Saturday, January 03, 2015

Universal Credit: is it the theory or the practice that is bothering Rachel Reeves?

Featured on Liberal Democrat VoiceAccording to the Daily Telegraph, Iain Duncan-Smith is intending to accelerate the rollout of Universal Credit to thwart Rachel Reeves and her intention to pause its implementation.

This is odd, because Ms Reeves said that in June, after the Major Projects Authority and the Public Accounts Committee has noted their concerns with the project. They were probably right to, if the concern was simply over the cost of the project and the likelihood of the IT infrastructure working. However, it isn't clear to me whether or not a pause would lead to scrapping the project or not.

Universal Credit, not necessarily coming to a town near you soon...
Universal Credit, in conceptual terms, seems like a bit of a no-brainer. Bringing together the application processes of a number of benefits and rolling them into one would reduce the cost of bureaucracy and, perhaps ironically, making it more likely that some vulnerable people would receive benefits to which they were entitled but had not actually claimed, put off by the hassle of form filling and assessment. And, in theory, there is nothing that should prevent the creation of an IT system that would support it.

In practice, however, government is bad at big IT projects, poor on procurement, prone to mid-project interference and weak on deciding what it actually wants in the first place.

And so it has come to pass with Universal Credit. Ironically, one of the underpinning changes, the introduction by HM Revenue & Customs of Real Time Information for PAYE, seems to have gone quite smoothly, exposing the uncomfortable fact that any system requiring the analysis and processing of data is only as good as the data fed in. And some employers, it turns out, aren't very good at that.

Nonetheless, the Universal Credit programme has been delayed significantly, leading to a perceived loss of confidence that it will work.

But what is one to do? Scrapping the project takes you back to the drawing board, whereby you still need to find ways of cutting the cost of social security. And, if cutting the cost of administration is made more difficult, that means an increased likelihood that benefits themselves will need to be cut - not an attractive option for politicians who claim to want to protect the poor and the vulnerable.

So, Ms Reeves faces a dilemma. Does she continue to harbour public doubts about the viability of Universal Credit, does she openly support the concept, or does she oppose both process and concept? And time is ticking...


Rob Parsons said...

In theory UC is a great idea. But practicality matters. The idea has been around for a very long time, and there is a reason why it has not been implemented before. It is immensely, dreadfully complex. As it stands, I doubt very much that this implementation will bear fruit in the end, after it has been subject to Iain Duncan Smith's unique brand of incompetence. Whatever he says, he will not be able to get UC to the point where it is unstitchable by May: it is too much of a mess. I fear that he will actually try and will pour even more misery on those who can least afford it when the system unravels.

Also, I do not see that it is fair to look on the benefit system in isolation. You take as given that we have to find ways to reduce social security. Rather than reducing the amounts already paid to poor people, we could more fairly and more productively look at other options. If all the tax due were actually paid, for instance, there would be no problem. We have also been supporting a chancellor whose strategy is to help companies pay as low wages as possible. If companies paid a living wage instead of increasing unearned bonuses to executives and shareholders, the tax credit bill would shrink out of sight.

Mark Valladares said...


I agree with you on that, and have a scheduled post addressing some of that.

And yes, looking at the benefit system in isolation is unhelpful, although that depends on whether or not you want to combine the two systems (tax and social security) into one - assuming that you think it is practical or viable.

I do disagree on the question of who is to blame for the issue of low paid workers. I might suggest that, if you know that the government will support your workers through tax credits, why not allow them to do so.

Tax credits effectively subsidise low paying employers, and it wasn't George Osborne who introduced them.

Dean said...

We, in Bedford, will have universal credit from March 2015. Although only for single people looking for work.. it is being introduced slowly. I fully support the aims of monthly payments, real time info which will reduce overpayments , a nightmare under the tax credit and housing benefit systems we currently have, less administration re claiming benefits i.e one department instead of the current four that claimants have to contact and more disregards on income when people start working meaning claimants see 35p for every £1 earned rather than the 5p that they benefit via part time work.. I also agree it does not address the reason why people have to claim benefit especially to supplement a working wage. We need to reduce the welfare bill by creating jobs that pay wages that families can live on meaning that they do not have to apply for top ups. Child care cost policies need to be developed to help with this, and the welfare system there for the most vulnerable in society who need our support due to the fact that they cannot work or struggle to get into work due to their health or disability. But have support and regular help to review their own opportunities and not just left for years claiming benefit without anyone caring.

Mark Valladares said...


Thank you for your comment. I agree with you that we need to consider the level of support we give to individuals claiming benefit - by increasing the minimum wage at a rate above inflation and taking a holistic view of their particular issues, so as to target the right help, at the right time.

If we really believe in opportunity for all, we have to give people a ladder to give them, and their dependents, a real chance.

Once again, thank you for your comment.