldman, who was joint chair during Shapps’  tenure at the top of CCHQ.  It is not just the allegations of sexual harrassment, bullying, and extortion against Mark Clarke, but the question of who knew what, and when.

Although Shapps’ resignation letter says that “the buck” stops with him, his allies are privately furious at his de facto sacking, and they are pointing the finger at Feldman. They point out that not only was Feldman the senior partner on paper, but when the rewards for the unexpected election victory were handed out, it was Feldman who was held up as the key man, while Shapps was given what they see as a relatively lowly position in the Department for International Development.  Yet Feldman is still in post while Shapps was effectively forced out by David Cameron. Once again, says one, “the PM’s mates are protected, the rest of us shafted”.

As Simon Walters reports in this morning’s Mail on Sunday, the focus is turning onto Feldman, while Paul Goodman, the editor of the influential grassroots website ConservativeHome has piled further pressure on the peer by calling for him to go.

But even Feldman’s resignation is unlikely to be the end of the matter. Although the scope of the allegations against Clarke were unknown to many, questions about his behaviour were widespread, and fears about the conduct of elections in the party’s youth wing are also longstanding. Shortly after the 2010 election, Conservative student activists told me they’d cheered when Sadiq Khan defeated Clarke in Tooting, while a group of Conservative staffers were said to be part of the “Six per cent club” – they wanted a swing big enough for a Tory majority, but too small for Clarke to win his seat. The viciousness of Conservative Future’s internal elections is sufficiently well-known, meanwhile, to be a repeated refrain among defenders of the notoriously opaque democratic process in Labour Students, with supporters of a one member one vote system asked if they would risk elections as vicious as those in their Tory equivalent.

Just as it seems unlikely that Feldman remained ignorant of allegations against Clarke if Shapps knew, it feels untenable to argue that Clarke’s defeat could be cheered by both student Conservatives and Tory staffers and the unpleasantness of the party’s internal election sufficiently well-known by its opponents, without coming across the desk of Conservative politicians above even the chair of CCHQ’s paygrade.

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.