Universal Credit: The human cost of the UK's new “unworkable” welfare system

Derek du Preez Profile picture for user ddpreez October 27, 2014
Universal Credit was introduced to simplify the UK benefit system, but a new Channel 4 documentary points to a number of worrying problems.

In recent years there has been a growing trend towards building big, complex systems in an agile way – whereby instead of flicking a switch and going for a

big bang, systems are created through the process of iteration. The idea being that an iterative approach allows the system to be tested and for flaws to be ironed out before the pressure of going ahead with a full scale rollout, which is all very sensible of course.

This was certainly the thinking behind the UK government's £2.4 billion welfare reform project, Universal Credit, which aims to merge the six main social security payments into one single payment that flexes up and down in a seamless way when a claimant dips in and out of work.

Instead of rolling out Universal Credit to the millions of claimants across the UK, the Department for Work & Pensions had the idea to begin rolling out the system to a few 'pilot' areas to test its resilience and slowly scale it up. Starting with simplest of claimants – single, non-home owning, unemployed people, without children – the Universal Credit system was then going to expand across geographies and build up its capabilities.

However, as we all know, the programme has been beset by problems, tens of millions of pounds of software has been written off and political agendas have meant that the Department is now toying between the original system, which was built by a number of big IT suppliers and was found to be unscalable and have security issues, and a new digital end-state solution that is being built by a dedicated team in-house.

A few months ago it was pretty clear that DWP would be eventually replacing the original system with the new digital version, which was tackling the complexities of human behaviour from the start (see my piece here on the issue); but having spoken to the department this morning it seems that this may no longer be the case. A spokesperson said to me that the digital version will in fact be incorporating the capabilities of the current IT system being used in the pilots – is this a deliberate change in tone from the Department?

Not only this, but Margaret Hodge, chairman of the influential Public Accounts Committee, has now suggested that the next government will have to write off approximately £500 million worth of Universal Credit IT investment – over £300 million more than what has been written off thus far. Veteran public sector IT journalist Tony Collins has also done an excellent write up of the political tensions surfacing in the depths of Whitehall and looks at how the Universal Credit system could have been oversold to the Treasury.

With the future of Universal Credit looking uncertain, a useful reminder of the importance of getting this project right was aired last night on Channel 4 in the UK – a Dispatches documentary that not only looked at a number of the pilot claimants that are using the new Universal Credit system, but also the challenges faced by job centre staff and those in the service centres having to process the claims. The documentary painted a somber picture of the future of benefit claiming under Universal Credit, as the system currently stands.

The claimants

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Channel 4's Dispatches investigates Benefits Britain

What was brilliant about the Channel 4 documentary was that it reminded us that whilst this is a multi-billion pound IT project and that many have focused on the money being wasted and the political fun and games – ultimately this is a system that serves those that are vulnerable. Getting it wrong isn't going to mess up a some business process or impact the bottom line, it can make the difference between someone being able to feed their child or pay their rent. Let's take a look at some of the examples provided:

Connor – a young man with moderate learning difficulties explained the difficulties he experienced in claiming Universal Credit. His foster mother explained during the show that the forms didn't take into account Conor's position and so they ended up “just ticking boxes” that were closest suited his situation. Both claim that staff at the job centre were “baffled” by the system and that when Conor did pick up some work, he was told he was no longer entitled to Universal Credit (despite the main selling point of the new system being that it flexes payments based on when you pick up work). Conor's foster mother said:

It got to the point of us almost being in tears, if that's simple I'd hate to see it when it's difficult. Between us, the Citizen's Advice Bureau, social agencies, we just couldn't get it right.

Connor said:

If I had to do this by myself, I wouldn't be able to cope. It's too stressful at the end of the day. I wouldn't get the questions, I wouldn't get what they were asking me.

The end result was that Connor had to claim benefits under the OLD (income support) system and had to have his payments back dated. DWP staff apologised and said that they were also, in fact, confused about Connor's entitlement.

Jay and Nikki – Jay was living on his own and claiming Universal Credit, but then decided to move in with his partner Nikki and their young son. The Job Centre told the couple, who were expecting another baby, that they would be treated as joint Universal Credit claimants. Nikki said during the show that everyone at the Job Centre had told her that the system was very complex and that the training hadn't been there for them to know what to do.

The switch from single claimant to joint caused problems and the claim kept getting passed from the Job centre to the service centre, and neither would process the payment. Jay and Nikki ended up in arrears and claim that they were living off packets of crisps and coffee. DWP disputes the claims and state that Nikki and Jay had failed to fill in the correct forms – whilst Job Centre staff had told them that they were now only receiving the correct money because the claim had been processed by hand.

