Iain Duncan Smith arrives in Downing Street to attend a weekly cabinet meeting on April 8, 2014. Photograph: Getty Images.
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Universal Credit business case still not approved by the Treasury

Ministers' claims contradicted as civil service head says "we shouldn't beat about the bush: it hasn't been signed off".

If ministers' public statements are to be believed, all is well with Universal Credit. But another indication that that's far from the case has emerged today. Asked during an appearance before the public accounts committee whether the business case for Iain Duncan Smith's masterplan had been approved by the Treasury, Bob Kerslake, the head of the civil service, replied:

We shouldn't beat about the bush: it hasn't been signed off.

That contradicts the answer given by employment minister Esther McVey, who told Rachel Reeves last week: "The Chief Secretary to the Treasury has approved the UC Strategic Outline Business Case plans for the remainder of this Parliament (2014-15) as per the ministerial announcement (5 December 2013, Official Report, column 65WS)."

The failure of the Treasury to sign off Universal Credit is further evidence of George Osborne's doubts over the financial viability of the project. To date, the DWP has written off £40.1m of assets developed for the programme and expects to write down a further £91m by March 2018, prompting the National Audit Office to warn that it has has "not achieved value for money". 

This waste has come in spite of, not because of, the number of people using the new system. According to the DWP, there were just 5,610 claiming the benefit at the end of March, 994,390 short of the government's original target of one million. So great are the obstacles now faced by the programme that many in Whitehall believe it will be put out of its misery after May 2015. While both the Tories and Labour remain committed to Universal Credit in principle, the Treasury's forestalling is the strongest evidence yet that it may not survive under either. 

Update: Here's the DWP's response: "Universal Credit is on track to roll out safely and securely against the plan set out last year - the new service now available in 24 Jobcentres, and last week expanded to claims from couples.

"The Treasury has been fully engaged in the roll out plan and have approved all funding to date."

George Eaton is political editor of the New Statesman.

Photo: Getty Images
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Autumn Statement 2015: whatever you hear, don't forget - there is an alternative

The goverment's programme of cuts is a choice, not a certainty, says Jolyon Maugham.

Later today you will hear George Osborne say there is no alternative to his plan to slash a further £20bn from lean public services by 2020-21. He will also say that there is no alternative to £9bn cuts to tax credits, cuts that will hit the poorest hardest, cuts of thousands of pounds per annum to the incomes of millions of households.

But there is.

As I outlined here the Conservatives plan future tax cuts which benefit, disproportionately or exclusively, the wealthy. Suspending those future tax cuts for the wealthy would say, by 2020-21, £9.3bn per annum.

I also explained here that a mere 50 of our 1,156 tax reliefs cost us over £100bn per annum. We don't know how much the other 1,106 reliefs cost us - because Government doesn't monitor them. And we don't know what public benefit they deliver - because Government doesn't check.

What we do know, as I explained here, is that they disproportionately and regressively benefit the wealthy: an average of £190,400 per annum for the wealthiest.

And we know, too, that they include (amongst the more than 1,000 uncosted reliefs) the £1bn plus “Rights for Shares Scheme” - badged by the Chancellor as for workers but identified by a leading law firm as designed for the wealthiest.

Simply by asking a question that the Chancellor chooses to ignore - do these 1,156 reliefs deliver value for money - it is entirely possible that £10bn or more extra in taxes could be collected without any loss of  public benefit

To this £19bn, we might add the indiscriminate provision - both direct and indirect - of public money to wealthy pensioners.

Those above basic state pension age enjoy a tax subsidy of up to 12% on earned income.

Moreover, this Office for National Statistics data (see Table 18) reveals that the 10% of wealthiest retired households - some 714,000 households - have gross pre-tax and pre-benefit private income of on average £43,983. Yet still they enjoy average cash benefits from government of £11,500 per annum.

Means testing benefits to exclude that top 10 per cent of retired households would save £8.2bn per annum. And why, you might wonder aloud, should means testing be thought by the government appropriate for the working age population, yet a heresy for retired households?

Add in abolition of that unprincipled tax subsidy and you'll save even more. 

So there are alternatives. Clear alternatives. Good alternatives. Alternatives that enable those with the broadest shoulders to bear some share of the pain. Don't allow yourself to be persuaded otherwise.

Jolyon Maugham is a barrister who advised Ed Miliband on tax policy. He blogs at Waiting for Tax, and writes for the NS on tax and legal issues.