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Social justice
18 September 2013

Centralisation plus complexity: a fatal formula for welfare reform

According to the National Audit Office, the Government’s flagship welfare reform policy – Universal Credit – is in trouble. The purpose of the new benefit is to combine six existing benefits into a single payment, with the aim of ensuring that work always pays more than life on the dole.

Right in principle, the problems with Universal Credit are all in the implementation, especially when it comes to IT. Back in 2011, John Seddon wrote an open letter to DWP ministers to warn them that the standard Civil Service approach would end in tears.

Following the NAO report, it’s worth highlighting a few of the key paragraphs (the whole letter can be found on the Opportunities website):

  • “Let us be clear. This... is not about the concept of... Universal Credit...  It is about the design and implementation of its delivery. In this respect we should begin by underlining that there is much in the coalition’s approach to public-sector reform that we support.  Getting rid of targets and central directives, abolishing the Audit Commission and encouraging the development of locally relevant services are all positive moves.”:
  • “But the weakness in the coalition’s approach is the continuing unquestioning faith in economies of scale…”

Once again, the DWP has opted for a highly centralised approach facilitated by a shiny new IT system. What could possibly go wrong?

  • “It would appear to be a simple proposition: take costs out of service provision by putting the provision online and/or in a call centre. That these ‘channels’ represent cheaper transactions is not in doubt.  But it does not follow that overall the service will be cheaper to deliver.  The crucial factor is the complexity of the service.  When what is being delivered is simple and unvarying, moving it to telephone or internet channels may be effective.  When it is complex and variable, however, it is an expensive mistake, driving costs up and the quality of service down.”

The basic equation, which applies to just about any area of public policy, is as follows:  centralisation + complexity = disaster. Bitter experience has demonstrated the accuracy of this formula on countless occasions – and yet this Government, like its predecessor, is in thrall to what Seddon calls “command-and-control management”:

  • “[This is] the idea that services are merely ‘transactions’… It is a purely quantitative approach that leads service managers to focus on solving the following equation: How much work is coming in?  How many people do I have?  And how long do they take to do things? All work is treated alike as activity to be managed.”

If this were really true, then of course it would be possible to design a fixed system to deal efficiently with a limited number of interactions between the users and providers of the service in question. Furthermore the simplicity of the system would allow it to be centralised, thereby achieving the desired economies of scale.

But it isn’t true. Getting people off benefits and into work means dealing with complex personal situations and joining up the various bits of the public sector that support (but sometimes hold back) dependent individuals. It should be screamingly obvious that a flexible, face-to-face, locally-based response is what is required – which is precisely what you’re not going to get from a regional call centre.


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