Universal Credit will reach under ten per cent of its intended recipients by the next election

Severe delays to Universal Credit (UC) mean that less than half a million people are set to receive the benefit in 2015/16 – less than ten per cent of the 4.5m recipients originally forecast to receive it by the Office for Budget Responsibility (OBR) in March this year – the TUC warns ahead of the Secretary of State for Work and Pensions’ appearance at a Select Committee later today (Monday).

Figures published by the Office for Budget Responsibility alongside last week’s  Autumn Statement show that there will be virtually no UC recipients in the next financial year (2014/15), down from a forecast of 1.5m just last March.

By 2015/16 the number of UC recipients will be just 400,000 – less than 10 per cent of the OBR’s estimate of 4.5m million in March 2013.

However, the TUC believes that the new timetable for UC, which the Office for Budget Responsibility points out has “yet to be subjected to full business case approval”, could be delayed even further. If Universal Credit is ever finally rolled out it is likely to be years overdue and massively over-budget, warns the TUC.

The TUC is also concerned that the current design of Universal Credit will penalise disabled workers and that if it is introduced, the new system will fail its key test of making work pay for everyone.

Partners of people already in work, mortgage holders and those with high childcare costs could find they are worse off on UC than under previous systems because of the design of the new benefit.

The TUC is concerned that unless UC is reformed, many people will be no better off in work. The government should use the extra time it now has to implement UC to redesign it so that it benefits all low-paid families and makes work pay for all recipients without exception, says the TUC.

TUC General Secretary Frances O’Grady said: “Universal Credit has already wasted million of pounds worth of taxpayers’ money and caused real anxiety amongst those who will supposedly be affected by it, even though it could still be years away from implementation.

“But it is not just the rollout of Universal Credit that has gone horribly wrong. The benefit has fundamental design flaws which mean that many low-paid workers will be no better off in work.

“So far Iain Duncan Smith has ignored mounting criticism of Universal Credit and tried to blame civil servants for his mess. It is now time for the Work and Pensions Secretary to face up to the shambles he is presiding over and re-think his plans.

“The popular headlines on welfare will soon fade away once hard-working people find that they are effectively worse off in work under Universal Credit, and delayed welfare payments to hard-pressed families leave them relying on foodbanks and loan sharks to get by.”

The TUC warning comes as Secretary of State for Work and Pensions Iain Duncan Smith MP is questioned by the Work and Pensions Select Committee on Monday afternoon (4.30pm). He will be joined by Lord Freud, Minister for Welfare Reform, Howard Shiplee CBE, Universal Credit Director General and Mike Driver, Finance Director General.

The TUC recently published research pointing out several reforms to make Universal Credit work for low-paid families. The recommendations included:

• Introducing a second earner disregard to ensure that non-earning members of a couple have the same work incentives as the main earner.
• Increasing support for childcare from 70 to at least 80 per cent of the actual costs, thereby going some way towards reducing the barriers to employment for parents.
• Recognising the real costs of disability by ensuring that levels of support for adults and children with disabilities are not lower than those provided under the current system.
• Drawing up an exceptions policy that is informed by evidence to ensure that the needs of those who cannot manage online applications, joint claims, monthly payments or direct payments are accommodated.
• Ensuring that robust independent systems are put in place to monitor and review decisions to sanction.

NOTES TO EDITORS:

- The TUC report Will Universal Credit Work? is available at http://www.tuc.org.uk/sites/default/files/tucfiles/TUCcpag-report.pdf

- The OBR’s assessment of the business case for UC can be found on page 134 of its economic and fiscal outlook here http://cdn.budgetresponsibility.independent.gov.uk/Economic-and-fiscal-outlook-December-2013.pdf. The numbers that have informed the graphs are provided in its supplementary charts and tables, chart C4A.

- The TUC’s campaign plan can be downloaded from www.tuc.org.uk/campaignplan

- All TUC press releases can be found at www.tuc.org.uk

- Follow the TUC on Twitter: @tucnews

Contacts:

Media enquiries:
Rob Holdsworth    M: 07921 236972     E: rholdsworth@tuc.org.uk