2 Risks to delivering Universal Credit
16. In our last report on Universal Credit, we highlighted
a lack of openness and a flawed culture of good news reporting
in the Department, which had contributed to the failings that
led to the reset.[23]
The Department told us that both governance and leadership have
improved. Its senior leadership team was now spending vast quantities
of its time on Universal Credit, including regular visits to jobcentres
to see it working in practice. Staff survey results had also shown
an improved perception of the programme's senior management. In
2014, 70% of staff said that senior management encourages challenge
and welcomes their suggestions, compared to 30% in 2013; similarly,
in 2014, 75% expressed confidence in the actions of senior leaders,
compared to 30% the previous year.[24]
17. We observed, however, that a lack of openness
remains within the Department, as does an unwillingness to face
up to past failings. The Department refused to accept the extent
of previous failings, despite the overwhelming evidence we heard
last year that the programme's management had been extraordinarily
poor prior to the reset, and the small numbers claiming Universal
Credit.[25] Furthermore,
since early 2012, the Department has been fighting a protracted
legal case to prevent the publication of documents relating to
the management of Universal Credit. The Department argued that
if it published its risk registers, staff might become less candid
and therefore the efficacy of these important documents would
be reduced. However, it sought to use this same argument to oppose
the publication of its milestone schedules, even though having
these in the public domain would be helpful in making sure everyone's
expectations regarding progress were set in the right place.[26]
18. The Department's twin-track approach for delivering
Universal Credit is complicated. By April 2016, the Department
will be: using live service to provide Universal Credit nationwide
through 700 jobcentres to 500,000 people; running continued pilots
with couples and families in the North West of England; and trying
to scale up its new digital service.
At the same time, the Department and
HM Revenue & Customs will continue to run legacy systems for
existing benefits, including Jobseeker's Allowance and tax credits.[27]
This will be a significant challenge, and the Department said
that the programme's senior responsible owner is "already
up to his eyes" just preparing for live service expansion
in 2015.[28]
19. The Department needs to recruit 600 or 700 people
before February 2015, and to train about 10,000 by April 2016,
to roll out Universal Credit nationwide to jobseekers with more
straightforward claims. The Department is confident that it can
do this. It has acknowledged, however, that the training approach
it used during 2014 to successfully expand Universal Credit across
North West England would not be feasible on a national scale,
and it has sought to make savings by identifying a more cost-efficient
approach to training. The Department has reduced its planned training
budgets by 68% (from £117 million to £37 million) up
to April 2016, and it has also halved the time it allows new staff
to familiarise themselves with Universal Credit, reducing costs
by £14 million.[29]
The Department, however, was unable to explain how it would maintain
its current quality of service when Universal Credit is dealing
with hundreds of thousands of people in the future, compared to
fewer than 18,000.[30]
20. Since the reset, the Department has struggled
to attract suitably qualified staff to develop the digital service
in-house. As a result, the development of the digital service
has already fallen six months behind schedule, and the Department
has barely started testing it. The Department explained that during
the current six-month 'test the service' phase, it intended to
examine how claimants react to the digital service, and whether
the new system can cope. The Department plans to follow this with
two more six month phases, firstly to improve efficiency, and
then to make the systems scalable, before digital service is launched
nationally in 2016.[31]
21. Although the Department said it would continue
to proceed carefully and only when it was confident the next step
was doable, both it and HM Treasury think it is a fair assessment
that Universal Credit will be delivered in 2019.[32]
The Office for Budget Responsibility, however, has assumed there
will be a further six month delay to the digital service, in its
independent estimates which accompanied the 2014 Autumn Statement.
HM Treasury explained that the Office for Budget Responsibility
had reached this view because the latest Major Projects Authority's
review of Universal Credit, in September 2014, had given the programme
an amber-red rating and raised a number of uncertainties about
it.[33]
22. Some landlords and claimants have struggled with
rent arrears where housing costs have been incorporated into a
single Universal Credit payment made directly to claimants. Housing
associations across the country have highlighted possible 50%
increases in rent arrears as a result, and some have established
provisions in their budgets to account for this.[34]
23. The Department explained that it had set up a
number of projects across the country, working with local authorities,
to look at what happens when benefits such as Housing Benefit
are paid directly to claimants. At the time of our evidence session
the Department was unable to discuss the findings of these projects,
as the results had not then been published. Nevertheless, it did
describe how, when introducing direct payments in the private
rented sector between 2008 and 2010, it had designed a payment
system for vulnerable people which allowed it to identify problems
quickly, keep people in their homes and ensure landlords did not
suffer a massive growth in rent arrears. The Department also explained
that while direct payment to the claimant would be the default
position, in some cases it would retain the option of paying the
landlord instead.[35]
24. After our evidence session the Department published
the findings of its 'Direct Payment Demonstration Project' and
the Department wrote to us with a summary of these findings. We
were disappointed that the Department was rather selective in
its summary. For example it chose not to mention that: 72% of
tenants on Housing benefit said they preferred it to be paid to
their landlord directly; the proportion of tenants reporting they
were behind with their rent increased from 16% in summer 2012
to 30% in early 2014; and 5 of the single most important reasons
for rent arrears were related to the direct payment of Housing
Benefit.[36]
25. The Department confirmed that the Smith Commission's
report on the further devolution of powers to the Scottish Parliament
said that the Department would continue to run Universal Credit
on a UK-wide basis. However, the Department explained that the
Commission had identified scope for the Scottish Government and
Scottish Parliament to vary some, mostly housing-related, aspects
of Universal Credit, such as the under-occupancy charge. The Department
said it now had to work out with the Scottish Government how to
accommodate this flexibility, including who would build and fund
a second system capable of operating a modified Universal Credit
which had different parameters depending on where a claimant lives.[37]
23 Committee of Public Accounts, Universal Credit: early progress, Conclusions and recommendations, paragraph 4, and Part 1, paragraph 9 Back
24
Qq 102-103, 114 and 118; C&AG's Report, paragraph 4.4 Back
25
Qq 141-142; Committee of Public Accounts, Universal Credit: early progress, Conclusions and recommendations, paragraph 2 Back
26
Qq 120-125 Back
27
Qq 72 and 126-127; C&AG's Report, Figures 4, 10 and 11 Back
28
Q 113 Back
29
Qq 98-99; C&AG's Report, paragraph 3.17 Back
30
Q 103 Back
31
Q 73; C&AG's Report, paragraphs 2.16 to 2.17 Back
32
Qq 20, 105 and 113 Back
33
Qq 18-19; C&AG's Report, paragraph 1.11 Back
34
Qq 131 and 135; C&AG's Report, paragraph 3.7 Back
35
Qq 129-130 Back
36
Written evidence from the Department for Work and Pensions, January 2015;
https://www.gov.uk/government/publications/direct-payment-demonstration-projects-final-reports Back
37
Qq 109-111 Back
|
