Whitehall accused of lacking grasp over benefits

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Government departments do not fully understand the overall impact of an array of different means-tested benefits on incentives to work, says a cross-party committee of MPs .

The Public Accounts Committee (PAC) said a single body needed to take responsibility for ensuring the £87bn of income-related allowances did not discourage people from working.

There are currently 30 different means-tested benefits handled by nine Whitehall departments and 152 local authorities.

The new Universal Credit is designed to make the welfare system simpler, but the PAC urged that it must take account of other means-tested awards such as council tax benefit.

“It is not clear what effect some means-tested benefits have on claimants’ incentives to work,” the committee said. “Improving incentives to work is a key objective of Universal Credit. At present there is no clear picture of how the entire benefit system affects claimants’ incentives to work.”

It said departments focused their attention on benefits from the Department for Work and Pensions (DWP) and HM Revenue and Customs (HMRC) without looking at the wider impact of benefits such as, for example, free school meals.

“We expect departments to do more to understand what impact multiple benefits have on an individual,” it said.

While the Treasury had overall responsibility for ensuring means-testing was applied consistently, it “does not intend to take the direct lead”, the PAC said.

That responsibility should be allocated to a single department or agency which could be held accountable for the interaction between different benefits, it added.

PAC chair Labour MP Margaret Hodge said: “At present, there are nine central government departments and 152 local authorities administering 30 different means-tested benefits, yet there is no one body responsible for co-ordinating means-testing across government. There needs to be a single body responsible for overseeing the interaction between different benefits, means-tested or not, and ensuring consistency and value for money.”