Universal Credit will cost taxpayers £12.8bn
The government’s recent review of major projects revealed that the flagship Universal Credit welfare programme will cost nearly six times more than previously billed.
The Department for Work and Pensions (DWP) said Universal Credit will cost £12.8bn – not the £2.2bn figure that has previously been claimed – because it needs to run existing benefits in parallel as it brings in the new scheme.
The Cabinet Office Major Projects Authority Annual Report revealed the whole-life cost of Universal Credit to be £12.8bn, over £10bn more than DWP said it would cost when it put the programme before Parliament in 2010.
DWP said in a statement that the £12.8bn would cover initial capital and resource costs, including the IT system and the administrative cost in people and buildings of running Universal Credit in parallel to the six existing benefits it is intended to replace. It also included recurrent costs such as IT maintenance and staff to run the new benefit system until 2021.
"This figure covers the estimated costs for developing and operating Universal Credit over 11 years, including staff costs, IT and other administrative costs," said DWP in a statement.
"However, it does not take into account the savings that will be generated by replacing the current complicated benefit system with the simpler and more streamlined Universal Credit (UC) system.
"There are, of course, costs that come with setting up an entire new benefit, including staff costs and all the administrative costs that come with that. Remember that during the development of UC, the other benefits continue as usual, so a separate resource would be required for UC."
The department added: "We remain within our £2bn budget for upfront development and delivery costs for UC within the spending review period (2011-2015).”
Stuart Adam, senior research economist at the Institute for Fiscal Studies, said: "If most of the £12.8bn was the one-off cost of setting up UC that would seem pretty eye-watering.
Computer Weekly
