Universal Credit – A £24 billion per year increase in ‘welfare’

Universal Credit is the biggest folly in history and cannot work even in theory AND will see the overall ‘welfare’ bill rise by £24 billion per year.

The key issue that all UC advocates miss is that it has a one-stop-shop assessment for welfare benefits and child and working tax credits, or ‘welfare.’  Instead of claiming welfare benefits from DWP and Housing Benefit from you council and instead of HMRC for Tax Credits, UC rolls this into one claim and one point of call and with a one-stop assessment for ALL ‘welfare.’

This means that the UC applicant will receive ALL the ‘welfare’ they are ENTITLED TO.

The latest figures from DWP say that around £16 billion per year of welfare benefits goes unclaimed yet when UC replaces the current system that £16 billion will have to be paid.

HMRC’s latest estimate is that around £8.4 billion per year of working tax credits and child tax credits goes unclaimed and similarly when UC replaces the current system that £8.4 billion per year will have to be paid.

Hence when (or if?) Universal Credit does fully roll out it means that government will have to pay out this combined £24 billion per year MORE in ‘welfare’ than it does now.  Every one of the 7.7 million who will move to UC will get every penny of ‘welfare’ and not a penny more and not a penny less.

If anyone can give me a reasoned argument why the above will not happen then please let me know because there isn’t one.

I am happy that everyone will get precisely what they are ENTITLED TO in welfare and it is only right and proper that they do.  Yet where will this and all other future governments get the additional £24 billion per year to pay for UC?

The full details of what goes unclaimed, this £24 billion per year and £66 million per day with all the official sources for it is contained here.

A simple table I used is below and shows that DWP say between £11.994 billion and £15.657 billion is entitled yet goes unclaimed in just 5 welfare benefits.

take up table unclaimed 2013-14

The reason for restating all of the above is that Stephen Crabb has made his first public speech after taking over from IDS and is restating the same bull and bluster about Universal Credit as IDS did.

Yet what is truly incredulous is that his opposite number Owen Smith still believes that Universal Credit was and is “a great idea!”

Mr Crabb’s opposite number, Labour’s Owen Smith, said Universal Credit was a “great idea” but warned of the impact of spending cuts, calling on the minister to carry out a “thorough review”.

The simple point and fact that Universal Credit will have to pay out what the current system does not – the benefits and tax credits entitled to that go unclaimed – means that UC is monumentally stupid for any government of any political party to bring in as it will cost £24 billion per year more.

So while I am happy that ‘welfare’ claimants will received all they are entitled to, the question is where the hell is government going to find the money to pay for that?

Answers on a back of a fag packet to ….




13 thoughts on “Universal Credit – A £24 billion per year increase in ‘welfare’

  1. It won’t have to pay out quite that much because of all the cuts they’re introducing. No doubt when they come to understand your point, they’ll cut many billlions more.

  2. Joe is spot-on in his analysis. UC effectively ends the need for community groups launching a benefit’s take-up campaign. The government has effectively done this but as Joe points out has missed the unintended consequences for the policy – 24 billion unclaimed benefits suddenly claimed! With this level of incompetence, complete lack of risk analysis, dire and useless business case methodology, I question who should resign for this shambolic state of affairs. Civil servants will surely have pointed out the consequences, or have they remained silent to sabotage perceived unfairness in welfare benefit cuts

  3. All highly improbable I fear. To begin with you are including figures for Pension Credit underclaims whereas PC is not in fact transferring to UC, except for a few mixed age couples. Then you are ignoring the many and varied cuts that are being introduced as part of the transition to UC – for instance, all last years postponed Tax Credit cuts and – a massive one this – the abolition of severe disability premium. More fundamentally, if people are not claiming HB and WTC when they are entitled to, why on earth should they all claim UC? The reasons why people chose not to claim HB and WTC are all present – in spades – in UC as well – the bureaucratic and intrusive claims process and the fear of overpayments for instance. In fact the UC claims process is far worse than for any existing benefit – online or by a premium cost phone line – and to the risk of overpayments is added the near certainty of punitive sanctions from the UC sanctions machine. The official government projections are for an extra £2 billion in expenditure via improved take up. I reckon this is indeed hogwash but for opposite reasons to Joe – I think any one who possibly can will do anything they have to to avoid claiming UC – and benefit take up will, if anything fall, as a result. Hunger and homelessness will take the strain.

    1. The “many and varied cuts” according to govt figures amount to around £4bn (inc severe disability premium) or so per year and so cannot mitigate the additional £24 billion per year increase. In full agreement with the systemic reasons seeking to dissuade cuts and the likely increase in UC sanctions too – and many other policies will cause far more homelessness especially the reducing overall benefit cap to £20k in the autumn.

      Yet none of these put aside the main point that the increased take up of entitlements through the one-stop-shop process which means a claimant before who sought a DWP benefit access point but not HMRC for tax credits or LA for Housing Benefit will see an one off assessment for all entitlement (of course that assumes UC IT will actually work!!)

      The real issue is that UC cannot work in theory, yet every Tom, Dick and Harry from every political party believes it can and will save money because of its streamlining which is a total crock as they all miss out the non take up of benefits and tax credits that UC will ensure is 100%

  4. All taken from F/B posts:
    “I can’t wait to move over to UC, then the lying by DWP and evasion by HMRC will stop and I will get my full entitlement, denied to me at the moment, for the reasons stated.”
    “Under UC I’m £135 per week better off”
    ” I now get all the money I was owed because of it (UC)”
    ” I now get a£48 per week more than I did before they put me on it(UC)”

  5. All ESA – both WRAG and Support group – are going to be abolished, according the Crabb in his previous utterances. The £30 for ESA WRAG has already been passed pre-UC, because Osborne won’t wait for UC roll out. Probably knows it is never going to happen, However, there is no disability element in UC at all, and Crabb has cherry -picked the Reform group report – already a massive attack on the benefits for sick and disabled – and included the most punitive. The Reform group report apparently proposed PIP as a one-stop benefit to replace ESA, but instead of making it more easily claimed, as Reform suggested, has actually said he will tighten up the qualifiers for PIP. Nasty beyond IDS? Possibly.

  6. This confuses me as I am in the process of claiming the “Limited capability for work” element for my current UC claim. I am working part time, but my Dr agrees I am not physically up to full time work and I don’t want them pressurising me to take on a second parttime job.

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