Is Universal Credit behind schedule and over budget?

By Tony Collins

The Independent on Sunday claimed yesterday that the Universal Credit programme is a year behind schedule, software issues could push that back further, and the budget has been exceeded by £100m.

It says the launch of Universal Credit, which is scheduled for next October, “ will now be limited to small regional projects”.

There is little in the article to support its claims. But the Department of Work and Pensions has provided no evidence to indicate that the claims are wrong.

“A reorganisation of the complex IT system, following the departure this month of key senior civil servants in charge of universal credit, could mean an overrun of £500m by next spring,” says the paper. “Six pilot projects that are testing direct payment of benefits to tenants in housing associations have reported errors including the wrong amount of money being sent on the wrong date.”

One project involving just 400 claimants initially proved chaotic, says the paper. It quotes a government adviser on information technology as saying that work and pensions secretary Iain Duncan Smith,  like other ministers before him, has been “hypnotised by promises of what an online system can deliver”. Warnings were given to him more than a year ago. “They were ignored.”

The paper also suggests the Department for Work and Pensions is hiding £300m of rising costs by reallocating them to child support payments.

Comment:

Pilot projects are supposed to highlight things that need rectifying; and the DWP has long planned only a limited go-live next October. But the DWP’s repeated claim that key executives are leaving the programme because UC is moving from design to delivery and implementation is wearing thin. The DWP is hiding its internal reports which could reveal the programme’s uncertainties, challenges and assumptions.

This is a pity because there are parts of UC that appear to be going well and others that are not. It is difficult to obtain an overview.

In some ways UC is following the usual train tracks of a conventional government IT disaster:

– Defensive, secretive programme leaders saying, disingenuously, that their programme is the most scrutinised in history.

– The programme’s benefits are always referred to in the future tense.

– Well-meaning realists who point out the problems, uncertainties, and assumptions are derided as defeatists.

Iain Duncan Smith appears to be isolating himself by telling Parliament that all is going well. Tradition on IT disasters dictates that those responsible for a project hear only what they want to hear; they filter facts according to their internal mind map, and they don’t wish to have around them any executive whose version of the truth is off-message. As in Barnet Council’s outsourcing plans, the official programme consists of what is going well and the risks that are being satisfactorily mitigated. Nothing is going badly. But in the case of UC few are convinced, not even the DWP’s permanent secretary Robert Devereux.

Some third-party software specialists say that HM Revenue and Customs is trying to cope with difficult if not impossible deadlines on implementing Real-Time Information, on which the success of UC depends.

They say that HMRC has been making shortcuts with scoping and definition of requirements.  Certainly HMRC has found that national insurance numbers are not useful unique identifiers for employee records because many people don’t have them or have meaningless duplicates such as AB123456. This puts employers under pressure to come up with consistently unique identifiers for staff, for the benefit of HMRC’s RTI systems.

It could end up with employers being blamed, at least in part, for HMRC’s many duplicate records. Indeed employers could be among the scapegoats for any failure of Universal Credit.

If the DWP wanted to separate itself from the IT disasters of previous governments it would publish the facts on UC, the pilot projects and RTI. It’s only when the problems are admitted that they can be tackled.

RTI is a good idea: it could cut HMRC’s administration costs in the longer run; and UC is a good idea if properly implemented, so long as the disabled are not penalised because of it. UC may greatly simplify the benefits systems in the long run.

But while the DWP and Duncan Smith have a bunker mentality people will continue to think they have much to hide. And they probably do.

PS: There are allegations from within the UC teams that there is charging by some contractors for man-days not fully worked, and that over-charging is not difficult because of the thousands of man-days being worked and invoiced. There are also claims that the main UC systems have gone through several versions – version eight at last count – but none has yet been shown to the main groups of business users. Clearly these allegations need investigating.