Does Universal Credit make a mockery of Whitehall business cases?

By Tony Collins

Does Universal Credit make a mockery of this Treasury guidance on business cases?

It’s supposed to be mandatory for Whitehall departments to produce business cases. They show that big projects are “unequivocally” affordable and will work as planned.

But Computer Weekly said yesterday that the Department for Work and Pensions has not yet submitted a full business case for Universal Credit although the programme has been running for six years.

The result is that the Universal Credit IT programme may be the first big government computer project to have reached the original completion date before a full business case has been finalised.

Its absence suggests that the Department for Work and Pensions has not yet been able to produce a convincing case to the Treasury that the IT programme will either work or be affordable when it is due to roll out to millions of claimants.

The absence also raises a question of why the Department for Work and Pensions was able to award contracts and proceed with implementation without having to be accountable to Parliament for milestones, objectives, projected costs and benefits – all things that would have been recorded in the full business case.

If the DWP can proceed for years with project implementation without a full business case, does this mean that other Whitehall department need have no final structured plan to justify spending of billions on projects?

Will Universal Credit work?

By early March 2017, fewer than 500,000 people were on Universal Credit. On completion, the system will be expected to cope with seven million claimants.

Although the rollout of the so-called “digital” system – which can handle all types of claim online – is going well (subject to long delays in payments in some areas and extreme hardship for some), there are uncertainties about whether it will cope with millions of claimants.

Universal Credit campaigner John Slater has been unable to obtain any confirmation from the DWP on whether it is planning to complete the rollout by 2022 – five years later than originally scheduled.

Business cases present arguments that justify the spending of public money. They also provide a “clear audit trail for purposes of public accountability,” says Cabinet Office guidance on business cases.

But hundreds of millions has already been spent on Universal Credit IT, according to the National Audit Office.

Business cases are mandatory … sort of

The Treasury says that production of business cases is a

“mandatory part of planning a public sector spending proposal …”

Yesterday, however, Computer Weekly reported that,

“Amazingly, given the programme has been going since 2011, the full business case for Universal Credit has still not been submitted or signed off by the Treasury – that’s due to take place in September this year.”

The Treasury says that preparation of the Full Business Case is “completed following procurement of the scheme – but prior to contract signature – in most public sector organisations.”

But by March 2013, the Department for Work and Pensions had already spent about £303m on Universal Credit IT, mostly with Accenture (£125m), IBM (£75m), HP (49m) and BT (£16m), according to the National Audit Office.

Why a business case is important

The Treasury sums up the importance of business cases in its guidance to departments,

“… it is vital that capital spending decisions are taken on the basis of highly competent professionally developed spending proposals.

The business case provides a

“structured process for appraising, developing and planning to deliver best public value.”

The full business case, in particular, sets out the

  • contractual arrangements
  • funding and affordability
  • detailed management arrangements
  • plans for successful delivery and post evaluation.

In the absence of a full business case the DWP was able to start the Universal Credit IT programme with little structured control on costs. The National Audit Office found in 2013 that there was

  • Poorly managed and documented financial governance
  • Limited evidence that supplier invoices were properly checked before payments were made.
  • Inadequate challenge of purchase decisions
  • Insufficient information on value for money of contracts before ministers approved them
  • Insufficient challenge of suppliers’ cost changes
  • Over-reliance on performance information from suppliers that the Department for Work and Pensions didn’t validate.
  • No enforcement by the DWP of key parts of the supplier contracts

Comment

Officials at the Department for Work and Pensions have gone to the bank for money for a new business venture – the building of Universal Credit IT – and said in effect,

“We’ll let you have an outline business case that may change a few times and in a few years, perhaps on completion of the programme or thereabouts, we’ll provide a full business case. But we’d like the money now please.”

In response the bank – HM Treasury – has replied in effect,

“You’re supposed to supply a full business plan before we decide on whether to give you the money but we know how important Universal Credit is.

“We’ll tell you what: we’ll let you have a few tens of millions here and there and see how you get on.

“For the time being, without a full business case, you’re restricted to an IT spend of around £300m.

“In terms of the eligibility criteria for the money, you can let us know what this should be when you’re a few years down the road.

“We accept that you’ll be in a much better position to know why you should be given the money once you’ve spent it.”

Does “mandatory” mean anything when there is no sanction against non-compliance?

And when the DWP is able to embark on a multi-billion pound programme without submitting a full business case until after the original completion date (2017), what’s the point of a business case?

The fact that the DWP is six years into implementation of Universal Credit without a full business case suggests that departments make up the rules as they go along.

What if the Treasury rejects the Universal Credit business case when it’s eventually submitted?

Will the DWP wait another few years to submit a case, when an entirely new set of officials will be in place? By then, perhaps, the Universal Credit rollout will have finished (or been aborted) and nobody at that stage could be effectively held to account if the scheme didn’t work or money had been wasted.

If Whitehall routinely waits until an IT-based programme is finished before presenting a full business case for Treasury approval, there’s nothing the Treasury can do if it wants and needs the programme.

Sir Humphrey is all-powerful.  Why should officials worry about presenting full business cases on programmes they know there’s a political imperative to deliver?

Can DWP meet its revised 2022 target for completion of Universal Credit? – Computer Weekly

Treasury guidance on business cases

 

 

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5 responses to “Does Universal Credit make a mockery of Whitehall business cases?

  1. I recall that back in 1980’s, in the early days of an ambitious project at my then Employer, it kept slipping a week, every week, month after month – until a Senior Manager was brought in to bash heads. A volatile Colombian, with no track record in IT projects, he literally did that in his 3rd status meeting. He threw a chair across the room, smashing a hole the size of a mans head in the wall, and suggesting next time he heard of any slippage that would be someone’s head. Perhaps the DWP could do with some of that medicine?

    Liked by 1 person

  2. Reblogged this on sdbast.

    Like

  3. Thank you for this post, Tony.
    I can’t contribute much, but that won’t stop me.
    I continue to be astonished at the contempt those who have power show to those of us who do not.
    It is dishonourable, and too typical of today, that the passive-aggressive “absence of data/information/communication” is regarded as being acceptable for us, the taxpayer, and safe for them, the bureaucrats who spend our taxes.
    One of the oldest tricks in the book for bureaucrats is – the less you tell, the less there is to incriminate you. “No comment” isn’t just reserved for suspects undergoing police interrogation.
    The absence of vital information is just as telling as its presence. But, only to an enquiring mind.
    Thank you for being that mind.
    Zara.

    Like

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