Iain Duncan Smith’s flagship Universal Credit programme may not deliver ‘value for money’, the Government spending watchdog has warned today (26 November).
The net value of Universal Credit is now estimated to be £14.5 billion – £1.7 billion lower than three years ago. The figure supposedly accounts for reduced welfare spending and other ‘societal benefits’.
However, the National Audit Office (NAO) said it’s too early to determine whether Universal Credit will deliver ‘value for money’ for taxpayers, “regardless of how it is implemented and the cost of doing so”.
Delays in the implementation of Universal Credit, changes to its delivery service and problems with IT mean additional costs for taxpayers, including £2.8 billion more in staffing costs (NAO estimate) and £130 million wasted on failed IT software.
The DWP is planning to start rolling out new IT software for Universal Credit in just 18 months. However, the NAO said the DWP “does not yet have a contingency plan” if the IT software (delivery service) experiences “delays or fails”. This in turn could result in yet more losses.
According to the NAO, if the new delivery service is delayed by just 6 months the value of Universal Credit “reduces by £2.3 billion due to lost societal benefits”.
Their report also criticised the government for failing to “stabilize senior leadership roles and responsibilities”. Universal Credit has seen seven chiefs in only two years, with the former DWP Work Service Director Neil Couling replacing Howard Shiplee less than two months ago.
Chair of the Public Accounts Committee Margaret Hodge MP (Labour) accused the DWP of “throwing good money after bad”, in botched attempts to fix Universal Credit.
Margaret Hodge said:
“The Department is throwing good money after bad by introducing a short-term fix with no adequate plan for delivery, insufficient skills and unclear milestones to measure progress against.”
Shadow Work and Pensions Secretary Rachel Reeves added:
“The National Audit Office has cast grave doubts over the future of Universal Credit. This shocking report says the benefits of Universal Credit have fallen by £1.7 billion and that value for money, ‘can’t be determined’. It also confirms the roll-out of the new benefit won’t be complete even by 2019 as Iain Duncan Smith has repeatedly promised.
“The National Audit Office report is further evidence that the government’s handling of Universal Credit has been disastrous. It’s neither on time or on budget as the government promised. It’s yet another example of Tory Welfare Waste. Ministers must urgently get a grip of the huge waste and delays to this failing programme.”
Amyas Morse, head of the National Audit Office, said:
“The Department for Work & Pensions has reset Universal Credit on a sounder basis but at significant cost, by extending the time for implementation and choosing a more expensive approach.
“It is now vital that the Department quickly establish clear goals for delivering the programme, in terms of cost, time and functionality, against which it can be held to account.”
Work and Pensions Secretary Iain Duncan Smith defended the botched roll-out, arguing it was “best” to properly test Universal Credit before expanding the programme to more jobcentres.
He added that poor families on Universal Credit would “get more money”. They “go into work quicker, they stay in work long and families will benefit enormously”.
Source – Welfare Weekly, 26 Nov 2014
The way private companies have been running the Work Programme under contractual conditions imposed by Iain Duncan Smith and his Department of Work and Pensions (DWP) has been called a ‘scandal’ by the Public Accounts Committee (PAC).
Despite ‘promises’ to focus in hard-to-help claimants, less than half of the financial resources companies originally pledged to help claimants with disabilities and mental health problems have been spent.
The companies have been concentrating on finding jobs for people considered easier to help in to employment, and have ‘parked’ people with more complex needs who have been placed in the ‘work related activity group’ of the Work Programme by the DWP.
Margaret Hodge, the PAC’s chairman, said: “Evidence shows differential payments have not stopped contractors from focusing on easier-to-help individuals and parking harder-to-help claimants, often those with a range of disabilities including mental health challenges.
“Data from Work Programme providers shows that they…
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Welfare-to-work providers will receive undeserved bonuses of up to £25m even though they have failed to hit government targets for placing people in to long term jobs, official auditors have found.
The National Audit Office has discovered that flaws in work programme contracts meant that the Department for Work and Pensions is obliged to make incentive payments to even the worst performing providers.
In a report released today, auditors also say the success rates of contractors has fallen. Around nine in every 10 claimants of employment and support allowance, who include many people with illnesses and disabilities, are failing to maintain a job.
The report is the latest damning assessment of Iain Duncan Smith’s £2.8 billion programme which has been beset with problems since its inception in 2011.
The amount paid out in bonuses from the public purse is likely to be around £31 million in 2014-15, whereas a measure of performance more dependent on results would have triggered payments of just £6 million, according to the report.
“Flawed contractual performance measures mean the department will have to make incentive payments to even the worst performing contractors,” the report said.
Auditors said that the way the contracts were drawn up also made it more expensive to sack under-performing providers. When the Department for Work and Pensions decided it wanted to drop the Newcastle College Group, it was unable to argue it had breached its contract by failing to meet minimum performance levels and instead had to use a voluntary break clause to negotiate the termination costs.
Despite claims by ministers that the work programme would be an improvement on previous schemes, auditors found that the actual performance levels were very similar.
