Policy in Practice responds to the NAO report on Universal Credit out today with four constructive suggestions that the DWP can implement immediately to improve Universal Credit so it delivers more value for money for taxpayers and claimants.

The National Audit Office today launched a new and highly critical report on Universal Credit:

the National Audit Office (NAO) concludes that Universal Credit has not delivered value for money and it is uncertain that it ever will.

The report, which Policy in Practice contributed to, looks back at some of the challenges faced by the programme over the last two years. The DWP have strongly rebutted the reports findings, and argued that the report is backward looking and fails to take fully into account the impact of recent changes to Universal Credit that improve the claimant experience.

Policy in Practice agrees with the NAO that Universal Credit rollout should continue

The NAO make some unfair criticisms alongside its otherwise very balanced analysis. For example:

The Department for Work and Pensions (the Department) will never be able to measure whether it has achieved its stated goal of increasing employment.

While there is no gold standard research showing the employment impact of Universal Credit, the evidence that we do have appears to show that Universal Credit is having a positive impact on employment. Currently unpublished analysis by Policy in Practice for the Local Government Association indicates that there is a small positive employment effect from Universal Credit. We believe this is something that should be applauded, and the NAO statement is misleading.

Other criticisms are hard to argue with from a value for money perspective, with £817m spent on the no redundant ‘live’ system, which never looked like it was the right choice. The NAO’s core strength in tracking financials brings these and other concerns to light.

Universal Credit may also cost more to administer than the previous system of benefits it replaces, with current running costs at £699 per claim, against an ambition of £173 per claim by 2024-25

The cost per claim reported by the NAO is high, and our experience of Universal Credit in action shows obvious ‘quick wins’ that could bring administration and support costs down for the department. The DWP should set a cost per claim benchmark and meet other KPIs before Universal Credit is rolled out to long term benefit claimants in 2019.

Other criticisms in the report look back at some of the challenges that made (bad) headlines, particularly around the six-week wait and payment timeliness, and a lack of support particularly for vulnerable claimants. These deserve to be taken seriously, as every delay in a Universal Credit payment can push someone into crisis.

Policy in Practice campaigned for changes ahead of the budget, and comprehensive package of measures, including same day advance payments, additional payments for renters as they transition onto Universal Credit, ending waiting days and direct payments to landlords were announced by the department in last years budget. These measures seem to be having the desired effect of helping claimants as they transition onto Universal Credit.

The National Audit office concludes that Universal Credit rollout is set to continue.

the NAO believes there is no practical alternative but to continue with Universal Credit.

Four practical steps the DWP can take today to improve Universal Credit

There is room to improve, and we suggest four practical actions the DWP can take immediately with Universal Credit to improve value for money, and ensure taxpayers and claimants see a better service.

  1. Work with third parties: Frontline advisors and organisations want to make Universal Credit work for the people they support. They are a national network of benefit experts that can help people make and manage a claim, if the DWP let them. 
  2. Be flexible: The DWP guidance allows for flexibility from work coaches, and we have seen great examples of this, but it needs to be more consistently applied on the frontline. We have seen advance payments being made more readily available, similar flexibility around third party deductions, backdating of claims, reporting childcare costs or self-employed earnings, and allowing time for claim management within the claimant commitment would speed up payments. 
  3. Properly resource support: The support available to claimants with especially high needs to be properly resourced. People need more than digital and budgeting support, they may need help with literacy, or debt, or addiction and support organisations should have the flexibility to provide this support. For advisors, accelerated training programmes and a better resourced Universal Credit telephone service will prevent extended waits for advice and ensure claimants receive good quality advice and support first time.
  4. Be open and transparent: DWP needs to improve systems in order to easily show the progress that is being made to deliver a better service, and identify what support interventions are working. Councils are using their own resources to target and track the effectiveness of their support and Policy in Practice believe these systems should apply nationally to improve the delivery of the programme and track its progress. 

These constructive suggestions come directly from our work with ‘leading lights’ local organisations. Evidence from frontline staff within local organisations presented to DWP by Policy in Practice suggests greater listening and engagement with advocates, and allowing for implicit consent is the single biggest thing that could make a difference, particularly for the most vulnerable claimants.

Through its work with frontline staff in local organisations, Policy in Practice has seen that while Universal Credit still has challenges, there have been continual improvements in the claimant experience of Universal Credit Full Service. In recent visits to frontline organisations, claimants told us they liked managing their benefits with a single agency, had a better relationship with their work coach and reported positively on being able to manage their claim online. Heather, an employment advisor for Pluss, liked that she was able to tell people confidently that they would be better off in work.

This recent encouraging evidence indicates that Universal Credit’s original intention to make the welfare system simpler and to be to be more effective at supporting people towards independence, remains achievable.

In response to the NAO press release, Deven Ghelani, Director of Policy in Practice said:

“Universal Credit is ultimately a better system for people than the one it replaces. However, Ministers need to stick to the core principles, ensuring it is simple to claim and continue to invest in work incentives in order to achieve its goals.”

Deven Ghelani is responding to media requests, please contact Policy in Practice to get in touch with him directly.

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