List of conclusions and recommendations
In this List, conclusions are set out in plain type,
and recommendations, to which the Government is required to respond,
are set out in italic type.
1. We have previously
expressed support for the policy objectives of Universal Credit,
particularly improving incentives to work and smoothing the transition
from benefits into work. We continue to support these aims. However,
there have been significant problems with developing the necessary
IT systems and processes to implement UC. This led to the implementation
timetable and process undergoing major adjustments in 2013, meaning
that the bulk of UC implementation will not now take place until
2016-17. This report assesses some of the implications 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. (Paragraph 11)
Progress with Universal Credit implementation
2. The Government
has made significant changes to the UC implementation timetable—first
in July 2013 and then again in December 2013. Whilst we strongly
support the aim of ensuring that the system works effectively
for claimants before it is extended, DWP needs to be clear and
frank about all the implications of the changes. The governance
concerns raised in 2013 still remain. Due to the very slow pace
of the roll-out to date, it is also difficult to envisage how
the volumes required to meet the most recent timetable are to
be achieved. (Paragraph 30)
3. DWP told us
that it intended to clarify the impact of the changes to the implementation
timetable on the overall costs and savings of the programme in
the revised Business Case for Universal Credit, which it has now
presented to the Treasury. We recommend that DWP makes its revised
Business Case available to this Committee. We further recommend
that, in its response to this Report, DWP 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. (Paragraph
31)
4. Local authorities
need greater clarity on the implications for them of being required
to continue to administer Housing Benefit for longer than anticipated,
due to the delays to Universal Credit. We recommend that, in response
to this Report, DWP sets out the details of the financial support
which will be provided to local authorities in 2014-15 and 2015-16
to cover the additional costs of continuing to administer Housing
Benefit. (Paragraph 33)
Problems with Universal Credit implementation and
IT development
5. It is regrettable
that £40 million has been wasted on IT software for UC that
now has no use. The useful life of IT on which a further £90
million has been spent has been reduced from 15 to 5 years. DWP's
view is that this is a normal feature of IT development, including
in the private sector. Whilst we understand that delivering UC
is very complex, and that the development of any major new IT
system will inevitably suffer setbacks, it is concerning that
it took so long for DWP to acknowledge openly that there were
such serious problems and to make the necessary switch to a different
approach. There also remains a deeply concerning lack of clarity
about what the new digital or "end-state solution" for
UC IT means in practice. The NAO's view is that 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. (Paragraph
49)
6. DWP is now pursuing
a twin-track approach to UC IT. This means that further money
(£37-£58 million) will be spent on the existing IT system
in the Pathfinder so that it can be extended to couples and families
during 2014. At the same time, DWP is funding the development
of the end-state solution. Some £25-£32 million has
been allocated for this to November 2014, and presumably it will
cost much more as the programme continues, although no figures
for this expenditure are yet available. (Paragraph 50)
7. The end-state solution
will first be tested on 100 claimants and DWP is still some way
from being in a position to take this small step. Although we
agree with an incremental approach, there is a difference between
sensible caution and a snail's pace. It will only be possible
to prove that the end-state solution will work for the millions
of households which will eventually claim UC when the IT can be
tested at scale. (Paragraph 51)
8. At the outset of
the UC project, DWP assured us, Parliament and the public that
this scheme would be able to avoid the problems of previous government
IT projects. It is crucial that future reports and updates use
clear, plain-English explanations of the plans and outcomes, so
that we can judge whether this is the case. (Paragraph 52)
9. We recommend
that, in response to this Report, DWP provide more details about
what the end-state solution for UC IT means in practical terms.
It should also set out its latest estimate of the costs of developing
the end-state solution beyond November 2014, including the separate
costs of employing additional in-house IT specialists; and of
contracts with external consultants and IT providers; andwhen
the end-state solution will be ready to test on the first 100
claimant households; when and how it will be extended to a more
representative number of claimants; and when it is expected to
be fully implemented.We also recommend that, in light of the small
number of claimants currently receiving Universal Credit and the
slow progress, DWP 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.
(Paragraph53)
Support for vulnerable claimants
10. The Government
has acknowledged that vulnerable people will need support to adjust
to Universal Credit. It has set out in its Local Support Services
Framework (LSSF) how it envisages this support being provided
in partnership with local authorities, housing providers and the
voluntary sector. However, the initial version of the LSSF published
in 2013 lacked detail on how it would operate in practice, including
the funding arrangements. We regret DWP's lack of progress in
giving its LSSF partners a clear indication of the additional
responsibilities they will be expected to take on under this new
arrangement and, crucially, the central government funding they
can expect to receive. The Government has acknowledged that the
LSSF is "almost as important as Universal Credit itself".
We recommend that it therefore ensures that detailed information
about its operation and funding is set out when the final version
of the LSSF is published in autumn 2014. (Paragraph 60)
DWP's co-operation with the scrutiny process
11. 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 the
problems with Universal Credit implementation. It is not acceptable
for Ministers to provide information about changes to major policy
implementation to this Committee, and indeed to Parliament and
the public more broadly, only when forced to do so by the imminent
prospect of being held to account in a public oral evidence session.
We recommend that, in response to this Report, DWP sets out how
it will improve the frankness, accuracy and timeliness of the
information it provides to us, to ensure that it meets the required
levels of transparency between the Government and select committees,
and that we are not hampered in trying to carry out our formal
scrutiny role effectively. (Paragraph 71)
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