Universal credit is 'poor value'

Written By Unknown on Kamis, 05 September 2013 | 15.37

5 September 2013 Last updated at 03:35 ET

The government's flagship welfare reform has been badly managed, is "overambitious" and poor value for money, the spending watchdog has said.

The National Audit Office said risks were taken with the universal credit to hit targets, IT systems had "limited functionality" and an unfamiliar project management approach was used.

A national rollout of the new benefit has been delayed following IT glitches.

Work and Pensions Secretary Iain Duncan Smith said these had now been fixed.

Mr Duncan Smith told the BBC: "This will be delivered within budget and within the timescale."

He said the pilot scheme, which has begun with 1,000 people in the Manchester area, "is demonstrating that the IT we put forward for this actually works".

Under the government's plans, six key means-tested benefits - jobseeker's allowance, employment support allowance, housing benefit, working tax credit, income support and child tax credit - are to be combined into a single payment which ministers say will ensure that claimants are always better off in work and also reduce fraud.

The transformation, championed by Mr Duncan Smith, requires the merging of complex computer systems in benefits offices, HM Revenue and Customs and local councils - which the government insists can be done.

All new claimants were supposed to receive the universal credit from next month as part of a phased implementation plan but this has been delayed following a number of pilots earlier this year.

'Poor governance'

Instead, new claimants at six "hub job centres" in England, Wales and Scotland will receive the new benefit from October.

The watchdog's report identified "early setbacks", and says: "At this early stage of the Universal Credit programme the department has not achieved value for money.

"The department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300 million to develop.

"These problems represent a significant setback to Universal Credit and raise wider concerns about the department's ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress."

The report said there was still potential for universal credit to bring about "considerable benefits" if the department put "realistic plans and strong discipline in place".

The setbacks the watchdog identified include:

  • Officials were "unable to explain" the reasoning behind the timescales or their feasibility
  • There were no "adequate measures" of progress
  • Computer systems lack the function to identify potentially fraudulent claims, relying instead on manual checks
  • £34m investment in IT systems has been written off
  • The Department for Work and Pensions (DWP) lacked IT expertise and senior leadership
  • Delays to the rollout will reduce the expected benefits of reform

Expenditure on IT systems has accounted for more than 70% of the £425m spent to date but the report suggested officials do not yet know whether the infrastructure in place will support a national rollout.

Continue reading the main story
  • From October 2013 to April 2014 about half a million new claimants were due to receive universal credit instead of jobseeker's allowance, employment support allowance, income support, housing benefit, working tax credit and child tax credit.
  • At the same time, another half a million existing claimants and their families were due to be transferred to the new credit when their family circumstances change significantly, for instance if they get a job or have another child.
  • From April 2014 a further 3.5 million claimants and their families were due to move to universal credit.
  • And from the end of 2015 to the end of 2017 a further three million people are due to be moved over, focusing on housing benefit claimants

While steps were taken at the end of 2012 to get to grips with some of the problems, the watchdog said the "underlying issues" had not been addressed and there was no "detailed view" about how the system was supposed to work.

Amyas Morse, the head of the National Audit Office, said the "relatively high risk trajectory" was met by "weak management, ineffective control and poor governance".

'Missteps'

The project suffered a tragic setback earlier this year when Philip Langsdale, the DWP's chief information officer, died four months after taking over responsibility for it.

The man drafted in over the summer to take over the running of universal credit has admitted there have been "missteps".

"It's clear to me there were examples of poor project management in the past, a lack of transparency where the focus was too much on what was going well and not enough on what wasn't and with suppliers not managed as they should have been," Howard Shiplee told the Daily Telegraph - while claiming things had been "put right".

"I'm not in the business of making excuses, and I think it's always important to acknowledge in any project where things may have gone wrong in order to ensure we learn as we go forward," the former London 2012 executive added.

Labour accused ministers of trying to cover up a "Titanic-sized IT disaster" while trade unions said the watchdog's report was a "damning indictment" of the state of the project.

"Mr Duncan Smith swore blind this benefit shake-up was fine," said Labour's welfare spokesman Liam Byrne. "Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds.

"The Conservatives welfare revolution has now finally collapsed. It is now mission-critical that David Cameron and Iain Duncan Smith swallow their pride and agree to the cross-party talks we proposed in the summer. We cannot risk another day."


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