A Labour government would call a three-month halt to Universal Credit, the flagship government welfare reform, until a full review had been conducted by the National Audit Office, Rachel Reeves has announced.
The programme, which rolls six benefits or tax credits into a single payment, has been beset by IT and other implementation problems and the timetable for extending it nationally has been revised several times.
From Monday the programme, currently available in just 10 jobcentres, is being expanded across the north west of England and will be covering 90 jobcentres by the end of the year, said the department for work and pensions.
Initially it will continue to take only the simplest claims, from single people, but in some areas it will shortly start tackling more complex applications from couples.
“We are doing this in a careful, safe and controlled manner, limiting the disruption to claimants as we have always said we would,” said the DWP, which added that more than 6,500 people were now claiming UC.
However, Ms Reeves, shadow work and pensions secretary, said even if the latest extension added a further 50,000 to 60,000, the numbers remained remote from the government’s original target of one million claimants by April this year.
“We are incredibly concerned about the IT and delivery of it. This is a £12.8bn project,” she told the Financial Times.
She said the review the party would conduct once in office would lead to “hard-headed decisions about whether Universal Credit can be rescued”.
The NAO would continue to provide quarterly reports on progress under the Labour plan, “so parliament can hold the executive accountable for it,” she said.
She was speaking as she published the conclusions of a committee established by Labour to examine UC, which included local authority and trades union representatives and academic and policy experts.
Ms Reeves said, if the party decided that Universal Credit should go ahead, it would make “major changes to help families and businesses” that would be funded from within the existing budget.
Labour supported the principle of Universal Credit, “but we will not accept the huge waste and delays which have brought the government’s flagship welfare reform programme shuddering to a halt”, she added.
Ms Reeves pledged that all child-related benefits, such as child tax credit, which will now become part of universal credit, would be paid directly to the “main carer”, usually the mother, rather than “the main earner” as the government has prescribed.
The current policy “risks transferring money from ‘purse to wallet’, with significant risks for many women”, warned the Labour committee.
Labour was also looking at the treatment of self-employed people under UC, Ms Reeves added. The committee said that Universal Credit “risks substantially increasing red-tape for the growing number of people who are self-employed, asking them to understand three separate sets of accounting rules in order to comply with government regulation”.
Ms Reeves said Labour would simplify the system of reporting income within Universal Credit for this group of earners.
She also hinted that the party might relax rules that base entitlement on the assumption that all self employed people were working for the equivalent of 35 hours a week at the minimum wage.
“Of course that’s not the case. That’s one area we’d look into,” she added.
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