Performance for the harder-to-help groups was also below expectations with only 11% of claimants of employment and support allowance (ESA) – paid to those with disability or long-term illness – finding work compared to a forecast of 22%, according to the report. The contractors’ own estimates showed they were now planning to spend 54% less on the harder-to-help groups than they were when they originally submitted their bids, auditors said.
Margaret Hodge, the chair of the public accounts committee which oversees the work of the NAO, expressed anger at the failure of the DWP to help those who needed it the most.
“The work programme is absolutely critical to getting people, especially some of the most vulnerable in society, into work and helping to keep them there in the longer term,” she said.
Unusually, the report was not signed off by the DWP prior to publication on the grounds that it did not reflect its view of “the relevant facts”.
The department said that no incentive payments had been made so far, and that any future payments would be included in ongoing contract negotiations.
“The work programme is helping more people than any previous employment programme and has already helped half a million people start a job and 300,000 into lasting work,” a DWP spokesman said.
The Employment Related Services Association (ERSA), representing work programme providers, insisted the scheme was working well.
“It’s quite an achievement that performance is the same level as predecessor programmes despite there being less cash in the scheme,” said ERSA chief executive Kirsty McHugh.
This article was written by Rajeev Syal, for theguardian.com on Wednesday 2nd July 2014
Source – Welfare News Service, 02 July 2014
Councils should be punished if their schemes to improve the behaviour of ‘troubled families‘ flop, MPs say..
Their report calls for “sanctions” against councils that fail to change the lives of people with social problems ranging from poverty to low skills and bad housing.
It follows criticism that fewer than 100 people across the region have found work through the scheme, launched after the 2011 summer riots.
Latest figures show councils in the North-East and North Yorkshire have started work with more than 5,000 families identified as “troubled” – up to three-quarters of the total.
But only 1,697 successes have been chalked up, including in County Durham (312), Darlington (37), Middlesbrough (126), Stockton-on-Tees (173) and North Yorkshire (238).
And the figures also show that only 93 people in those 1,697 families – just 5.5 per cent – have found permanent work.
Not a single person has found a job in Darlington or Hartlepool and very small numbers in Middlesbrough (6), Sunderland (3) and County Durham (14).
Now the Commons public accounts committee (PAC) has warned the scheme, announced by David Cameron himself, is on course to “miss its targets”.
And a parallel project, run by the Department for Work and Pensions (DWP), has put only four per cent of the expected number of people into jobs.
Margaret Hodge, the PAC’s Labour chairwoman, condemned the “baffling decision” to run two separate programmes, leading to “confusion and unnecessary duplication”.
And she said: “There have been big variations in performance, which put achieving the programmes’ objectives at risk.
“The departments must ensure that performance in each local authority, and by each contractor, is scrutinised, giving appropriate support where appropriate – but also imposing sanctions where necessary.”
The PAC report did not identify any worst offenders and its call for councils to face sanctions – for a Government scheme – is likely to be controversial.
Families are classed as ‘troubled’ if members are judged to have at least five characteristics from a seven-strong list.
- no work, poor quality housing, no qualifications, mental health problems, long-standing disability, low income and in ability to afford food or clothing.
Councils are paid up to £4,000 for each family they help. At the start, 80 per cent – or £3,200 – was paid upfront, reducing to 40 per cent in 2014-15.
Ministers have insisted the scheme is “on track” to meet the prime minister’s pledge to transform the lives of 120,000 problem families by 2015.
> Ministers have insisted the scheme is “on track” to meet the prime minister’s pledge to transform the lives of 120,000 problem families by 2015 – to be fair, this government is transforming the lives of millions of people.
Only problem is, we were kind of hoping it’d be a transformation for the better, not the worse.
Source – Northern Echo, 04 April 2014
This article was written by Jane Dudman and Rowena Mason, for The Guardian on Friday 14th March 2014
Iain Duncan Smith’s Department for Work and Pensions is facing “meltdown” over three of its biggest projects, Margaret Hodge, chairman of the Commons public spending watchdog, has said.
Ahead of a damning report on government contracts with private firms, Hodge singled out the DWP as a department particularly struggling with the delivery of welfare changes, which involve managing a relationship with private IT contractors, back-to-work providers and benefit assessors.
The public accounts committee report turns up the pressure on ministers to allow all government contracts to be subject to freedom of information (FOI) laws and examined by the National Audit Office (NAO).
Given that half of all spending on public services now ends up in the hands of private providers, departments must stop hiding behind “commercial confidentiality” when people want to know more about how these contracts work, it said.
The committee said two examples of contracts that the public deserved to know more about were the scandal of G4S and Serco charging for the electronic tagging of offenders who were in prison or dead, and the “complete hash” that G4S made of supplying security guards for the Olympics.
Following a stretch of negative publicity, the major outsourcing companies – G4S, Serco, Atos and Capita – are now willing to be subject to FOI laws when it comes to public sector contracts, but the government is still resisting, it said.
“Time and again when we see failures … it’s a failure of government to manage contracts,” Hodge said, adding that departments “simply have to up their game and get a grip”.
