Universal Credit: early progress - Public Accounts Committee Contents

2  The future development of Universal Credit

13. Since February 2013 the Department has revamped the entire structure of the Universal Credit team and has been working to address the extensive problems faced by the programme.[25] It expects to submit revised plans for approval by the Cabinet Office, HM Treasury and ministers in late 2013. The Department is developing these plans, and it continues to work to tight timescales as it still aims to meet a 2017 completion date.[26] The Treasury and the Major Projects Authority told us they plan to use the criteria they apply to all projects, such as affordability, deliverability within timescales and appropriate management arrangements, when reviewing these revised plans.[27]

14. The Department remains uncertain about key details of its final plans. It does not know how much can be delivered online, when this will be available, and what activities will continue to require face-to-face meetings.[28] The Department also does not know what the final cost of the IT will be, or the savings the programme is expected to deliver.[29] Nor does it know when it will close down the other benefits that Universal Credit will replace.[30]

15. The Department has a target of enrolling 184,000 claimants on Universal Credit by April 2014, and it launched a limited pilot scheme, called Pathfinder, at Ashton-under-Lyne in April 2013. The Department expanded Pathfinder to three further sites during July, and it will add six more in October 2013. The current rate of progress is significantly below target, however. Only around 2,500 claimants were registered at the time of our hearing in September, and the Department was unwilling to speculate what number will be enrolled by next April.[31]

16. Both the Department and Major Projects Authority expect the Pathfinder pilot to provide some information about how claimants might respond to the changes introduced by Universal Credit.[32] The Department is also using Pathfinder to ensure that new software systems can be linked effectively to those which it already has.[33] However, the scope of Pathfinder is much narrower than originally planned, it covers only the simplest new claims, includes very limited IT functionality and cannot be scaled up to deal with the number and complexity of claimants Universal Credit will ultimately need to accommodate.[34]

17. The Department will need an effective online system to handle more claimants and become fully operational, but the need for manual intervention in particular has limited the volume of claimants it can handle.[35] Pathfinder is restricted to single people, who are unemployed, who have no children and who would otherwise be claiming Job Seeker's Allowance. It can only handle changes in claimants' circumstances manually rather than through the IT systems it is using. It cannot handle the claimant conditionality imperatives the Government wants. Yet when in a steady state Universal Credit is expected to deal with 10 million people in about 7.5 million households, making 1.6 million changes in circumstances each month.[36]

18. A significant factor that has limited Pathfinder's IT functionality is that it lacks the identity assurance and anti-fraud components that the full system will need. The Department is aware that the system must include suitable security arrangements if Universal Credit is to operate effectively and deliver its intended benefits.[37] However, the Department has not yet finalised such a solution, and was unable to say when two key components—those countering fraud and error and confirming claimants' identity—would be completed.[38] The Department has found it particularly hard to establish the right balance between security and usability. The development of an effective security system has been hindered by security not being integral to the design of IT components from the outset, but instead being retro-fitted into systems, and suppliers working on different assumptions and to different standards. To address this, the Department told us it has now brought security issues together in one place, with one senior official responsible for overseeing this part of the programme.[39]

19. Some of the IT assets that have been delivered cannot be used in the programme. So far £34 million has been written-off, but this is based on an incomplete impairment review that relied on supplier self-assessment. The full extent of the final write-off was unknown at the time of our hearing, although during the reset the Major Projects Authority assessed that any write-off would be sizable, and told us that in could be at least £140 million. [40] The Department told us that it is using the majority of the IT developed so far in Pathfinder, and that it has established that suppliers have developed systems that were more advanced than those in use, but they had scaled them back because of the unresolved security issues. The Department is considering to what extent these systems are usable in the long term.[41] However, the Major Projects Authority advised that while the Department will want to salvage as much of its expenditure to date as possible by reusing systems developed so far, this should not be to the detriment of Universal Credit as a whole.[42]

25   Q213 Back

26   Q158; C&AG's Report, paragraphs 2.4-2.6 Back

27   Qq84, 160 Back

28   Qq152-157, 210-212, 225-227 Back

29   Qq189-191, 215 Back

30   Qq228-229 Back

31   Qq220-221; C&AG's Report, paragraphs 12-13 Back

32   Qq7, 54, 96 Back

33   Qq7, 54, 95-96, 101 Back

34   Qq3, 43 Back

35   Qq40, 223 Back

36   Q3 Back

37   Qq122, 130, 195 Back

38   Qq12-13, 123, 161 Back

39   Qq27, 128, 217-218 Back

40   Qq16-20. Q53 Back

41   Qq111-112, 118, 120-121, 135, 211 Back

42   Qq21, 55 Back

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© Parliamentary copyright 2013
Prepared 7 November 2013