UK SINGLE PAYMENT PLAGUED BY DELAYS AND COST BLOWOUTS

Media Release

Jenny Macklin MP

Shadow Minister for Families and Payments

Shadow Minister for Disability Reform

Thursday, 24 April 2014

Kevin Andrews’ ‘simplification’ of Australia’s welfare system into a UK-style single payment may not be as simple as it sounds, with the UK single payment plagued by delays and cost blowouts.

In fact, the British Conservative Government’s prized simplification of welfare payments into one ‘Universal Credit’ could be abandoned if it doesn’t start meeting its targets.

Yet Kevin Andrews has today suggested the government was looking at a similar single payment, in apparent ignorance of the many issues that the program has experienced since it was announced.  

Labor is not against simplifying the system, but the devil, as always, is in the detail, and in the UK it has been a complete shambles.

Kevin Andrews needs to ensure these issues are not repeated here.

In September 2013, the UK National Audit Office released a report on the implementation process. It was scathing, finding that ‘it is unlikely the Universal Credit will be as simple or cheap to administer as originally intended. Delays to rollout will reduce the expected benefits of reform’.

In February of this year, the UK’s Department of Work and Pensions released a report showing that only 3,200 people had been moved on to the simplified welfare payment since it was announced in November 2011, significantly below the Government’s target of 1 million by April 2014.

A February report in the Guardian newspaper also revealed the staggering cost of the scheme - which has blown out to £612m ($1.1b) – the equivalent of  £225,000 per person or close to AUD $420,000.

Although the plan was for every welfare recipient to be moved onto the new payment by 2017, the British Financial Times quotes a senior British public servant saying the welfare reforms:

“must start delivering results by the next election or risk being drastically scaled back or even abandoned”

[Financial Times 18^th February 2014]

If Kevin Andrews and Tony Abbott plan to follow the conservative playbook on welfare reform, Australian taxpayers will need some concrete assurances that the scheme is actually going to work.

It doesn’t seem to be working in the UK. 

The Abbott Government needs to come clean with the Australian people about exactly what they are planning, who will be affected, and how much it is going to cost.