Universal Credit branded a ‘staggering’ £700m failure

Welfare secretary Iain Duncan Smith’s Universal Credit scheme should have seen seven million people moved on to a system which phases out benefits as their pay packets increase.

But instead, four years after it was first announced, just 0.3 per cent of those eligible for the scheme have been moved over.

A damning report by the Public Accounts Committee has highlighted a worrying inability to meet benefit targets at the Department for Work and Pensions.

MPs noted that the DWP had justified spending such large amounts of money on the promise of higher employment in future, but they said they could not judge the value for money of the scheme at this stage as there was not enough evidence the credit, which replaces six means-tested benefits, is working.

Margaret Hodge, who chairs the committee, said little progress had been achieved on the front line, although the 18,000 figure from October is thought to have risen now to close to 30,000. She said: “We hope the Department’s expectation that this number will rise significantly by February 2016 proves to be accurate.”

Last night Leeds MP Rachel Reeves, Labour’s shadow welfare minister, said it was ‘staggering’ that so little had been achieved with a policy the Conservatives had spent years defending.

The MP said: “It’s astonishing that David Cameron’s government has spent £700m on Universal Credit, yet fewer than 30,000 people are claiming it.

“The huge waste and delays to this failing programme means so far it has cost a staggering £26,000 for each person on Universal Credit.

“Labour wants Universal Credit to work and we’ll call in the National Audit Office to do an immediate review of this failing programme to get a grip of the spiralling waste and delays.”

The committee’s report added concerns that a new IT system brought in to administer the credit had proved to be “complicated and expensive” even though it is not yet fully up and running.

“The Department must set out clearly what it has really gained from its spending so far, including from the piloting of the programme, and from the investment in live service IT systems,” MPs on the committee said.

A DWP spokesman said: “Universal Credit is on track and we are making good progress - almost 64,000 people have made a claim and this time next year UC will be in every jobcentre in the country.

“Latest evidence shows it’s already transforming lives with Universal Credit claimants moving into work faster and earning more.

“Using existing IT ensures value for money and will save the taxpayer over £2bn.”

Unison general secretary Dave Prentis said: “So far Universal Credit has cost the taxpayer a good deal of money, without a great deal to show for it all.”