Universal Credit pilot schemes are scaled back...

[dutchman]

The government is to scale back some of its plans to test a radical new reform to the welfare system.

Ministers had intended to allow people to claim the new Universal Credit in four areas of the north west of England from next month.

But it has now emerged that three of the pilot programmes will not start until July.

Universal credit is intended to be the biggest shake up of the welfare system for a generation.

It will merge several earnings-related benefits and tax credits into one single payment, and is designed to be simpler, cheaper and a greater incentive to work.

But the scheme is so complicated that the Department for Work and Pensions decided to test it in four areas in the north west next month before making it available nationally in October.

However, the department now says this pilot programme will start only in one area in April - Ashton-under-Lyne.

The other three job centres - in Wigan, Warrington and Oldham - will not now start handing out universal credit until July.

A work and pensions spokesperson said there was no delay and the gradual testing was designed to make sure that the scheme was ready for everyone later this year.

"Our plan has always been to test Universal Credit in a safe and controlled way during Pathfinder to ensure we get it right for the start of the national rollout in October."

Labour criticism

But Labour said this showed the scheme was in crisis and that the information technology needed for it was not ready.

Liam Byrne MP, Labour's Shadow Work and Pensions Secretary, said: "This is yet another embarrassing setback for Universal Credit.

"The scheme is already late and over-budget and in spite of earlier promises ministers have admitted that they have no idea when out of work claimants will move over to Universal Credit.

"The truth is the IT for Universal Credit appears to be nowhere near ready.

"This scheme is now on the edge of disaster. Ministers must admit this project is in crisis and start to fix it now - before millions of families tax credits are put at risk."

Universal Credit calculations depend on salary data from HMRC's new PAYE Real Time Information system.

Mr Bryne said obligations for small firms to provide PAYE data on or before each employee payment had recently been delayed from April until October.