This is the real reason Universal Credit hasn't been cancelled yet

Universal credit is failing, and truth be told, I probably don’t need to convince you of that fact. There is a technical term in Whitehall for a project as far gone as Iain Duncan Smith’s welfare grand reform plans: “A steaming pile of garbage.”

IDS’s pet project (before he moved on to fixing Britain’s relationship with the EU) was supposed to make work pay and simplify the benefits system. It does neither: cuts and caveats piled on the project by George Osborne to save money mean people in work will get less than under the current system. Claimants see their payments jump around like a flea from month to month. Conditionality, the root of complexity and bureaucracy in the benefits system, has if anything been ramped up. The system not only fails on its own terms, but has been associated with soaring rent arrears and foodbank use amongst people subjected to it.

With Iain Duncan Smith now safely on the backbenches, you could be forgiven for wondering why a project without any redeeming features hasn’t been scrapped. There is an obvious political reason for this: it would be a huge climbdown and admission of failure on a flagship project that was first announced in 2010 and has only got worse after over seven years. But governments can take those, ride out a week of bad publicity, and then go back to talking about Brexit for the rest of our lives. But in the case of universal credit, there is a far more concrete reason the project hasn’t been cancelled.

To understand why, from the Government’s point of view, UC really, really, can’t be cancelled, cast your mind back to the heady days of November 2015. George Osborne had just U-turned on his plans to cut tax credits after a massive outcry. Except, he hadn’t quite cancelled the cuts – eagle-eyed hacks noticed that Universal Credit would still be cut by the same amount and in the same way when it replaced the existing tax credit system. Since everyone would eventually move to UC, the tax credit cuts were really just delayed. It was a political sleight of hand, but it was also ages away, so it didn’t get that much attention.

It also turns out that those delayed tax credit cuts were also the only really big money savers the Government has been able to cut from the welfare budget. Despite tabloid moaning, the benefits spend is already pretty lean and when you start to take big chunks off it, extremely bad things happen, people get very upset, or both. The early vigour with which the coalition government announced new cut after new cut has tailed off in recent years in the face of political opposition.

So the only big welfare cuts the Conservatives managed to make are hard-baked into universal credit. Add to this a host of other smaller cuts that come in with universal credit, like work allowances, higher sanction rates, extra conditionality for parents with young children, and the project becomes a tray on which to bring in a whole host of cuts and keep the Government from straying even further from its deficit targets. If the Government scraps the scheme, it either has to re-announce those extremely unpopular tax credit cuts, or completely miss its deficit targets, formally admit that austerity has been a huge failure, and lose its last shred of fiscal credibility.

Better for them to kick the can down the road, though not so great for the people who have to live with it.