The introduction of Universal Credit is the kind of ominishambles that would not have been out of place in an episode of The Thick of It.
Since it was announced six years ago, the rollout has fallen five years behind schedule, and now looks as if it won’t be completed until 2022 – 11 years late. Its administrative costs have spiralled from the original £2.2 billion estimate, to an eye-watering £15.8 billion.
But perhaps most significantly, it has failed in the very things that it was supposed to do – restore fairness, introduce simplicity and create a financial incentive to find and stay in work.
At a glance, merging six main means- tested benefits into a single monthly payment does appear to be a sensible simplification to a complicated system. But it has in fact ended up replacing one burden of benefit bureaucracy based on payment, with another around determining how much should be paid. Means testing, rife with error and uncertainty, hasn’t disappeared. Instead, new, convoluted layers of administration have been added.
The ‘financial incentives’ have also turned out to be typical Tory newspeak meaning: ‘We’ll make you poorer unless you do exactly as we say.’ People in part- time employment are penalised if they don’t prove that they’re trying to find more hours – regardless of whether there are any to apply for. In short, it means the introduction of more sanctions.
The reason? Universal Credit has failed in another important area. It has done next to nothing to ‘make work pay’. For every pound a Universal Credit recipient in employment earns, the Treasury will claw back 63 pence. Meanwhile, top rate taxpayers get to keep 55 per cent of everything they earn above £150,000.
The failure of Universal Credit underlines once again how a universal basic income could achieve everything the new system aspires to achieve, but fails to deliver. No wonder there is growing interest around the world in exploring it. By eliminating means testing and sanctions, being cheap to administer, and removing disincentives to work, it could give people the safety and security they need, as well as the opportunity and choice they want, in a world where working patterns are changing rapidly. It is an idea whose time has surely come.