What’s Not to Like? Misplaced Faith, Ideological Partisanship and the Inflexibility of the Universal Credit Scheme By Tony Manzi, University of Westminster

Having signally failed to capture the public imagination with the idea of the Big Society, the UK Coalition Government has turned its attention to transforming the welfare state through the introduction of the Welfare Reform Act 2012, a key element of which was the introduction of Universal Credit. The justification for this benefit was (in theory) to provide a rational attempt to address the complexity of the welfare system by introducing one easily understandable, comprehensive payment. However, as with all attempts at welfare reform, the devil is in the detail. In this case the detail is proving to be far more problematic than government advisors anticipated (although this could easily have been predicted by anyone with a passing knowledge of the UK benefits system).

The purpose of Universal Credit was to combine six benefits (Income Support, Jobseeker’s Allowance, Working Tax Credit, Child Credit, Employment and Support Allowance and Housing Benefit) into one. This would enable an admittedly vastly complex system to be (at a stroke) simplified and unified through the integration of a single, comprehensive payment. The attractions of such a system were obvious. It would be (in theory) uncontroversial, easy to understand and simple to explain. Provision of a single, integrated personal subsidy would facilitate a more streamlined and transparent welfare service. Launched in 2013, the initiative was a particular passion of the Secretary of State for Work and Pensions (Ian Duncan Smith) who, in preparation for its introduction, undertook extensive study of conditions in a number of deprived areas across the UK. His commitment to the initiative has led Duncan Smith to claim that the project remains ‘on track’ and ‘within budget’ despite repeated delays and virulent criticism from MPs. Full implementation is not expected until 2017 but it is highly unlikely that this timetable will be met. Initial estimates of administration costs of £2.2bn have subsequently been revised (one estimate is that full implementation will cost in the region of £12bn).

Why has government placed such faith in a system that (well before its full introduction) appears severely flawed? A number of explanations can be given (many of which are identified in a 2014 study (King and Crewe – The Blunders of our Governments – Oneworld publications) of earlier policy failures. Firstly, such initiatives rely upon precise technology, promising fast, powerful and efficient communications, resistant to human error. Ministers have been long been attracted to solutions based on IT systems, despite (or because of) their lack of detailed understanding. A further attraction is that their administration can be easily outsourced. However, recent history has shown that assumptions about the efficiency and effectiveness of IT systems are (at the least) highly problematic.

Related to this problem are the ideological assumptions that the private sector is almost always more effective than the public and that welfare provision inevitably leads to dependency. It is not difficult to understand why a benefit system that can be easily comprehended (and just as easily withdrawn) would be so attractive to Ministers. Moreover, the welfare system is particularly vulnerable to the presentation of anecdote as accepted fact and a refusal to consider evidence that undermines core beliefs. Popular assumptions are rarely questioned – the oft-quoted statement of intergenerational worklessness is one example of this partisanship, despite a complete lack of supporting evidence. The process of ‘path dependency’ provides a further explanation for continued faith in the Universal Credit scheme. Considerable time, energy and resources have been exerted in formulating the proposals and failure is therefore inconceivable.

Difficulties in implementation of Universal Credit (even in a small number of ‘pathfinder’ authorities) indicate that these problems will inevitably be intensified when the scheme is ‘rolled out’ across the country. Moreover, forecasts by the Institute of Fiscal Studies and Joseph Rowntree Foundation show that any financial advantages of the scheme are likely to be offset by other tax and benefit changes to produce increases in relative and absolute poverty. There is good reason for the complexity of the contemporary benefits system as it has to deal with the multifaceted circumstances of large numbers of individuals with highly diverse needs. A system that demands simplification, is over-reliant on technological faith, motivated by intellectual prejudice and inflexible in its design, seems almost certainly doomed to failure. However, as we have grown accustomed to witnessing, those responsible will avoid blame and households in the greatest need will suffer the most severe consequences.

Tony Manzi, University of Westminster