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Coffee House

Welfare failures that are costing us dear

21 August 2013

9:20 PM

21 August 2013

9:20 PM

I’m told there’s a joke that does the round in Whitehall, that to err is human, but if you really want to foul things up you need Iain Duncan Smith. I’m afraid a casual glance at DWP’s delivery record explains why.

On every single one of DWP’s five big reforms things are going badly wrong. The human cost of this colossal bodge job is impossible to calculate. But the fiscal cost could be as high as £1.4 billion.

Let’s start with reform of disability benefits. A vital reform that needs tremendous care. The test itself needs fast and fundamental reform (my speech on the subject is here). But the government’s contractor, Atos is running rings around the Government. Anyone taking the test is eight times more likely to end up in a tribunal than in a job. Those spiralling tribunal costs are set to cost an extra £287 million over the course of this Parliament.

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Then there’s the flagship Work Programme, which has missed every single one of its minimum performance targets. It’s so bad that George Osborne told the Commons it was under-performing. If its targets had been met, spending on benefits would have been £119 million lower over the past two years. Nick Clegg’s pet project, the Youth Contract, is even worse: it is now on course to miss its target by more than 92 per cent, at a cost of nearly half a billion pounds in 2014-15.

Then we have housing benefit reform. Eric Pickles warned in 2011, that ideas like the bedroom tax could cost more than they save. It looks like he was right. The Bedroom Tax is a mixture of needless cruelty and incompetence. 96 per cent of those hit simply have nowhere else to move to, and are facing the prospect of arrears, high rents from private landlords, and homelessness. We have already seen an extra £102.5 million earmarked for its implementation. And DWP’s fraud and error programme is also in trouble, with the department writing off £73 million in Housing Benefit overpayments this year, an increase of 9% on the year.

The final delivery risk is the greatest of them all. Universal Credit. In November 2011, we were told 1 million people would be on the system by next year. Now, Iain Duncan Smith can’t even tell us how many people he expects to be on the scheme by the election. In April we saw the fourth head of the project appointed in just six months. The Major Projects Authority has flagged this as ‘Amber/Red’, meaning delivery is in doubt. Yesterday, the nice special advisors did their best to stand up for their boss dismissing the Universal Credit figures as wrong. Well, we know that Mr Duncan Smith has always said the cost of the system would be £2 billion. Absolutely no more. On 1 November 2012, Mark Hoban explained how that money would all be spent between 2011 and 2015. Then we had the Spending Review announcing that actually another £300 million would be needed in 2015-16. So that makes £2.3 billion surely? What on earth is going on?

What people in Britain want is a new social security system that preserves the best of our ideals, fosters personal responsibility, brings down unemployment and gets the right help to the right people, especially disabled people and those who’ve paid in heaps, like the hard pressed over 50s. That’s why we need ‘welfare reform’ because business as usual isn’t delivering this. Just cutting help – like tax credits or the DLA budget – isn’t welfare reform, it’s just cuts. Any government can just ‘cut’. Real reform – system change – is far harder.

I don’t think it’s a coincidence that as delivery of reform has collapsed, the Tories have resorted to abuse. The Tory party likes to call Labour, ‘the welfare party’. Only the nasty party could turn a word that means ‘health’ or ‘prosperity’ into a term of abuse. The reality is that they’re now the ‘failed on welfare reform’ party. And no amount of bluster is going to hide it.

Liam Byrne is Labour’s Shadow Work and Pensions Secretary.

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