In a report published yesterday, the Office for Budget Responsibility (OBR) has predicted that Universal Credit (UC) will save the government less than 2% of what it would have spent on benefits if UC had not been introduced.
In its latest welfare trends report the OBR states that UC is expected to save the DWP £1 billion out of the £63.2 billion that the benefits replaced by UC would have cost, by the time the system is fully rolled-out. Even this sum, the OBR say, is just an estimate and the savings could evaporate entirely.
In reality, however, the cuts to benefits are much greater than this. This is because the reduction in the benefits bill is estimated at £10.7 billion, but against that has to be set the additional costs of UC at £9.6 billion.
In other words, huge sums have been taken from the pockets of claimants and paid, at least in part, to outside contractors.
The report warns that low income self-employed claimants will be particularly hard hit by UC. It also points out, ominously, that “work coaches in UC have considerably more discretion in the conditions they can impose on both in-work and out-of-work claimants and in the sanctions that they can impose for failure to meet those conditions.”
In the past we’ve seen the transfers to incapacity benefit and to employment and support allowance utterly fail in their aim of slashing benefits costs, but succeed in harming hundreds of thousands of claimants’ lives.
Right now we are witnessing the same process with the roll out of personal independence payment to disability living allowance claimants.
At the same time it seems clear that an enormous amount of hardship and fear is being caused by yet another failed ‘reform’ to the benefits system in the transfer to UC.
Will successive governments ever learn from their mistakes?
You can download the full OBR Welfare Trends report from this link.
