27.The Department has been consistently over-optimistic about the time it would take to roll out UC. According to its initial plans, the programme should have been complete by October 2017. These delays continue: following the November 2017 Budget, the digital service will be rolled out to ten Jobcentres per month between February and April 2018 compared to over 60 per month in previous plans.
Progression of UC rollout assumptions
28.Delays are not simply an embarrassment to the DWP: they are also expensive. The digital service is expected to be “predominantly online, integrated and accurate” and result in major savings from automation and self-service. The Department is expected to reduce numbers of administrative staff by 11,000, more than 25% of the total. The NAO noted in its November 2014 report that a six month delay to the digital service reduced the net benefits of the programme by £2.3 billion. The NAO estimated that, in staff costs alone, the digital service would be £610 million a year cheaper than using existing live service systems. The live service was expected to help develop operational capacity in Jobcentres. As the DWP acknowledged, however, its use as a learning tool would be limited. Its largely manual operation would only give limited insights into the feasibility of delivering a national digital service on the timetable planned and with the levels of automation required.
29.The UC digital service is currently operating with more staff and fewer claimants than the DWP expected. This makes it expensive to run. The March 2017 AAP found that costs per claim were £963 in January 2018. This was a substantial decrease on the £1,750 in April 2016, but still almost four times the target of approximately £250 by May 2019. The September 2016 HC cautioned that delivery of the programme was “at risk” if a significant proportion of the service did not become automated, because costs would “become prohibitive”.
30.An important component of automation is claimant identity verification. As early as November 2013, the PAC expressed concern about when software to confirm claimant identity would be available. In its 2015 digital service trials, the Department intended to use Verify as an alternative to the face-to-face identification used in the live service. Verify is an identity assurance service, promoted by the Cabinet Office, which was developed for use across government. The September 2016 HC identified the performance of Verify, which had caused problems in a wide variety of fields, as a major risk to the programme. The IPA found that “assumptions based on insight work into customer journey are not at all aligning with reality”. Only 29% of UC claimants could complete the Verify process, and the levels of manual activities involved for the remainder were “not sustainable at scale”. These findings were echoed in the March 2017 AAP. Around 30% of claimants were completing the Verify process, compared to an original projection of 80% and the target of 60% for the accelerated rollout in October 2017.
31.The September 2016 HC identified “a workable ID assurance solution” as one of four “critical success factors” necessary before the digital service should be rolled out to 29 Jobcentres in July 2017, the first major “scaling event”. The March 2017 AAP stated clearly that the condition had not yet been met. The DWP responded to concerns about Verify by developing in-house and in parallel an alternative identity assurance service called Prove your Identity. A July 2017 update advised the UC board that Prove your Identity could, combined with Verify, help achieve a 50% verification success rate. The September 2017 HC encouraged the programme to trial a third option, Verify LOA 1, a Government Digital Service product with a lower assurance standard than Verify. Online verification continued to be a significant risk to the programme.
32.The September 2017 HC concluded that, to be cost-effective at scale, the programme needed to “industrialise” its approach to “complex cases and vulnerable customers”. The IPA found a high level of uncertainty about the proportion of UC claimants who could be considered vulnerable, noting that estimates ranged from 25% to 50%. Given the resources required to support vulnerable claimants, if levels were towards the top end of that scale the medium-term sustainability of UC would be threatened.
33.The IPA’s call for the “industrialisation” of UC for complex cases and vulnerable customers is an unfortunate choice of phrase. In those stark terms, however, it epitomises the challenges facing the UC programme. To make its promised efficiency gains, it must become a far more automated system. Key areas such as identity verification, however, are currently manual processes for a large proportion of claimants. Delays to the rollout and automation of the digital service reduce projected efficiency savings. In seeking to maximise savings, however, the Department must monitor closely any potential adverse effects on claimants and factor those into its decision making.
34.A recurring theme of the reviews is the Department’s failure to set clear criteria for determining whether to proceed with specific stages of the rollout:
35.The IPA has been consistently critical of the Department’s failure to set clear criteria for proceeding to the next stage of the UC rollout. Setting clear performance standards in advance is the best way of ensuring decisions are made objectively. The publication of these would both benefit scrutiny and make it far easier for the Department to explain its decisions.
36.UC has important consequences for local authorities, which administer housing benefit, provide safety net payments to people in hardship and are often major landlords. The IPA reports tend to alternate between criticism and praise for the Department in its engagement with local authorities. While it tended to improve in response to criticism, the rate of improvement was not sustained.
37.The November 2011 PAR cautioned that the Department’s “one way high level communication” approach to external stakeholders could lead to a “delayed or disrupted roll out”. The January 2013 PAR said the exclusion for councils from joint work between DWP and HMRC on the migration of tax credit claimants was “a significant gap”. The February 2014 PAR found that the Department has given little thought to the operational consequences of moving claimants from housing benefit to the housing costs element of UC. This was despite “real hunger” in local government to conduct trials to understand the consequences of UC for the broader social support system. The MPA said that the programme should regard local authorities as “delivery partners”, rather than mere stakeholders, as effective relationships with them would be “critical to joined up delivery” of UC. The October 2015 PAR highlighted again the movement of claimants from housing benefit to UC as a “risk to the programme”. The MPA did not pursue this concern further as it was outside the scope of its review. The latest report, the September 2017 HC, called on the Department to work better with third parties such as local authorities, housing associations and CAB in the interests of claimants, and to be aware of the potential impact of scaling on them.
