By Tony Collins
The Work and Pensions Secretary Iain Duncan Smith continues to receive reports from his officials that things are going well with the Universal Credit project.
Which is just as well for the officials.
The most important of them is Malcolm Whitehouse, Universal Credit Programme Director, Department for Work and Pensions who has given a positive progress report on the Univeral Credit project to the House of Commons’ Work and Pensions Committee.
Whitehouse is “pleased to say” that HM Revenue and Customs’ “Real-Time Information” project – in which employers give HMRC monthly rather than annual details of how much tax and national insurance they are paying staff – is “on track and the pilot is going very well”.
Whitehouse’s paper ties in with the mood of Duncan Smith who, it appears, has no wish to convey anything but good news on UC, which is tough for anyone who wants to tell the minister the unvarnished truth.
“Whatever we do here is an investment in changing people’s lives,” said Duncan Smith when he went before the Work and Pensions Committee in September. The Committee’s MPs are investigating progress on universal credit.
Not so gung-ho
This week MPs on the Work and Pensions committee questioned Robert Devereux, Permanent Secretary, Department for Work and Pensions, on UC progress.
To various questions Devereux gave answers that showed the UC project is still subject to a plethora of uncertainties:
“We are doing quite a lot of piloting work now to try and understand exactly what the size of the problem is,” said Devereux. “Deciding on what that is depends on the work we are doing at the moment… we are trying to make sure how that will work … we are trying to work through how that will work in practice… it is difficult to know on a programme that will take until 2017 to complete exactly how that will fall out but we are doing quite a lot of work over the next six to nine months to try to get our heads around what that commitment will be …I don’t there is an individual cost for it because we are still trying to explore exactly what that will be… the amount that transition protection will eventually cost us depends on a number of variables not all of which we know at the moment … The business case has a set of assumptions on what these numbers will be…”
Staffing for UC?
“It depends … at the moment the department is absorbing within its budget … the number of extra staff is going to depend on where the economy is in 13/14, 14/15, 15/16, 16/17. In the event that the economy is in a good place I will have quite a lot of spare staff already which I will be able to redeploy.”
And support for claimants who are not online?
“I have 80,000 operational staff. We are not going to find ourselves short of staff.” He said that until the pilots are complete he will not know “what proportion of people will need what sort of help”.
The DWP said in a paper to the Work and Pensions Committee that a “pathfinder” pilot, which is due to begin in April 2013, will prove the core Universal Credit policy and supporting processes.
“The design for these IT systems is now in its closing stages, with the build plan on track to complete at the end of October 2012,” said the paper. “Rigorous, integrated IT testing has also commenced and will continue until February 2013, bringing together Universal Credit and the various external system changes, such as the Real Time Information system…
“October 2013 will see us start to roll out this core Universal Credit service incrementally in each region of Great Britain. It will also see us deploy the next series of functionality and processes in to the pathfinder sites.
“Early scoping and high level design work has now started on this, which will focus on the delivering digital (by default) processes. The programme will continue to build iteratively the functional capability to add automation and integration through to October 2015 and beyond.
“There will be robust standby arrangements which will enable the IT system to be fully recovered within a short period of time. These standby arrangements will cater for both failures within the Universal Credit IT System and possible catastrophic outage of infrastructure (i.e. Data Centre outage).
“The Department for Work and Pensions is recognised as having some of the best contingency arrangements in place across Government. Should there be a catastrophic outage of IT arrangements are in place that can be invoked to ensure people continue to get their money…
“It is estimated that RTI will deliver c£300m net reduction in administrative burdens for employers. PAYE reporting in real time will also support the introduction of Universal Credit…
“A pilot started in April 2012 to test the Real Time Information service and the IT and identify any issues which need to be resolved before most employers start submitting PAYE in real time in April 2013.
“The pilot is going very well and as a result Real Time Information is on track. So far there have been few issues and those that have occurred have been quickly resolved with ten volunteer employers.
“It was expanded on schedule in May to a further 310 PAYE schemes. Following the success of the first pilot stage, HMRC expanded the pilot again and by end July almost 1.8 million individual records were being reported in real time by 700 PAYE schemes.
“The quality of data in the pilot has been good, with the numbers of individual records matching to a National Insurance number exceeding expectations.
“Where a PAYE scheme pays using Bacs, HMRC uses an automated cross referencing process to match the amounts shown on the RTI return with the amount actually paid. This process is producing high rates of matching.
” HMRC is on track for around 1,300 schemes to be reporting PAYE in real time by the end of September and a further expansion in November. By March 2013 around 6 million individual records will be reported in real time by up to 250,000 PAYE schemes.
“HMRC are seeing external confidence in the pilot and have therefore offered more large employers, payroll bureaux, new employers and software developers the opportunity to join the pilot or to expand existing involvement in advance of the launch date of April 2013.
“This approach will bring more individuals into RTI, ensuring HMRC is well placed to support the early stages of Universal Credit including Pathfinder when it starts in April 2013.
“The remaining employers and pension providers will come on board from April 2013. HMRC are on track to have all employers and pension providers reporting PAYE in real time by October 2013 – in time for the introduction of Universal Credit.”
The Institute of Chartered Accountants for England and Wales, which supports the introduction of UC, has unanswered questions and concerns around the preparedness of HMRC, the DWP and some employers.
In a detailed paper to the Work and Pensions Committee the Institute also suggested there were many uncertainties about how the UC systems will work.
“The IT system UC will rely on will not be fully implemented in time, and many kinks and problems in the system haven’t yet been addressed,” said the Institute.
The CBI also supports the introduction of UC but has told the Work and Pensions Committee:
“While initial feedback from employers involved in the RTI pilot has been satisfactory, with officials providing adequate support when the system fails, we are concerned that such support will not exist when the programme is rolled out at scale.”
Universal Credit is not the same as other major government IT projects. It is being built on the lessons from failed projects. Hence the use of “fail early, fail cheaply” agile principles; and the extensive use of pilot projects.
But in at least one material aspect the coalition is repeating a mistake on past (failed) IT-enabled projects such as the NPfIT, Firecontrol and the Single Payment Scheme: in public it gives one side of the story – what’s going well – while keeping secret its own analyses of the problems, issues and risks.
This may mean in practice that claimants, Parliament, employers and even Iain Duncan Smith may not know that the project is in deep trouble until the problems are manifest.
It’s better for the coaltion to say something along these lines: “This is an important welfare reform, a simplification of benefit systems that carries with it the sort of risks that go with innovation.
“This is what’s going well, and these are the challenges we face. We need the help and forebearance of all involved to overcome the problems we face and have yet to face.”
Instead Duncan-Smith and his officials are waving aside their critics, telling them imperiously: “The programme is on track and on budget.”
There was extensive piloting before the advent of the NPfIT. It was called ERDIP. But the ERDIP results were largely ignored because they threw up all sorts of problems that, if taken seriously, could have stopped the NPfIT from going ahead in 2002.
Duncan Smith mentions the pilot projects – and the DWP publishes press releases on the results – but the department does not publish the findings in full. Will the DWP take any notice of the pilots if they throw up problems that could delay the scheduled start of UC in October next year?
To answer the question in the headine “How’s the UC project going?” we are not sure the DWP really knows. Parliament certainly doesn’t know.
Some of the clues are likely to be in the consultancy and other internal reports the DWP is refusing to publish. Let us hope they’re not too negative overall. If they are Duncan Smith will not want to read them; and he’s the man answerable to Parliament – and the public – for the success or otherwise of the scheme.