Duncan Smith rejects claims of Universal Credit's 'glacial pace'

Image source, Getty Images

Iain Duncan Smith told MPs Universal Credit would bring £35bn in economic benefits to the UK - as Labour attacked the "glacial pace" of its roll out.

The benefit, which combines six working-age benefits into a single payment, is being extended so parents able to claim it for the first time.

But Labour's Rachel Reeves said it may not even be fully brought in by 2020.

Mr Duncan Smith, Work and Pensions Secretary, said it was right to have a "careful, controlled" introduction.

The Universal Credit system merges income-based jobseeker's allowance, income-related employment and support allowance, income support, child tax credit, working tax credit and housing benefit into a single payment in a far-reaching change designed to encourage work and reduce fraud.

Increased childcare support

Initially it was available only to single people and couples - but it is being extended, with parents able to claim it for the first time.

The change will initially apply to parents in parts of north west England.

But the reform has been hit by delays and the National Audit Office previously said it was poor value for money.


Image source, PA

BBC social affairs correspondent Mark Easton

Universal Credit has been hailed by the government as a revolution in welfare provision, bringing together six existing benefits, including jobseeker's allowance and housing benefit.

But the scheme has been beset by problems - tens of millions of pounds have been written off due to technical problems and only 20,000 people are currently claiming it, rather than the one million initially envisaged by ministers.

Those who are already receiving it have been mainly single people with no housing costs, but from today parents in a small part of the north west of England will be able to apply.

If they're eligible, they'll be able to get much more extensive help with child care costs than under existing benefit rules.

The expansion to more complex cases will be a key test of Universal Credit's robustness, and it's IT system in particular.

The National Audit Office, which said in a report last year that Universal Credit was not achieving value for money, is due to deliver another assessment on Wednesday.

Mr Duncan Smith defended his "careful, controlled expansion" of Universal Credit adding that it was "the right approach, avoiding some of the big bang failures that have dogged programmes in the past".

He said the majority of Universal Credit recipients agreed that it was "easier to understand, easier to claim and provides a better financial incentive to work".

"Universal Credit will generate up to an additional 300,000 people in work once fully rolled out," he said. "Three million households are set to gain by £177 on average and 500,000 working families will receive more help with childcare - 100,000 of those in part time jobs benefitting for the first time.

"With the rate of childcare support increased from 70% to 85% of costs, parents can receive up to £646 for one child and £1,108 for two or more children."

'Welfare waste'

Statistics up to November this year suggest that 40,000 people have made a claim for Universal Credit, while over 20,000 have completed the process, he said.

But Ms Reeves - Labour's shadow work and pensions secretary - claimed Universal Credit had already "eaten through £0.5bn".

"Universal Credit is rolling out at a glacial pace and it's just another example of Tory welfare waste," she said.

She said Mr Duncan Smith had already admitted "that the delivery of this policy now won't be completed until the end of the decade - if then".

Claiming his timetable had "repeatedly slipped", she taunted: "In November 2011 you said you'd have one million people on Universal Credit by 2014 - the truth turned out to be 1% of that figure.

"By May 2015, the government told us they would have 1.7m people on Universal Credit but your latest target is for just 100,000 people to be on the system by that date."


Earlier, Mr Duncan Smith was also tackled on the speed of roll-out on BBC Radio 4's Today programme, and responded by saying: "Would you rather us take a gamble and throw everything at it at once? Have a problem like tax credits where nobody got their money and was a real disaster?"

"Or would you rather have it as the independent Major Projects Authority said to us as they reviewed it in the last few months? They said: 'This is the right way to roll out a programme so that it de-risks the roll out and ensures that the people who need this money... get the money....' That's the important thing surely?"

Universal Credit is already available to single and couple claimants in over 80 Jobcentres in England, Wales and Scotland and will be available in nearly 100 Jobcentres by Christmas, the Department of Work and Pensions (DWP) said.

The DWP originally promised to have one million people on Universal Credit by April 2014, but the project has been delayed a number of times since its creation and MPs have criticised the way it has been managed.

Matthew Reed, chief executive of The Children's Society, said changes were needed to the new system, which will affect seven million children - half of all children in the UK - to ensure "work really does pay".

"Support with childcare costs must be made upfront, rather than reimbursed, so this system truly benefits the families that need it most," he said.