38.Local authorities are key delivery partners for UC. The programme would have benefitted, and would continue to benefit, from better engagement with them and other landlords, including housing associations.
39.As set out in Chapter 3, the early stages of the UC programme were beset by a disconnect between high-level policy objectives and operational delivery. It took several years before the programme’s approach accorded with its ambition. The October 2015 PAR found that the programme had left behind its “fixation” with in-vogue “Agile” software development methodology, which had left “the Agile tail wagging the digital dog”. By September 2016, the IPA was confident the UC had become a transformation programme and the September 2017 identified a “very clear delivery culture” across the UC programme. Nevertheless, the programme still faces cultural risks to its success. The March 2017 AAP expressed concern that frontline Jobcentre and service centre staff had “a lack of trust in new systems, with people defaulting to old behaviours”.
40.Reflecting on his six years as the minister responsible for UC, Lord Freud said that the established division of responsibilities in government, whereby ministers set policy and officials implement it, was incompatible with achieving major change. He took a far more active role in the implementation of UC than was usual for a minister. Had he understood the challenges of achieving transformational change in government in his early days as a minister, he “would have been much more frightened of trying to do something as big”. UC is a valuable case study of the challenges in achieving transformational change in government which should be examined by ministers and civil servants planning major projects.
91 DWP, , published November 2017 and , published November 2016
92 NAO, , HC (2014–15) 786, November 2014, para 13
93 IPA, UC Health Check, September 2016, para 5.4.1. The Department expects to add 9,000 front line Work Coaches.
94 NAO, , HC (2014–15) 786, November 2014, para 13
95 NAO, , HC (2014–15) 786, November 2014, para 2.10
96 NAO, , HC (2014–15) 786, November 2014, para 16
97 IPA, UC Health Check, September 2017, para 6.8
98 IPA, UC Assurance of Action Plan, March 2017, para 2.10
99 IPA, UC Health Check, September 2016, para 5.5.2
100 PAC, Thirtieth Report of Session 2013–14, , HC 619, November 2013, p13
101 IPA, UC Project Assessment Review, October 2015, p11
102 For example, the Common Agricultural Policy Delivery Programme reverted to using drop-in centres and a telephone helpline to confirm the identity of farmers because Verify did not operate as the Department for Environment, Food and Rural Affairs expected. See NAO, , Session 2015–16, HC 606, December 2015, para 8
103 IPA, UC Health Check, September 2016, para 5.4.2
104 IPA, UC Health Check, September 2016, para 220.127.116.11
105 IPA, UC Assurance of Action Plan, March 2017, para 5.1, and UC Health Check, September 2017, para 6.9
106 IPA, UC Health Check, September 2016, p3
107 IPA, UC Assurance of Action Plan, March 2017, p3
108 IPA, UC Health Check, September 2017, p3
109 IPA, UC Health Check, September 2017, para 6.9
110 IPA, UC Health Check, September 2017, para 6.9
111 IPA, UC Health Check, September 2017, para 6.7
112 IPA, UC Health Check, September 2017, para 6.7
113 In its November 2014 NAO report recommended the Department “develop specific milestones for both digital and live services before each additional stage of roll-out”. See NAO, , HC (2014–15) 786, November 2014, para 22.
114 IPA, UC Project Assessment Review, January 2013, p12. Pathfinder was a pilot of live service UC, used for single Jobseeker’s Allowance claims in a small number of Jobcentres.
115 IPA, UC Project Assessment Review, February 2014, p15
116 IPA, UC Health Check, September 2016, para 5.5.4
117 IPA, UC Assurance of Action Plan, March 2017, p2
118 IPA, UC Assurance of Action Plan, March 2017, para 4.7
119 IPA, UC Assurance of Action Plan, March 2017, para 4.2
120 IPA, UC Assurance of Action Plan, March 2017, para 4.4
121 IPA, UC Assurance of Action Plan, March 2017, p3
122 IPA, UC Health Check, September 2017, p5
123 IPA, UC Health Check, September 2017, para 6.6
124 IPA, , November 2011, p23
125 IPA, UC Project Assessment Review, January 2013, p12
126 IPA, UC Project Assessment Review, February 2014, p17
127 IPA, UC Project Assessment Review, October 2015, p13
128 IPA, UC Health Check, September 2017, para 6.7
129 IPA, UC Project Assessment Review, October 2015, p8
130 IPA, UC Health Check, September 2016, para 5.2 and UC Health Check, September 2017, para 6.4
131 IPA, UC Assurance of Action Plan, March 2017, p2 and para 2.17. For example, a case management culture was not yet embedded in UC service centres.
132 Institute for Government, , January 2017
29 January 2018