Universal Credit UK costs rise by over £1bn as full roll-out of benefit delayed

The rising costs of implementing a full roll-out of Universal Credit have been uncovered in a new report.

It also confirms the latest date on which everyone is expected to have been transferred to the new welfare scheme.

And since Minister of Work and Pensions Therese Coffey excludes universal credit from being replaced by universal basic income, the government is clearly pursuing its plans to fully implement the new benefit system.

A report from the National Audit Office in Universal Credit confirms the Department of Work and Pensions timeline for the rollout of Universal Credit.

It says the department has extended the program to 2024-25.

When the move to Universal Credit was first announced by Iain Duncan Smith in 2010, it was planned to be fully rolled out in 2017.

The DWP subsequently revised this and expected that all applicants for the benefits replacing Universal Credit would be transferred by March 2023. This was then delayed until December 2023.

In July 2019, the final rollout date was extended again, this time to September 2024, after new projections showed that plaintiffs about legacy benefits “switched to universal credit more slowly than expected.”

As a result, costs for the implementation of Universal Credit had risen from £ 3.2 billion to £ 4.6 billion, accountants said.

These additional universal credit costs are largely because it will cost an additional £ 834 million to complete the migration process ‘Move to Universal Credit’ over a longer period of time.

In addition, the predicted cost of running Universal Credit simultaneously with the legacy benefits during the implementation period has increased by £ 570 million through 2024-25.

This is mainly because more applicants are expected to stay in the legacy systems longer, so there will be less savings if these old benefits are phased out during this period.

These financial projections were made in March 2020, just before the corona virus crisis hit the UK.

The National Audit Office report adds, “The department expects to reschedule these costs and the timetable once it better understands the full impact of Covid-19 on the job market and universal credit.”

Universal Credit replaces six existing benefits.

These are:

  • Child tax credit
  • Rent allowance
  • Income support
  • income-related jobseeker’s allowance (JSA)
  • income-related benefit for employment and support (ESA)
  • Work tax credit

People with these ‘legacy benefits’ switch to Universal Credit if their circumstances change – such as moving, losing their job or having a baby.

All others with those benefits are forced to switch even if their circumstances remain the same. This is called managed migration. A pilot project has been started in Harrogate to try this out.