UK Politics

Welfare reform: A chance to curb fraudulent payments?

At present more than £5bn a year is lost in fraud and error. The government's shake-up of the benefits system is widely seen as the biggest change since the introduction of the welfare state.

The aim is to make benefits easier to understand and make it very clear that finding work is financially worthwhile.

Several benefits will be collapsed into a single payment under the new system.

Welfare reform minister Lord Freud said once Universal Credit was fully implemented by 2017-18 it would enable significant savings in fraud - more than £2bn - because it would limit the scope for undeclared and undisclosed earnings.

It has also been revealed that at present 40% of all benefit claims are delayed because paperwork is lost in the system.

Currently up to two hundred pages of forms have to be filled in to claim various benefits. This will be reduced to one online form under Universal Credit.

Big bang v pilots

The Work and Pensions Secretary Iain Duncan Smith and his colleague Lord Freud held a briefing for reporters at Westminster, in what will be seen as a concerted effort to go on the offensive after widespread criticism of the flagship benefit reform.

Within the last fortnight, Universal Credit has been criticised by councils, charities, trades unions, business groups and housing organisations in submissions to the Work and Pensions Select Committee.

There was an attempt to elbow Mr Duncan Smith out of his job during the ministerial reshuffle, which he resisted.

And, in the last few days, there have been reports that the government's most senior civil servant, the Cabinet Secretary Sir Jeremy Heywood, is "sceptical" about Universal Credit.

"I don't get demoralised, I used to lead the Conservative Party!" Iain Duncan Smith said with a smile, to laughter from the press pack.

The secretary of state was at pains to point out, in some detail, the expertise he has assembled to deliver his big idea within his department.

He handed to journalists a ten point rebuttal of the recurring criticisms of Universal Credit. In short, he insists it is on budget, the computer that will run it is reliable, 2.8 million people will be better off because of it and the project will not be delayed.

"This is not a big-bang change," was the oft-repeated line. Piloting is already underway and whilst the scheme goes live in October 2013, it will be phased in over a number of years after that.

Ministers also insisted it makes sense the system will be "digital by default" and encourage recipients to manage their benefits online, it makes sense to pay people monthly and it will ease the burden on employers, not increase them.

"Companies will have to press one more button than they do now, that's all," the Treasury Minister David Gauke said.

Suggestions that George Osborne has his doubts about the idea were also bluntly dismissed. "The Chancellor fully supports the Universal Credit reforms and any suggestion otherwise is untrue," we were told.


But Mr Duncan Smith was defensive when asked why his department has refused to publish internal government assessments about how the implementation of the project is going so far.

"The business case is for us, it is for you to judge us on what we deliver," he said. Any such information would be no more than snapshot at a fixed point in time, he argued. But some will assume his reluctance to publish it, or even publicly discuss it, could be because it has raised significant concerns.

For the work and pensions secretary, getting Universal Credit right amounts to the culmination of a ten year political journey, that began with what was dubbed his "Easterhouse epiphany".

His trip to a poor estate in Glasgow in 2002 for a by election turned out to be more than the usual hand shaking, envelope stuffing, door knocking political trip for the then Conservative leader.

His time at the top of the Tory Party didn't last long, but the legacy of that visit did.

Mr Duncan Smith went on to set up the think tank the Centre for Social Justice and develop a life-long political interest in welfare reform.

No one disputes the scale of what he is now attempting to achieve. It is for that reason so many questions are being asked about the practicalities and implications of Universal Credit.

There is little doubting Mr Duncan Smith's resolve to press on with the shake-up.

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