The claim
“This is not an IT disaster, it will be delivered in time and in budget.”
IDS Secretary of State for the Department of Work and Pensions, on the universal credit system, speaking on the Today programme, 5th September 2013
The background
It’s a flagship project of the Conservatives. Universal credit is supposed to cut welfare and cut the bureaucracy around welfare by pushing it all into one streamlined, easy to use online hub. The hub should be cheaper to run and make it easy to see when people are cheating the system.
Government IT projects often start off with that sort of idea.
But a report out today suggests that the Department for Work and Pensions (DWP) not only does not really know what it is doing, but has already spent £300m doing it. And that may be money wasted, the report from the independent National Audit Office (NAO) cautions.
Universal credit will consolidate six different benefits: it brings together jobseeker’s allowance, employment and support allowance, income support, housing benefit, working tax credit and child tax credit. These benefits accounted for £67bn of spending in 2012-13, and 13 million separate claims.
The new system is supposed to save the government £38bn by 2023 in lower admin costs and reduced fraud.
By that calculation, the total price tag on the project – £2.24bn by 2023 – will be easily paid for by the savings.
But that all seems like a long shot after the NAO report.
The analysis
Iain Duncan-Smith’s universal credit system may not be an IT disaster yet, but the NAO suggests it’s well on its way.
Some £34m spent on the project has been written off to date, and the entire IT spend so far – £303m – may also also be wasted suggests the NAO, stating that civil servants didn’t know what the system they had constructed so far did.
Looking forward, civil servants were unable to explain why they estimated the system would cost so much and why they thought it would be ready for roll-out in October 2013.
“The Department was not able to explain to us how it originally decided on October 2013 or evaluated the feasibility of roll-out by this date,” writes the Audit Office.
Currently 1,000 people are processed through the system. In the original plan one million were supposed to be on it by early 2014. Can Iain Duncan Smith really pull it back on track so that all 13 million yearly claims are processed through the system by 2017?
The problems with the system look like they won’t be that easily solved.
1. Lack of a detailed plan
“Throughout the programme the department has lacked a detailed view of how universal credit is meant to work. The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for universal credit,” says the Audit Office, citing this as the main cause for failure.
David Chan, Director of Information Leadership at the Cass Business School at City University, suggests this comes straight from the top.
“You can’t just say ‘oh I want a universal credit system – just do it for me.’ But I suspect at the highest level of policy, even at the Iain Duncan-Smith level, that’s the way they think about it.”
“You’ve got to have a clear conception of how to do this,” Mr Chan says.
IDS didn’t seem to show any greater appreciation for IT details this morning. He told the Today programme: “We produced a plan – that white paper laid out a plan of how universal credit was going to work And those charged with putting this together were meant to put in a detailed plan about how the IT was meant to run.”
But the IT shouldn’t be afterthought says Mr Chan, it should be part of the plan from the start:
“At that early stage you need some fairly senior information people involved – asking them: ‘Is that do-able, what are the real risks?'”
2. The benefits system is incredibly complicated
And it’s not helped by the fact that the benefits system is very complicated.
Mike Loginov, a tech consultant who worked for the DWP on Universal Credit, warns of the chequered history of such ambitious government IT projects: “It is one of the most complex IT programmes in the country, because of the nature of what they’re doing across so many different organisations. And the government traditionally hasn’t been great at delivering large projects of this nature.”
Particularly complicated benefit claims, or ones that are suspected as fraudulent, will end up taking a lot of time and require extra technical firepower, adds Mr Chan:
“Benefits are very complex and human-orientated. With projects like this if you complicate them too much it costs extra money. According to the 80/20 rule – the management principle – 80 percent of your work goes on 20 percent of your requirement.”
“I wonder if the right balance has been struck here.”
3. Lack of skills in the Civil Service to oversee the plan
“I’m no technologist … we rely on people telling us what is actually correct,” Iain Duncan-Smith said today. The problem is that very few people anywhere in DWP are technologists.
“The Department has particularly lacked IT expertise and senior leadership, with frequent changes in senior management,” says the Audit Office.
Indeed the people with the skills are often the ones charging the government money.
“When you tackle a huge big project – the way you manage it, you tackle it and chunk it out is absolutely critical,” says Mr Chan, “If the people who are helping you do that are also the people who bid for the project, there’s a conflict.”
“The biggest problem that the public sector has is that they no longer have sufficient people in the middle tier who understand information specifications and methodologies .. you have to rely on outsiders to do this for you.”
The suppliers on the universal credit project include Accenture – the main supplier – paid £125m to date to provide Software design.
IBM took £75m also to supply software design. HP has been paid £49m for hardware and managing “legacy software”.
The verdict
Given that these problems are big ones, and given that ambitious government IT projects have extremely low success rates, the signs don’t look good for the simple IT system that IDS has promised to deliver.
Mr Duncan-Smith’s current solution – the Pathfinder project – is a stripped-down version of the universal credit service that works for small numbers of people in smaller areas. That may work in a limited way, but universal it isn’t.
“By late 2012, the Department had largely stopped developing systems for national roll-out and concentrated its efforts on preparing short-term solutions for the Pathfinder,” says the Audit Office.
The initial problem with the project was that the planning was based on optimism rather than a realistic assessment. Sounds like IDS’s claims could still be rooted more in optimism than the facts to this day.
By Anna Leach
