The government’s flag ship programme in the DWP is Universal Credit. This will supposedly guarantee that work always pay more than staying on benefits.

The TUC website Touchstone (where TUC experts analyse government polices) in their checking of the budget documents, report:

Update at 6.16 pm: on first reading the Budget Report, I missed paragraph 1.38, which looks almost as significant as the £10 billion of cuts. This says “there will be a cap on the additional costs of Universal Credit up to £2.5 billion a year in the next spending review.”

This must mean one of two things:

• If it looks as though the cost of the Universal Credit is going to break the cap there will have to be changes to the rates or to the design; or
• UC will operate like a giant Social Fund, and when the money runs out people won’t be able to make a claim.

Either way this small paragraph could mean the destruction of Iain Duncan Smith’s dream. The UC, designed to provide a consistent guarantee that work always pays will no longer be able to do so. What will happen if more and more workers find themselves stuck on low-paying jobs? Or if unemployment rises? Or it becomes harder for disabled people or lone parents to get work?

This web posting can be found at: http://touchstoneblog.org.uk/2012/03/the-timebomb-threatening-the-very-poorest/