IDS is pressing ahead with Universal Credit by 2017

By Harry Phibbs
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A difficult day for the Work and Pensions Secretary Iain Duncan Smith with a critical report from the National Audit Office on the implementation of the Universal Credit leading the news bulletins.

The Government is certainly being ambitious over the scale of the project and the timescale for implementing it.

The scheme will rely on the HMRC providing "real time information" on tax reductions to the DWP - so that the level of benefits can be adjusted to ensure work pays. Tricky. To add to this Mr Duncan Smith has been let down by some of his civil servants - not only in failing to achieve the progress they promised but then, as Paul Goodman has noted, resorting to deception over their lack of progress.

Some may take a sanguine view. Dogs bark, cats meow and Whitehall IT projects go over budget. Perversely the attitude of Ministers is less forgiving over such lapses than the shrugging from the media and the public. Certainly the offer from the Shadow Work and Pensions Secretary Liam Byrne for cross party talks to "rescue" the scheme is risible. It was the Labour Party that wasted £12 billion of our money on an NHS computer system project that was scrapped.

Yet the Government will not want to judged by the standards of their predecessors. The Cabinet Office Minister Francis Maude is not passive over civil service failings or inefficient Government procurement.

I understand that Mr Maude and Mr Duncan Smith have been working effectively together to sort this out. Rather ironic given that when Mr Duncan Smith was the Conservative leader it was Mr Maude who led the plotting for a replacement.

Interviewed on the Today programme this morning Mr Duncan Smith insisted the Government's flagship Universal Credit reform would be delivered on time and within budget:

"We're not asking for a penny more. It's not like the health department fiasco under the last government or the failure to get the CNET changes right under the last government where they lost billions and cancelled the programme. This will be delivered within budget and within the timescales originally set out."

That is bold stuff. Mr Duncan Smith has built up a lot of goodwill over welfare reform. This is both in terms of the proof of his personal commitment and to how it has already started to prove its effectiveness. If he had said that due to some technical difficulties implementing the Universal Credit would cost a bit more or take a bit longer than hoped but it was still right to go ahead many people would have been sympathetic.

The rewards are huge - achieving a system where people were better off working than on benefits and ensuring that those in genuine need had an intelligible way of getting the required help. The savings that will be provided when Universal Credit is up and running are estimated to be £7 billion a year. Isn't it right to proceed even if the implementation costs overrun by £34 million?

Yet Mr Duncan Smith is not relying on this line of thinking. He evidently believes that the Government can catch up over any delays, that they claw back the money - savings to get back on budget.

Mr Duncan Smith added: 

"I take responsibility for all of our welfare reforms - that's what I came in to institute. So we, I believe, have been actually successful across the board in general terms about reducing the costs of welfare - you know, the reports last week showed that now we have fewer households who have been out of work, without work; fewer people who have been long term, as it were, out of work generationally changed. So big changes and we're saving up to £80bn in our reforms so these are big success stories about reforming welfare that the last government left in a total mess.

"This universal credit programme is one of the key programmes - there are four or five other big IT programmes which are all on time and all going to deliver on time. But this one looking at it back in 2011, so this report is historic. So I took a look at this back in 2011 and I was concerned that some of the reporting up to me was not telling me the whole story about what the focus was and where it was going so I instituted my own internal report which reported back to me at the beginning of 2012 and told me that there were issues about the sense of direction and what they were designing that would deliver us the kind of changes that were necessary to deliver Universal Credit correctly.

"I immediately acted. People were got rid of and we brought in somebody from outside, the key person Philip Langsdale, who started the reset; we continued to press ahead to develop the pathfinder, which I instituted by the way in 2011 as a change to the programme. And then when he died we brought in David Pitchford from the Cabinet Office and now Howard Shiplee has come in from outside, who delivered the Olympic Park - all of those three key characters have said to me from the beginning when they looked at this programme that, with the reset, this would be delivered on time and we would be able to deliver this in budget."

He said the pilot results have been encouraging:

"In the pathfinder, it's demonstrating that the IT that we put forward for this actually works. The other bit of this, by the way, which we were told two years ago was going to be a problem is working perfectly is the RPI feed, which came from the payroll from HMRC is now plugged into Universal Credit in these pathfinder areas and we're already finding people would actually claim the Jobseeker's Allowance but actually we would find out immediately that they were already in work.

"So there are big changes already happening with this and it is working and the plan is that we will roll this out within the timescale. It is the belief of all of those - Howard Shiplee, for example, wrote in the Telegraph two days ago that, having come in, having delivered the Olympic Park early and well under budget, he said this programme should be delivered within time and from what he's seen and what he believes now will be delivered correctly and rolled out under budget."

A DWP spokesman adds:

The report does not cover the significant developments we’ve made since April including the go live in Greater Manchester, our progress on the IT challenge, the latest plans for expansion from October, or the fact that we brought in 2 of the country’s leading project management experts to lead Universal Credit.

The National Audit Office itself concludes that Universal Credit can go on to achieve considerable benefits for society. 

It is true it is early days. The NAO says:

Universal Credit is a key programme for the Department, and it is still entirely feasible that it goes on to achieve considerable benefi ts for society. But to do so the Department will need to learn from its early mistakes. As it revises its plans the Department must show it can: exercise effective control of the programme; develop sufficient in-house capability to commission and manage IT development; set clear and realistic expectations about the timescale and scope of Universal Credit; and, address wider issues about how it manages risks in major programmes.

Nobody can read the NAO report without wincing. Of course the buck stops with Mr Duncan Smith. So I repeat this is a difficult day for him. But he will live to fight another day. It would be quite unreasonable to take anything in the NAO report are justifying abandoning the policy of introducing Universal Credit. The glitches are embarassing but the NAO said they can be sorted out. The DWP says they already are being.

Mr Duncan Smith is entitled to be very proud to be introducing Universal Credit despite these problems. The process has been problematic and we wait to see if it has been sorted out as claimed. If it has not then it needs to be. But the substance is right. The Government must press ahead with it.