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The National Audit Office have delivered a new report that criticises Universal Credit.Universal Credit has taken significantly longer to roll-out than intended, may cost more than the benefits system it replaces, and the Department for Work and Pensions (the Department) will never be able to measure whether it has achieved its stated goal of increasing employment.In today’s report, the National Audit Office (NAO) concludes that Universal Credit has not delivered value for money and it is uncertain that it ever will.
Since the NAO last reported on Universal Credit in 2014, the Department has made some progress in managing the programme but has itself admitted that it cannot measure whether Universal Credit will lead to its economic aim of getting an additional 200,000 people into work.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 roll-out has been considerably slower than was initially intended. It was due to complete in October 2017, but after a number of problems, eight years later only around 10% of the final expected caseload are currently claiming Universal Credit.
The Department’s research states that satisfaction among claimants of Universal Credit and those claiming benefits under the previous system is generally comparable to what it replaces. However, in a recent survey by the Department, four in ten of claimants who were surveyed stated that they were experiencing financial difficulties. The Department does not accept that Universal Credit has caused hardship among claimants but the NAO has seen evidence from local and national bodies that many people have suffered difficulties and hardship during the roll out of the full service.
The NAO states the Department has not shown sufficient sensitivity towards some claimants and that it does not know how many claimants are having problems with the programme or have suffered hardship.
In 2017, around one quarter (113,000) of new claims were not paid in full on time. Late payments were delayed on average by four weeks, but from January to October 2017, 40% of those affected by late payments waited in total around 11 weeks or more, and 20% waited almost five months. Despite improvements in payment timeliness, in March 2018 21% of new claimants did not receive their full entitlement on time with 13% receiving no payment on time.
The Department does not anticipate payment timeliness to improve significantly in 2018. On this basis, the NAO estimates that between 270,000 and 338,000 new claimants will not be paid in full at the end of their first assessment period throughout 2018. Those with more complex cases are more likely to be paid late. The Department believes it will never achieve 100% payment timeliness because it needs by law to verify the claimants’ eligibility.
The Department expected most claimants would have enough money to cope over the initial waiting period after their claim is submitted (previously six weeks, now five). In reality, nearly 60% of new claimants (around 56,000 a month) receive a Universal Credit advance to help them manage before receiving their first payment.
Increases in rent arrears since the introduction of Universal Credit in an area, which claimants can often take up to a year to repay, have been reported by local authorities, housing associations and landlords. Some private landlords told the NAO they have become reluctant to rent to Universal Credit claimants.In three of the four areas the NAO visited and for which data was available, the use of foodbanks increased more rapidly after Universal Credit full service was rolled out to the area. This agrees with the Trussell Trust’s report showing upsurges of 30% in foodbank use in the six months after Universal Credit rolls out to an area, compared to 12% in non-Universal Credit areas.
Local organisations which support claimants and assist in the administration of the benefit have reported incurring additional costs. The Department says it has told local authorities it will pay them for additional costs associated with administering Universal Credit if they provide evidence of the expenses, but it places the burden of proof on the local authorities, uses its discretion on assessing claims and has not sought to systematically collect data on wider costs. It will therefore have no means to assess the full monetary impact that Universal Credit is having.
The programme has necessitated a number of changes which have become increasingly embedded across the Department. It would be so complex and costly to return to legacy benefits at this stage that the NAO believes there is no practical alternative but to continue with Universal Credit.
The Department must now ensure that the programme does not expand before business-as-usual operations can deal with higher claimant volumes, and must learn from the experiences of claimants and third parties, as well as the insights it has gained from the roll-out so far.
The NAO recommends that the Department should capture intelligence on claimants’ issues and the opinions of delivery partners and external stakeholders in a systematic way.
Amyas Morse, head of the National Audit Office, said today:
“The Department has kept pushing the Universal Credit rollout forward through a series of problems. We recognise both its determination and commitment, and that there is really no practical choice but to keep on keeping on with the rollout.
“We don’t think DWP has shown the same commitment to listening and responding to the hardship faced by claimants. Maybe a change of mind set will follow the publication of the claimant survey on 8 June. We think the larger claims for Universal Credit, such as boosted employment, are unlikely to be demonstrable at any point in future. Nor for that matter will value for money.”SEE ALSO - RLA visits Widnes JobcentreUP NEXT - The true impact of Universal Credit DON'T MISS - Universal Credit-A TOTAL DISGRACENOW WATCH:
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Addition:Back in May 2017, Property Tribes member and UC expert Bill Irvine wrote to the Head of the DWP expressing his concerns:Dear Mr Couling, DWP's Director General
Responding to the National Audit Office’s report today on the roll out of Universal Credit, David Smith, Policy Director for the Residential Landlords Association, commented:“Whilst it is clear that Universal Credit is here to stay, today’s report recognises the difficulties faced by tenants and landlords as a result of rent arrears. The RLA’s most recent research found that 38 per cent of landlords have experienced universal credit tenants going into rent arrears over the previous 12 months.“The RLA has previously called for a pause to the roll of Universal Credit, and it would seem prudent to do so as the Department undertakes its promised work to understand the impact of the policy on rent arrears.“In the meantime, we welcome continued positive discussions with the Government and will continue to push for pragmatic changes to secure further improvements for tenants and landlords building on the changes announced in the autumn budget last year.”
