Welfare reform: proof that you can get away with failure if it's boring and it doesn't affect People Like Us

Don't believe the hype about the rollout of universal credit and how the Tories are finally "making work pay" - Iain Duncan Smith has presided over perhaps the failure of this parliament.

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Whenever I talk about the need for better representation of women and minorities in politics, there is a stock response. “Surely we want ministers appointed on merit?” people ask, making a serious face. And I always think, “So how do you explain Iain Duncan Smith, then?”

IDS is one of the great enigmas of modern politics. In person, he appears quiet, self-contained, borderline pious: stick him in a robe and sandals and he’d make a very good abbot. He has devoted allies who believe in him with quasi-religious zeal.

Yet welfare reform is perhaps the failure of this parliament, which has been allowed to go unnoticed because: a) it doesn’t really affect People Like Us and b) it is protected by a tedium shield three miles thick.

These past weeks, the spin doctors tell us, were devoted to trumpeting the Conservatives’ alleged success in saving the taxpayer sackloads of cash by chastising scroungers and layabouts into honest employment. Tory commentators are in ecstasies. “Like an unstoppable cyborg programmed with bourgeois decency – the Suburbinator – IDS has simply refused to give in,” swooned Matthew d’Ancona in the Guardian on 15 February. “His welfare revolution is potentially the most important achievement of the government,” wrote Peter Oborne in the same day’s Telegraph. (If only we could get all jobseekers to work as hard as the word “potentially” does in that sentence. I am potentially the most acclaimed supermodel of the 21st century. Tony Blair is potentially the man who will bring peace to the Middle East. Don’t all rush to Ladbrokes at once.)

Let’s start with Universal Credit, since that has apparently now been recast as a success. It is actually a failure: a good idea in theory that was horrifically bungled in practice. In 2010 the government quite reasonably acknowledged that navigating a maze of more than 30 benefits was causing huge problems for claimants. But ministers seemed less aware that the complexity would not go away under Universal Credit; it would merely be dealt with by a computer system instead.

There is a reason why “government IT project” rivals “rail replacement bus” as the most chilling three-word phrase in our language. This didn’t bother Duncan Smith and his circle at the Department for Work and Pensions, who were infused with a sense of divine purpose. Throughout the process, the department has made avoidable errors by insisting that all naysayers must be enemies rather than critical friends. In September 2013, a National Audit Office report raised alarms about “a ‘fortress’ mentality within the programme team and a ‘good news’ reporting culture”. The public accounts committee, led by the indomitable Margaret Hodge, reported in November that year that the team was “isolated and defensive” and “gave misleading interviews to the press” indicating that all was well. There were also some sharp questions about how well the £425m invested up to that point had been spent.

The problems are not confined to the distant past. In December, the Office for Budget Responsibility delivered an exquisitely crafted blow, saying, in effect, that it didn’t believe the department’s figures any longer. It cited “the recent history of optimism bias in Universal Credit plans and other projects of this sort”.

That optimism bias was still on show on 15 February as IDS announced the roll-out of Universal Credit. It might happen, although Labour says it will “pause” the programme if elected and George Osborne (who seems never to have rated his colleague’s intelligence or ability) may well find a way to kibosh it out of the spotlight of an election campaign. The Treasury has still not approved the business case for Universal Credit and the rollout has a host of exemptions. You cannot claim it if you own your home or are homeless, for example.

Even if it does finally emerge, Universal Credit seems unlikely to deliver the huge savings needed to slash the welfare bill to the levels demanded by Osborne. It might also have unintended consequences that haven’t been sufficiently offset. For instance, the vaunted ambition of “making work pay” – by stopping the steep reduction in benefits for those working just over 16 hours a week – might encourage claimants to take insecure, irregular part-time work and allow employers to get away with offering it.

Universal Credit is not the government’s only troubled welfare reform. The expanded work capability assessment backfired so badly that the outsourced provider ditched the contract. The Jobseeker’s Allowance (JSA) system has become incredibly punitive. Declan Gaffney in the National Insti­tute Economic Review records that JSA sanctions are running at 6 per cent, the highest on record; among Employment and Support Allowance claimants (who are currently not fit for work), sanctions rose from 2,200 in the first quarter of 2012 to 15,900 in the first quarter of 2014. To gain public support for these measures, the government has relied on myths such as “families where no one has worked for three generations” (of which the Joseph Rowntree Foundation failed to find a single example).

The unpalatable truth is that a high benefits bill stems not from a badly structured welfare system but from a badly structured society. Take housing benefit: accounting for inflation, it has risen 150 per cent in the past 21 years. The answer is not to cut housing benefit but to build more homes.

Welfare reform in this parliament has been about running to stand still, huffing and puffing and achieving very little. As Gaffney notes, “Labour’s spending plans for 2014/15 were for £216.8bn, compared with the current forecast of £215bn.” I bet the Quiet Man won't have much to say about that. 

Helen Lewis is a former deputy editor of the New Statesman, who is now a staff writer on the Atlantic. Her history of feminism, Difficult Women, will be published in February 2020.

This article appears in the 20 February 2015 issue of the New Statesman, Still hanging