The committee said the DWP is particularly bad when it comes to private firms’ involvement in public services, including Universal Credit, its new IT system that will deliver an overhaul of benefits, the Work Programme, its back-to-work scheme, and the personal independence payment (PIP), the replacement for disability living allowance.
“All their programmes are on the verge of meltdown,” she said at a briefing to launch the report.
On Monday, a leaked internal review from the DWP said the government’s ambitious welfare strategy is at risk because of the speed and depth of the cuts imposed on the department, while a recent NAO report said the new PIP payment will cost almost three and a half times more to administer than the existing scheme.
Hodge said it was deeply ironic that if the DWP had been more open about the Universal Credit scheme – which she said was a “good policy” – there would have been a far better chance of the programme being implemented. Instead, she said, it was being “appallingly handled”.
> the Universal Credit scheme – which she said was a “good policy” – Is this a hint that a future Labour government intend to keep right on with UC regardless ?
A spokesman for DWP said the department has a “track record of delivery”. “We’ve already successfully launched the benefit cap, Universal Credit and the new personal independence payment. The industry tells us that the work programme has got almost 500,000 of the hardest to help into jobs. We are bringing in our reforms safely and responsibly,” he said.
John Cridland, director-general of the CBI, a business lobby group, said the report notes that the the private sector “plays an increasingly important role in running public services”.
“The public has a right to know how its money is being spent and the industry has pledged to meet a higher bar on transparency,” he said. “Businesses running public services agree that open-book contracting should become the norm. The National Audit Office should also be able to audit government contracts as long as this is done in a systematic way with the triggers for inspection, like missed performance targets, agreed from the outset.
“Rather than relying on individual Freedom of Information requests, we think FOI should be built into contracts when they are agreed.”
Source – Welfare News Service, 14 March 2014
Government cuts to welfare benefits, rising living costs and stagnating wages are to blame for a ‘huge increase in the numbers of people with council tax arrears’, a leading charity has warned.
According to figures released today (13 March 2014) by the charity Stepchange, 45,561 people approached the charity for help and advice after falling into arrears with council tax payments in the last year, up 77 percent on the previous years total of 25,000. The average council tax debt was £102, the charity claims.
Stepchange says that the figures ‘highlights how the squeeze on household budgets is leaving more people struggling to pay essential living costs’.
StepChange Debt Charity chief executive Mike O’Connor said:
“More and more people are struggling to pay essential household costs. Stagnating incomes, changing work patterns, rising living costs and changes in welfare benefits are a toxic combination. Government, business and charities need to ensure that safety nets and protections are in place to ensure that short-term financial problems do not escalate into problem debt which can blight the lives of individuals, families and whole communities.”
The figures come almost a year after the coalition government scrapped council tax benefit as part of widespread welfare reforms and replaced it with a locally administered Council Tax Reduction support scheme.
Under the new system, many more low-income families – including some in receipt of state benefits – are now expected to contribute toward their council tax bill, the exact amount of which is decided by their local council authority.
Margaret Hodge MP (Labour), Chair of the Public Accounts Committee (PAC), has recently described the change to council tax support as “fundamentally perverse”, after it was revealed that 71 percent of councils were requiring households to make at least a small council tax contribution, regardless of whether they can afford to pay or not.
The PAC also found that some households, now expected to contribute toward council tax as a result of government welfare cuts, were losing as much as 93 pence out of every £1 earned, when combined with a cut in housing benefit and increased income tax and national insurance contributions.
Margaret Hodge said:
“This just goes to show, for some, work simply doesn’t pay under the new scheme. For them, work incentives have actually weakened rather than strengthened – the opposite of what the Government intended.
“Some of those 225,000 people stand to lose 97p for every extra £1 earned – a fundamentally perverse result.”
Stepchange surveyed 845 helpline clients and found that 50 percent had council tax arrears at some point over the past year, while 19 percent claimed that they had been threatened with bailiff action by their local council.
The Charity has also warned that changes to bailiff fees, due to be introduced in April 2014, could see an additional £310 added to a households accumulated council tax arrears every single time a bailiff pays a visit to a person’s home.
Stepchange has urged councils to do more to help people who fall into arrears on their council tax and ‘ensure that vulnerable people do not see their debts inflated through the unnecessary use of bailiffs’
Source – Welfare News Service, 13 March 2014
“The new personal independence payment, which will replace the disability living allowance, will cost almost three and a half times more to administer and take double the amount of time to process”.
Says it all really, doesn’t it ? I can’t help thinking that when they talked about benefit “reform”, they really meant “deform”.
Reposted from Guardian Society
Sick and disabled people trying to claim a new benefit introduced by Iain Duncan Smith are facing “distress and financial difficulties” because of mismanagement by civil servants and the outsourcing firms Atos andCapita, a spending watchdog has found.
The National Audit Office discovered that the new personal independence payment, which will replace the disability living allowance, will cost almost three and a half times more to administer and take double the amount of time to process.
It has released a report into the new benefit as the government’s £500m contract with Atos comes under increasing scrutiny. Disability minister Mike Penning described the contract with the benefits testing firm Atos as a “mess”. Atos says that it wants to pull out of the contract early…
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