Sean – Sean had been working as a security guard for five years, but in March found out he was being made redundant. Under the old benefits system, social security payments were made directly to landlords to cover rent. However, under Universal Credit, rent money is paid directly to claimants who then are expected to budget and pay landlords themselves. Having been in work for the past five years, Sean claims he was unaware of this change and assumed his rent had been being paid. He said that he had asked for a a breakdown of what Universal Credit covered, but never received it and eventually built up £800 worth of rent arrears. He said:

Waiting, contacting, waiting, contacting - for three months. Nothing. I should have been a bit more clued up, but I'd been in work for the best part of 5 years and assumed rent was taken care of.

Whistleblowers, the CAB and landlords

During the Dispatches documentary, a number of other people interacting with the system were interviewed to get their take. Steve Cullen from Warrington's Citizen's Advice Bureau, based in the area the above claimants live, also didn't have many positive comments about the new Universal Credit system. He said:

If you can't iron out the problems with straight forward claimants [sic], at the moment we are seeing that if peoples' situation changes, the system doesn't appear to be coping seamlessly with that. If we rolled it out to people with disabilities, families with children, vulnerable people - to my mind it would just compound the problems.

Golden Gates Housing Trust, one of the biggest landlords for social housing in the area, also said that vulnerable claimants aren't being given advice and help with budgeting, as was promised by the Department for Work and Pensions. Peter Fitzhenry from Golden Gates said:

We are only aware of one or two tenants that have been offered personal budgeting support. I think a lot more work needs to be done so that people who are vulnerable get the help that they need to make a success of Universal Credit.

Channel 4 also did its own survey to find out how the new system of claimants paying their own rent is working, where it asked seven of the UK's main

landlords about how it is impacting rent arrears. Channel 4 found that under the old benefits system five out of ten people in social housing across the UK are in arrears, whilst amongst tenants on Universal Credit, that figure jumps to just under nine out of ten. Not only this, but almost all are facing court proceedings.

Fitzhenry said that when Golden Gates is receiving payments directly under Universal Credit, the process isn't going smoothly. He said that often they are receiving payments that are incorrect or without names attached and it is still owed money. Fitzhenry said:

It requires manual intervention from staff to send money to us and unfortunately there have been cases where money has gone to the tenant and arrears have grown. We have identified a number of payments where the amount has been received and has meant that we have to spend time redoing the sums that DWP has done.

Channel 4 also managed to get hold of a leaked memo from a manager at one of the service centres processing Universal Credit claims, which was entitled “Ideas please. Sinking”. The manager outlined how she couldn't cope with the workload and at the time had 402 cases to get through, but thought it was only possible to process 130.

Meanwhile, a whistleblower from one of the Job Centres told Channel 4 that the training for Universal Credit “isn't relevant anymore” and that the “IT system is completely unworkable, badly designed, out of date and lets [staff] down”. The whistleblower said that the system works for single claimants, but anyone else has to be done manually, which is slow and is easy to get wrong.

The documentary makers also interviewed Mark Harper, the minister for DWP, who was decidedly upbeat about the progress of Universal Credit. He said he had visited one of the service centres processing claims and had been “pleasantly surprised” with how things were progressing and that the system had been rolled out in a way so as to learn from problems at the beginning.

A DWP spokesperson told me this morning:

Universal Credit’s IT system is robust and effective and we have trained 26,300 work coaches who are successfully providing new support to claimants to help them better prepare for work.

We are rolling UC out in a safe and controlled way to ensure we can make changes to the system if necessary. But there is absolutely no evidence that cases cannot be dealt with.

When fully rolled out, UC will make 3 million families better off by £177 a month and lift up to 300,000 children out of poverty.

My take

I'll admit that when I've written about Universal Credit in the past, I've not fully taken into account that this is a system that is going to directly impact people that are in need. Silly, I know, but it's easy to get wrapped up in the political games. It's not just another business change programme and as the presenter on Channel 4's documentary highlighted, test and learn is all well and good, but there is a human cost here.

I've got two main concerns – the politics involved and the problem of complexity. Secretary of State for DWP Iain Duncan Smith put his neck on the line for Universal Credit. It wasn't a popular project in the Treasury or the Cabinet Office, but Duncan Smith made promises that it would not only simplify welfare but also save millions. Now it's looking like there is the potential to waste millions and simplicity isn't particularly obvious.

What I hope is that this doesn't impact the potential to turn the project around with the digital end-state solution. The original IT focused on building a system that considered the simplest of claimants, which was then going to be built up over time. However, given the complex nature of humans and their work, this doesn't seem to be proving to be the best approach.

From what I understand, the digital-end state is focused on building in all of this complexity from the start, with the idea to then start small for all types of claimants and scale up from there.

However, the change in tone at the DWP press office this morning worries me. If DWP is going to stick to the original IT for the fear of writing off hundreds of millions of pounds, which would no doubt cause a considerable media backlash, I hope it remembers that this is a system that is directly impacting people that need it to work.

For once, let's put aside the politics and actually focus on how we can make Universal Credit sustainable and scalable. Because if we don't, DWP will have much bigger problems on its hands than some wasted money.

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