Government must not “bury its head in the sand” over Universal Credit failure

The Government must urgently reconsider the rollout of Universal Credit (UC) and heed the growing warnings about the damage the policy has caused, IPSE (the Association of Independent Professionals and the Self-Employed) has said.

The call follows an intervention by the National Audit Office (NAO), who highlighted a series of inaccuracies made in an address by Esther McVey, Secretary of State for Work and Pensions.

Jordan Marshall, IPSE’s Policy Development Manager, commented: “It’s extremely concerning that the Government continues to assert that Universal Credit (UC) has been a success. This is despite the National Audit Office (NAO) and many other independent bodies clearly warning otherwise.

“The Government’s claim that the policy is being rolled out too slowly runs directly against the NAO’s recent calls for a ‘pause’ in the policy. The NAO report clearly highlighted the ballooning costs of the scheme, as well as the “difficulties and hardship” individuals are experiencing as UC is rolled out.

“Nowhere is its damaging impact felt more clearly than among the self-employed. The report reiterated that the self-employed ‘lose out due to monthly reporting’. This is a huge problem as it does not take into account the fact that the income of the self-employed varies hugely from month to month. This means a self-employed person can end up £3,000 worse off each year under UC compared with an employee earning the same amount.

“Why, for example, should a farmer, who sells or produces crops only at a particular time of year, be penalised? The Government must address the problem of monthly reporting by considering self-employed earnings over a more reflective annual basis.

“The warnings of not just the NAO but many other independent bodies must be heeded. The Government cannot bury its head in the sand about Universal Credit’s failures any longer. It must urgently rectify the problems rather than pretending they do not exist.”