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

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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