In its fourth major report on Universal Credit, the NAO warned that while its design and operational processes may “not cause all the issues that claimants may face”, in the context of many claimants’ existing financial difficulties, the procedure “can exacerbate their problems”.

The actual number of people paid late has increased because more people are now claiming Universal Credit, the report added.

As many people claim Universal Credit at a challenging time in their lives, the initial wait, which the NAO described as “an inherent part” of Universal Credit’s design and operational processes, does not cause all the issues that claimants may face but, in the context of many claimants’ existing financial difficulties, can exacerbate their problems.

Since the NAO last reported in June 2018, the DWP has improved the proportion of people getting their first Universal Credit payment on time and in full to around 90%. Although the cost of administering each claim is still higher than expected, the NAO said the DWP has demonstrated an ability to gradually make Universal Credit claims more cost-efficient by automating and improving processes. It needs to demonstrate a similar determination to tackle the high levels of fraud and error, the report added.

The DWP has also succeeded in improving payment timeliness so far by improving processes that affect large numbers of people. However, as the Universal Credit caseload has grown, a large number of people still do not receive their full payment on time. Vulnerable people may be particularly likely to struggle with their claim, the NAO said.

The report urges the DWP to better understand and address the needs of vulnerable people and those with more complex claims, who may be at greater risk of struggling under the Universal Credit regime.

Gareth Davies, head of the NAO, said: “The DWP deserves credit for improving its processes so that 90% of claimants are now getting their first Universal Credit payment on time. However, it is concerning that vulnerable people and those with complex claims may struggle with their Universal Credit claim and face financial difficulties.

“The DWP needs to improve its understanding of vulnerable claimants and how best to support them to ensure that no one is slipping through the net. This is only going to become more important as the economic upheaval caused by COVID-19 continues.”