Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Rejected
DWP's labour market impact estimates rely on selected positive findings and assumptions
Conclusion
We asked how the Department’s evaluations of whether UC is more likely to get people into work compared with legacy benefits enabled it to estimate how much people contributed to the economy.15 The Department said it was now difficult to compare the labour market impact of UC with legacy benefits, as it had closed legacy benefits to new claims so there was no counterfactual.16 It asserted that it could use the findings from its evaluation of the impact of UC on lone parents to derive the figure of 200,000 extra entrants to the labour market set out in the UC business case. Specifically, it said that there would be eight million people on UC when it was fully rolled out, maybe half of whom would be in work; applying the impact of five percentage points to four million people would produce a figure of 200,000.17 We note, however, that in making this argument the Department chose to use the most positive of its evaluation findings and made a number of other assumptions.
Government Response Summary
The government rejects the implicit recommendation regarding its evaluation methodology and economic contribution estimates, stating that tracking specific claimant types was not an objective and would not provide valuable insights for the business case. It affirms its commitment to understanding labour market effects through existing monitoring and evaluation programmes.
Government Response
Rejected
HM Government
Rejected
2.1 The government disagrees with the Committee’s recommendation. 2.2 Tracking the types of employment Universal Credit claimants take up, and the duration of the claim, were not objectives of the Universal Credit Programme. 2.3 The department remains committed to understanding the labour market effects of Universal Credit and regularly monitors the labour market outcomes of Universal Credit customers using internal management information, as well as through a range of monthly and quarterly official statistics: the Office for National Statistics (ONS) claimant count, the department’s own Universal Credit official statistics, His Majesty’s Revenue & Customs-ONS payroll employment statistics and ONS statistics on employment, unemployment, inactivity, and workforce jobs. 2.4 The department is continuously developing Universal Credit statistics and has a wide-ranging research and evaluation programme on a range of departmental activity including five published impact evaluations, all showing the positive impact Universal Credit has had on employment. 2.5 The department does not agree that tracking a subset of claimants and publishing information on their employment, including a longitudinal study, would create the insight for which the Committee is hoping. This is because it could not show what would have happened in the absence of Universal Credit, and therefore would not help to prove the business case benefits. It would monitor outcomes but not isolate the impact of Universal Credit. The department, therefore, does not agree that this recommendation would be of significant value in the context of the Universal Credit business case impacts.