Universal Credit implementation: monitoring DWP's performance in 2012-13 - Work and Pensions Committee Contents


Summary

The Government decided in 2010 to simplify working-age benefits by introducing Universal Credit (UC). It will replace six existing benefits, including out-of-work benefits and housing benefit, and tax credits.It is estimated that, by the time it is fully implemented, UC will be paid to 7.7 million households.

We continue to support the policy objectives of UC, particularly improving incentives to work and smoothing the transition from benefits into work. However, there have been significant problems with developing the IT systems necessary to operate UC, leading to delays in its implementation.

This report assesses the impacts of the delays for claimants, and for value achieved for public money, and the prospects for more effective delivery of the UC programme in the future.

CHANGES TO UNIVERSAL CREDIT IMPLEMENTATION TIMETABLE

The Government began to implement UC from April 2013 in a "Pathfinder" (or pilot), in four Jobcentres in the North West of England. Claims in the Pathfinder were limited to new claims from single people in the simplest circumstances. National implementation was due to begin for all new claimants from October 2013, with claimants on existing benefits being migrated to UC in a staged process to be completed by 2017.

However, major adjustments to the implementation timetable were made in July and December 2013 because of IT and project management problems. National implementation did not begin in October 2013: claims remain limited to the Pathfinder Jobcentres (increased to 10) and to the simplest claims. New claims to UC are not now expected to be extended to the whole of Great Britain until 2016; the bulk of the migrationof existing claimants will not now take place until 2016-17; and the process will not be completed until after 2017.

Whilst it is essential to ensure that the system works effectively for claimants before it is extended, DWP needs to be clear and frank about all the implications of the delays. Due to the very slow pace of the roll-out to date, it is difficult to envisage how the volumes required to meet the most recent timetable are to be achieved.

DWP must set out: revised estimates of UC caseloads and costs for each year to 2017-18; and the future programme management and governance arrangements for UC. It should also set out details of the additional financial support which it will provide to local authorities to meet the costs of administering housing benefit until it is incorporated into UC, which will now take much longer than anticipated.

UNIVERSAL CREDIT IT SYSTEMS

The IT problems mean that £40 million spent to date on software has had to be written off because it is of no further use. The useful life of IT on which a further £90 million has been spent has been reduced from 15 to 5 years. This is regrettable.

The IT problems were only revealed when the National Audit Office (NAO) reported on progress with UC implementation in September 2013, although the Government had known about them for at least 18 months before this. It is concerning that it took so long for the Government to acknowledge openly that there were problems with UC IT and to make the necessary switch to a different IT approach—referred to by DWP asthe "end-state" solution, which will be open-source and web-based.

DWP is continuing to spend millions of pounds (£37-£58 million) on the old IT system during 2014 to extend the functionality for the Pathfinder while at the same time extensive sums are being spent on the IT for the end-state solution. DWP should consider again whether it would not be more effective, and represent better value for public money, to focus solely on the end-state solution and abandon the twin-track approach.

There remains a worrying lack of clarity about what the end-state solution means in practice. In the NAO's view these uncertainties include: how it will work; when it will be ready; how much it will cost; and who will do the work to develop and build it.

DWP needs to set out what the costs of developing the end-state solution beyond November 2014 will be, including how much will be spent on in-house IT specialists and on external consultants. It should also make clear when the end-state solution will be ready to test on a representative sample of claimant households; and when and how it will be extended.

SUPPORT FOR VULNERABLE CLAIMANTS

The Government has acknowledged that vulnerable people will need support to adjust to Universal Credit. However, there is much that has yet to be clarified about how this support will be provided and funded.

Although the public debate about UC in the last six months has been dominated by problems with IT systems, ensuring that vulnerable people are not excluded from, or disadvantaged by, UC should remain a priority for the Government.

The Government's2013 Local Support Services Framework (LSSF) set out, in very broad terms, plans for support for vulnerable people being provided in partnership with local authorities, housing providers and the voluntary sector. However, the initial version,and the more recent update, lacked detail on how it would operate in practice and crucially, on the amount of central funding that would be provided.

This lack of clarity to date is regrettable, particularly as the Government has acknowledged that the LSSF is "almost as important as Universal Credit itself". DWP must ensure that detailed information about the LSSF'sfunding and operation is set out when the final version is published in autumn 2014, to enable its LSSF partners to plan and budget for their new responsibilities.

DWP'S PERFORMANCE IN FACILITATING SCRUTINY OF UC

Effective scrutiny by select committees relies on government departments providing them with accurate, timely and detailed information. This has not always happened to date in relation to our scrutiny of Universal Credit implementation.

Our ability to scrutinise UC implementation was seriously impeded by DWP failing to inform us of the serious problems it was experiencing. It also, on two occasions, announced major changes to its implementation timetable at, or just before, evidence sessions, giving us no time properly to assess the implications in advance.

It is not acceptable for Ministers to provide information about changes to major policy implementation only when forced to do so by the imminent prospect of being held to account in a public select committee oral evidence session.

DWP should set out how it will improve the frankness, accuracy and timeliness of the information it provides to us, to ensure that it meets required levels of transparency,and that we are not hampered in trying to carry out our formal scrutiny role effectively.



 
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Prepared 9 April 2014