Too much, too fast: the government’s ‘welfare revolution’ starts to unwind

Poor results for universal credit, work programme and youth contract

Labour employment plans

Liam Byrne the shadow work and pensions secretary said: ‘The welfare revolution we were promised has fallen apart.’ Photograph: Lewis Whyld/PA Wire/Press Association Images

Buried beneath the news of Prince George’s arrival on Monday was an announcement from the Department for Work and Pensions that staff working for the private IT firm Atos, delivering the controversial fitness-for-work assessments, were all to be retrained, owing to “unacceptably poor” standards of work.

Similarly, long awaited statistics showed Nick Clegg’s £1bn youth contract scheme had helped little more than 2,000 people find long-term work. The numbers covered the first year of what was planned to be a three year scheme. It was dismissed by the shadow work and pensions secretary Liam Byrne as a scheme with a 95% failure rate.

These were bleak indications that all was not well within two of the government’s previously much trumpeted welfare reform programmes – drowned amid royal baby hysteria. It was a significant moment for a department that is rapidly getting used to making uncomfortable admissions.

Over the past few months, the DWP has had to make disappointing announcements in at least four significant policy areas: as well as the work capability assessment announcement and the youth contract figures, the department has indicated that the timetable for implementation of its main benefits reform, universal credit, is slipping back, and has released results from the much-hyped work programme that are best described as mixed.

The DWP has been successful in making the political argument for welfare changes, and polls continue to show support for cuts to benefits across all parties. A poll by Lord Ashcroft suggested that 86% of Unite members support the government’s £26,000 benefit cap – but it has repeatedly stumbled on the implementation side.

Whitehall analysts wonder if the department has bitten off more than it can chew by announcing and attempting to implement a range of ambitious new policies, affecting vast numbers of people, in one term.

Officials have come under huge strain as they struggle to push forward with reform, at a time when the departmental headcount has been cut radically. The Institute for Fiscal Studies calculated recently that between 2011 and 2016 the department will have lost 40% of its workforce. The Public and Commercial Services union said the DWP had cut 20,000 jobs since May 2010.

Labour has been struggling to marry its fervent belief that social security is a cornerstone of social democracy with a public increasingly intolerant of “benefit culture”. Its spokesmen attack specific reforms, but cannot say if they will be repealed.

Labour’s own tough proposals for welfare, such as the requirement to work after two years on the dole, are either not known or little understood. Its best hope may lie in the claim Tory welfare is not working. Incompetence rather than ideology becomes the battleground.

Shadow work and pensions secretary Liam Byrne is moving in that direction. He said: “The welfare revolution we were promised has fallen apart. The work programme doesn’t work, universal credit is disappearing into the sunset, and now we know that the youth contract has been a disaster and Atos is spinning out of control. Iain Duncan Smith has presided over the worst delivery failure seen in any government department for years.”

Several policy analysts agree that part of the problem lies with the department’s determination to introduce several major reforms simultaneously, focusing on getting them running, and less on how well they work once they have been launched.

Tom Gash, research director at the Institute for Government, which last week published a report questioning the government’s skills at outsourcing and commissioning private companies to take on complex and risky government contracts, said: “The government’s capacity to manage these programmes is not yet up there with their ambition.”

Dave Simmonds, chief executive for the employment thinktank Inclusion, said: “Politicians are running too hard, pushing diminishing numbers of civil servants.”

Anne Begg, Labour MP and chair of the work and pensions select committee, which scrutinises the work of the DWP, said: “Any one of these major reforms would be a big reform for a department to undertake in a parliamentary cycle and they have five on at once, including pension reform. The volumes of people affected are huge. It would be a miracle if everything worked instantly.Citizens Advice says the scale of reform has made this a difficult period for claimants. “Delivering complex reforms can lead to big problems, as shown by the fact that last year Citizens Advice Bureaus dealt with almost half a million problems with employment and support allowance, 54% higher than the previous year,” the charity’s chief executive, Gillian Guy, said, referring to the new incapacity benefit, granted to those who pass Atos-administered fitness for work tests. “Nine out of ten of our clients that we spoke to in a recent study said they are not ready for universal credit.”

The DWP said: “There is no doubt that this department is pursuing and delivering an aggressive reform agenda. We’ve already successfully launched the benefit cap, universal credit and the new personal independence payment, and the work programme has got over 320,000 of the hardest to help into jobs. We’re bringing in our reforms safely and responsibly, and our ability to deliver these changes cannot be questioned following our well proven track record for delivery.”

The key areas of difficulty for the department are currently the work programme, universal credit, the youth contract and the employment and support allowance tests.

Universal credit

Something has gone wrong with universal credit, the centrepiece of the welfare revolution. It may well be rectifiable and in October 2017 everyone on benefit in and out of work will be on universal credit, as Duncan Smith had always planned and insists will still happen.

But with the changes to the speed with which universal credit will be introduced, and to the kind of caseload that will be put into the system, it is difficult to be confident.

Aware of the potential political damage, ministers are often unclear in public about the source of delay, repeatedly offering reassurance, insisting they had always planned to road-test ideas, and denying they were ever wedded to an artificial timetable set out in 2011.

The potential for disaster is evident. Universal credit merges six different benefits together and the claimant receives a single monthly household payment. It requires different payments to landlords, more online claims, and merges in- and out-of-work benefits, requiring a new benefit condition regime for those in work. It also requires close co-operation between the DWP systems and tax officials at HMRC.

The first steps have been baby steps. Universal credit went live on 29 April with just one jobcentre – Ashton under Lyne – accepting clams for universal credit and three other jobcentres, Wigan, Warrington and Oldham, testing the system before taking claims for universal credit in July. It had been intended that all four jobcentres would go live in April.

The aim was to start with the most simple caseload, such as a single unemployed claimant, to see how universal credit changes the claimant’s behaviour and how the IT systems work.

It had been intended that from October that all new claimants receiving out of work benefits would move to universal credit, but earlier this month Duncan Smith told the work and pensions select committee that the credit would be introduced for new claimants in just six additional “hub jobcentres” – Hammersmith, Rugby, Inverness, Harrogate, Bath and Shotton, alongside the existing four “pathfinders”.

 

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