I was chatting to one of my agents today and his head is battered in with UC
Its a bloody nightmare
Another good reason to invest in other asset classes
any landlord can fall into the UC mess if a customer loses a job
when we have such hurdle's
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
A benefit claimant who faced debt, rent arrears and potential eviction as a result of policy design flaws in universal credit, has tragically committed suicide.
The tenant apparently fell into depression, owed in part to the universal credit rules that require claimants to wait at least six weeks for a first benefit payment meaning many are going without basic living essentials, due to a lack of money.Full/source article
You'll laugh at this. Independent Case Examiner ICE are the people u go to who if UC have failed in all their complaints & not resolved 'em.
U can only got to ICE if UC Stage 2 complaints say Here is your final response. And ICE need your final complaint letter. Well what do we do if UC han't even replied?I went to ICE approx. 2 weeks ago & said Stage 1 & 2 han't even replied.
This is about UC paying claimant a further two months after I reported arrears.You'll laugh even more, when I reported arrears, I sent it to someone very high up in UC complaints who even forwarded the arrears form to his staff & said Deal with this. They still paid tenant. So if they don't listen to their man WAY ABOVE THEM, what hope is there for us mere mortal Landlords?Anyway, ICE said What they not even replied? ICE now said write to Neil Couling & this other Director of services & they will sort this out.Neil Couling han't even replied approx 8 days later.
You couldn't make this up, could u.
Government must not “bury its head in the sand” over Universal Credit failure, IPSE warns
The Government must urgently reconsider the rollout of Universal Credit (UC) and heed the growing warnings about the damage the policy has caused, IPSE (the Association of Independent Professionals and the Self-Employed) has said.
The call follows an intervention by the National Audit Office (NAO), who highlighted a series of inaccuracies made in an address by Esther McVey, Secretary of State for Work and Pensions.
Jordan Marshall, IPSE’s Policy Development Manager, commented: “It’s extremely concerning that the Government continues to assert that Universal Credit (UC) has been a success. This is despite the National Audit Office (NAO) and many other independent bodies clearly warning otherwise.
“The Government’s claim that the policy is being rolled out too slowly runs directly against the NAO’s recent calls for a ‘pause’ in the policy. The NAO report clearly highlighted the ballooning costs of the scheme, as well as the “difficulties and hardship” individuals are experiencing as UC is rolled out.
“Nowhere is its damaging impact felt more clearly than among the self-employed. The report reiterated that the self-employed ‘lose out due to monthly reporting’. This is a huge problem as it does not take into account the fact that the income of the self-employed varies hugely from month to month. This means a self-employed person can end up £3,000 worse off each year under UC compared with an employee earning the same amount.
“Why, for example, should a farmer, who sells or produces crops only at a particular time of year, be penalised? The Government must address the problem of monthly reporting by considering self-employed earnings over a more reflective annual basis.
“The warnings of not just the NAO but many other independent bodies must be heeded. The Government cannot bury its head in the sand about Universal Credit’s failures any longer. It must urgently rectify the problems rather than pretending they do not exist.”
As an emergency response Govt should immediately announce that as of next week the FULL contractual rent will be deducted from any UC amount FIRST and paid directly to the LL and the HB element to be discounted.
If the LL doesn't want direct payment then they may apply to have it paid to the tenant.
There should be NO 'clawback' facility from the LL.
Any 'clawback' to be only taken from the tenant if there are issues with the UC claim.
If after having the FULL contractual rent paid there is insufficient UC income to live on then that is just TOUGH!!
IT is a lot easier to cope with things if you are not homeless.
Having UC rent paid directly to the LL will at least prevent tenants spending the rent money on other things. Councils and Govt could assist by providing food vouchers to be used for food only.
Councils have enough problems as it is without dealing with a load of newly homeless tenants caused by those tenants not passing the UC rent onto the LL.
This emergency situation doesn't need to remain.
But if a tenant CHOOSES to leave the direct payment of the FULL contractual rent paid first DIRECTLY to the LL without any 'clawback' facility then that should be permitted.
No special reasons would need to be given.
If the tenant wants direct payment then they should be allowed to insist this occurs.
UC is in crisis and emergency measures need to be taken.
Gradually case by case UC can be fully restored as intended if that is what a tenant wants.
UC is still fundamentally a good idea though for the self-employed I understand there are issues that need to be addressed.
Currently UC is rudderless and is heading for the rocks!
Somebody needs to take control