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19 February 2014

Is Cameron now afraid to mention Universal Credit?

The PM's piece on welfare reform makes no reference to Iain Duncan Smith's troubled programme.

By George Eaton

Aside from his false claim that the number of workless families doubled under Labour (which I’ve fisked here), the most notable thing about David Cameron’s piece on welfare reform in today’s Telegraph is what he doesn’t mention: Universal Credit. The programme, which aims to replace six of the main benefits and tax credits with a single payment, has long been touted as the means by which the coalition will transform the benefits system and “make work pay”, but Cameron doesn’t even reference it in passing in his article. 

Given the chaos surrounding the scheme, that’s perhaps not surprising. 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. As recently as March 2013, it was forecast that 1.7 million people would be claiming Universal Credit by 2015 but as the OBR table below shows, that figure has now been rounded down to zero. According to the DWP, there were just 3,200 people on the benefit at the end of November, 996,800 short of Duncan Smith’s original April 2014 target of one million, with only the simplest cases (such as single people claiming Jobseeker’s Allowance) taken on. As Labour MP Glenda Jackson noted at a recent work and pensions select committee hearing, “The people you are actually testing are a small number, the simplest of cases. How an earth are you going to achieve the evidence that you keep telling us you are going to learn from when the cohort is so narrow and so simple?”

By 2015-16, the OBR expects 400,000 people to be claiming Universal Credit, less than 10 per cent of the original target of 4.5 million. Nearly three million (2.9 million) are forecast to be on the system by 2017 but the OBR warns that “given the delays to date, and the scale of migration required in 2016 and 2017, there is clearly a risk that the eventual profile differs significantly from this new assumption”. It notes that the government’s new migration timetable “has yet to be subjected to full business case approval”. 

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So great are the obstacles now faced by Universal Credit that many in Whitehall believe it will be put out of its misery after May 2015. As today’s FT reports, officials believe that it “must start delivering results by the next election or risk being drastically scaled back or even abandoned”. 

Back in May 2010, many on the right claimed that Universal Credit would become one of the government’s success stories and a defining part of Cameron’s legacy. But nearly four years later, the PM can’t even bring himself to mention it.