Public Accounts Committee – ‘Universal Credit delayed, inflexible and underdeveloped’

SUMMARY:

The influential Public Accounts Committee has once again released a damning report looking at the shortfalls of the government’s welfare reform project – Universal Credit.

Universal creditThe government’s welfare reform project, Universal Credit, has once again been heavily criticised by the influential Public Accounts Committee for being delayed, inflexible and underdeveloped. In a report out today, MPs on the Committee brought to light a number of ongoing issues with the controversial roll-out.

It states that the government is still “unwilling to put sufficient information on Universal Credit in the public domain” – and considering the Committee’s findings, it’s perhaps easy to understand why.

Universal Credit was announced back in 2013 and plans to merge six current benefits into one single payment, which the government hopes will better incentivise people to return to work when unemployed and will also result in close to £7 billion worth of savings a year.

It is these savings that has allowed the government to persist with the project, despite a number of set-backs to the roll-out. For example, the government has had to write off over £100 million of IT assets built by the original suppliers and admits that it isn’t entirely fit for purpose.

Following the failure of the original system to scale up, a new ‘digital’ version of Universal Credit has been being developed in-house by the Department for Work and Pensions.

Earlier this year think tank The Resolution Foundation said that Universal Credit had “serious design flaws” and had “veered off track”.

And if the MPs findings this week are anything to go by, it wasn’t wrong. For example, the Department for Work & Pensions has announced yet another delay to completing the roll-out of Universal Credit, which it attributes to policy changes announced a year ago.

The system was already experiencing delays, having been pushed back to March 2021. However, now it seems that the Department believes that it won’t be completed until March 2022, given announcements made in the summer Budget 2015.

The Committee rightly points out that if the Department now has an agile and flexible approach to development, why can these policy changes not be easily introduced? It said:

But a flexible system should be able to cope with a degree of policy change. The Department needs to be clearer about what policy change it can incorporate without delay. Given the length of time taken to implement the programme some policy change is likely and we need a clearer picture of the impact on timetable.

The Department should explain why its flexible approach to system development has been unable to accommodate policy changes announced in July 2015 and should set out clearly what impact these delays will have on operational costs, staff and claimants on both Universal Credit and legacy systems.

Furthermore, the Committee heard evidence that the Department’s approach to test and learn in the development process, was struggling to work effectively. The report notes:

We received written evidence from the Public and Commercial Services Union (PCS) on behalf of Department for Work & Pensions staff. It described the Department’s “test and learn” approach as ‘broken’. The PCS considered that the elements of the test and learn approach, which is supposed to allow staff to test the systems and feed back their views and ideas for improvements, were no longer feasible.

The PCS argued that time pressures have resulted in an inability of front-facing staff to assist in ironing out any problems with Universal Credit full service, as fewer staff are able to report what is going wrong or what could be improved though the Department’s Continuous Improvement and Learning programme.

Pressure

web-universal-credit-alamyAccording to the Public Accounts Committee, DWP has now spent £1.16 billion on implementing Universal Credit, which has a caseload of around 280,000. This is compared to the over 6 million claimants that are expected when it is fully rolled out.

It also found that the systems supporting Universal Credit are still “underdeveloped” and there are signs of increasing pressure on staff. The Committee said that there was still a long way to go before systems will be ready to scale up significantly – claiming that only, for example, only 25% of claims in the new full service are paid automatically.

Equally, the Committee heard how the system’s rigid monthly assessment period has caused difficulty for claimants who are paid or pay rent on a timetable that differs to this. The Department’s approach appears to be to try and persuade employers and landlords to change their practices, rather than seeking to make its own systems more flexible – an approach which the report describes as “unlikely to be feasible”.

The report also outlines how DWP’s approach to measuring fraud and error in Universal Credit leaves a lot to be desired. It states:

While the Department expects Universal Credit to reduce fraud and error overpayments by £1 billion a year when it is fully rolled out, initial estimates indicate that the level is currently higher than the Jobseeker’s Allowance that it is replacing.

The Department attribute this to the difficulty of developing a suitable methodology to measure fraud and error in Universal Credit, as the new benefit is designed to support both those in work as well as those out of work, and to cases where the Department was unable to contact claimants to verify the payment made. The Department does not regularly measure fraud and error across all its other benefits; for example, fraud and error in the payment of Carer’s Allowance has not been measured for 20 years.

My take

Whilst the need for welfare reform generally has support across all political spheres, the rollout of Universal Credit has been plagued with disruption. The Department for Work and Pension’s lack of desire to share information about progress is worrying. As is the number of delays and the reports of problems with the underlying system as it scales up.

My concern is that 2022 is a long time away – a lot can change in six years. If the current system is facing delays because of changes to policy in one summer budget, what will six years of political disruption (particularly in the face of Brexit) mean for Universal Credit? Is it resilient enough to stand up? Moving from 280,000 claimants to 6 million is a big jump and from what I can tell, the system still faces huge challenges in terms of flexibility.

Image credit - Images sourced via the Department for Work and Pensions