Welfare Reform Costs £700m For 'Little Progress'

The Government's flagship welfare reform has come under fire from MPs again for making "very little progress".

Despite spending £700m on Universal Credit since it began five years ago fewer than 18,000 people were claiming the credit, which replaces six means-tested benefits.

Seven million people are to be able to claim in the long term.

MPs on the Public Accounts Committee said the Department for Work and Pensions needed to set out clearly what it has gained from spending so far.

They found £344m had been spent on a "live" online system for claimants but that it could not deal with more complex cases, such as people on six benefits. Only £34m worth of the system can be used in a new system.

The department is now developing another system but running both is expensive, say MPs and the DWP is six months behind in its digital development.

Labour MP Margaret Hodge, who chairs the committee, said: "We hope the Department's expectation that this number will rise significantly by February 2016 proves to be accurate.

"As the Department has justified this spending on the promise of benefits in the future - such as from higher employment - rather than on the actual delivery of benefits to date, we simply cannot judge the value for money of this expenditure at this stage."

Unison general secretary Dave Prentis said: "So far Universal Credit has cost the taxpayer a good deal of money, without a great deal to show for it all.

"Encouraging more people to apply for help online will no doubt help save money in future, but while digital applications might suit many people, official figures show that four million people are either unable to use technology or who feel uncomfortable doing so.”

A DWP spokesman said: "Universal Credit is on track and we are making good progress - almost 64,000 people have made a claim and this time next year UC will be in every jobcentre in the country."

Rachel Reeves, Shadow Work and Pensions Secretary, said: "The huge waste and delays to this failing programme means so far it has cost a staggering £26,000 for each person on Universal Credit."