THE TORIES’ universal credit (UC) policy may actually cost more to run than the benefit system it replaces, according to a damning report published today by the National Audit Office (NAO).

The government’s flagship benefits policy — which replaces six “legacy” benefits including jobseeker’s allowance and housing benefit — has been widely criticised as “cruel” and “disproportionate” and for creating a “hostile environment” for claimants.

The NAO has now issued a scathing report, finding that since UC’s introduction there had been an increase in rent arrears and the use of foodbanks.

The policy had caused “difficulties and hardship” to a “significant minority of claimants,” it found.

It added that the Department for Work and Pensions (DWP) has “not shown sufficient sensitivity towards some claimants” and warned that UC must not be expanded before “business as usual operations” could deal with higher numbers of claims.

But the NAO said that, while UC might not ever deliver value for money, the government “does not have a realistic alternative but to continue” as it would be “both complex and expensive to revert to legacy benefits at this stage.”

Shadow work and pensions secretary Margaret Greenwood said the report “shows just how disastrously wrong the Conservatives have got the roll-out of universal credit” and called on the government to “pause and fix” the policy.

The government has already spent £1.9 billion on UC, with each claim costing £699, with officials hoping it will be reduced to £173 per claim by 2024-25.

The NAO dismissed the government’s “unproven assumptions” that UC will save it £8bn a year, finding that it was “not clear that universal credit will cost less to administer than the existing benefits system.”

Around a quarter (113,000) of new claims were paid late in 2017, with some claimants having to wait “five months or more,” and the NAO estimated that up to 338,000 claims would be paid late in 2018.

UC has also created “additional burdens” for local authorities funding foodbanks and advisory services, the report added, as well as for housing associations and landlords seeing an increase in rent arrears.

Ms Greenwood said: “The government has shamelessly ignored warning after warning about the devastating impact their flagship welfare reform has had on people’s lives.

“It’s because of their failure that people are being forced into debt, rent arrears and to rely on foodbanks to survive.”