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  1. ITV Report

Full impact of welfare reform 'not yet felt in NI'

The reforms include PIP and Universal Credit.

A report from the Audit Office has warned the full impact of welfare reform has not yet been felt in Northern Ireland.

Welfare reform includes the implementation of the Personal Independence Payment - or PIP - and Universal Credit.

The report says claimants may face significant hardships when current mitigation comes to an end in March next year.

It also warns that demand for food banks could increase in 2020.

Northern Ireland has been insulated from the full impact of welfare reforms by the availability of mitigation schemes and local flexibilities.

– Auditor General Kieran Donnelly

The Auditor General added: “When the mitigation schemes end, there is a risk that we will see the same hardship and increase in the demand for food banks, reported elsewhere in the UK.”

The report said annual social security expenditure here currently totals £7.3bn, of which £6bn is administered by the Department for Communities.

The Fresh Start Agreement provided £585m from the NI block grant for the four years ending March 2020 to fund a mitigation package to "top-up" reductions in benefit payments.

The Department has estimated that the reforms will lead to savings of approximately £3bn for the Westminster Government by 2025/26.

Mr Donnelly added: "Welfare reforms provide significant challenges to the Department for Communities given the large number of claimants, complex benefit regulations and ensuring claimants receive their benefits on time.

“Although the department has made considerable progress to date, it is too early to comment on whether it is likely to achieve the savings it has estimated or overall value for money.

“Savings from welfare reforms go to HM Treasury directly not Northern Ireland.

“To balance this it is imperative that robust cross-departmental strategies are in place to boost the local labour market and strengthen the economy to make work pay."

A spokesperson for the Department for the Communities said the report noted considerable progress in managing the implementation of a complex programme of welfare reforms as well as new systems introduced for administering mitigation measures.

"However, until the formal audit process is fully complete, which includes a response from the Department to the report's recommendations, it is not in a position to comment at this stage," they said.

"The Department's remit is the administration of policy as set out by the Northern Ireland Executive. The department remains committed, in line with existing political agreement, to implementing the welfare reforms."