The Universal Credit fiasco

4635240754_eb76ddc5e5_mWhen the history of this Coalition government is written a substantial chapter will no doubt be devoted to contrasting the vaulting ambitions of IDS’s welfare reform agenda with the incompetence and inhumanity of its implementation. Like some sort of inverted alchemist IDS has the ability to turn golden prospects into practices of base metal.

In his Times column on Friday Philip Collins offered a magisterial overview of welfare reform under the title Beware the march of IDS and his gothic folly. Collins likens Universal Credit (UC) – the centrepiece of IDS’s grand scheme – to the perma-delayed Sagrada Familia in Barcelona.  The completion date for the Church of the Holy Family has now been revised to 2028, having been started in 1883. The intricacies and expense of its construction continue to defeat successive generations. Whether UC will arrive any sooner than 2028 is by no means an idle question.

The proximate cause for this new outbreak of commentary on the manifold deficiencies of IDS and his reform agenda was the publication of the NAO’s second report on the progress of the UC project following the high profile, and unprecedented, project reset in 2013.

The NAO reports on some recent improvements in programme and project management, including alarmingly belated attempts by DWP to set out how the whole system is supposed to work when it is finished. But the overall story is one of weak leadership, lack of clarity over objectives and processes, poor contract and financial management, and bucketloads of money wasted along the way. And the NAO conclude, in the face of all the DWP positive spin on the topic, that given so much remains to be done, and some substantial risks need to be negotiated along the way, that “the Programme is at too early a stage” to determine whether it will deliver value for money.

I have to admit that I am sceptical whether Universal Credit will ever move to full implementation. The odds that a new government will review the programme and conclude that it is unworkable seem just as good as the odds of pressing on with implementation. Let’s hope that when it comes to that point decision makers remember the sage advice from Econ101 that sunk costs are irrelevant to the decision.

But equally importantly all the kerfuffle about the inadequacies of implementation mean that some of the features of the UC scheme itself risk being lost in the murk. When people image the scheme in action the concerns often focus upon the problems a digital by default system will create for vulnerable households, and the almost inevitable problems that will arise with inaccurate payments as a result of a range of actors needing to feed real-time income data in to the system. But that only scratches the surface of the problem.

We know, for example, that alongside the DWP mantra that the scheme is about “making work pay”, early financial modelling indicates that there will be almost as many financial losers as winners. We know that a five week delay before payment is going to cause a lot of households a lot of difficulty. We know that the scheme design embeds IDS’s moralizing about the importance of the two parent families with a male breadwinner.

We know that the scheme pushes behaviour change, benefit conditionality and sanctioning into whole new areas of society. No longer will sanctioning be restricted to those “scroungers” who are out of work and deemed insufficiently assiduous in their efforts to get back to work. It will also be applied to those who are in work but deemed not to be trying hard enough to improve their circumstances through finding higher paid work or taking on second jobs. And the sanctions applied to UC claimants in work could be severe. The impact upon self-employed households, many of whom have incomes that fluctuate very sharply over the short term, could be particularly problematic. Indeed, it’s hard to see how it is going to work for that specific, but expanding, sector of the labour market.

Some social policy academics have noted that UC represents the arrival of “ubiquitous conditionality” and a profound renegotiation of the relationship between the citizen and the state. The state moves beyond any acknowledgement that structural factors can play a role in social disadvantage – suitable modifications to behaviour, usually in the direction of further exertion on the part of the individual, are what is required to cure the relevant ills.

It is not hard to imagine a scenario in which the UC programme limps over the finish line to full implementation only for it then to blow up in the government’s face once the grisly implications of the system’s operation become only too apparent. That has pretty much been the case for those components of welfare reform already implemented.

The first families to be sanctioned because, while working as many hours as available to them, they are deemed to be too slack in their attempt to improve their circumstances could turn into a cause célèbre . It would provide further fuel for the ongoing debate about out of touch politicians lacking empathy with the struggles facing real people.

Image: The CBI via flickr.com under Creative Commons.

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3 replies »

  1. This is a superb review Alex.

    Spoke to an alcoholic last week whose payments had been frozen because it appeared that he had not picked up his meds.. (He had, yet imagine how difficult it is for him to convince the DWP he had. But even that seems beside the point.)

    Is this the New Puritanism?

  2. Thanks both for your comments. Glad to hear you liked it. @Bill – agreed, that’s just the sort of situation that hints at the Kafkaesque nature of the system that’s been created. What’s needed is understanding, what the system expects is moralizing and judgementalism.