Universal credit: Welfare reform 'poor value' watchdog says

Mr Duncan Smith said the rollout of universal credit would be delivered "within budget and within the timescale"

The government's flagship welfare reform has been badly managed, is "overambitious" and poor value for money, the spending watchdog has said.

The National Audit Office said risks were taken with universal credit to hit targets, IT systems had "limited functionality" and an unfamiliar project management approach was used.

A national rollout of the new benefit has been delayed following IT glitches.

Work and Pensions Secretary Iain Duncan Smith said these had now been fixed.

Under the universal credit plans, six key means-tested benefits - jobseeker's allowance, employment support allowance, housing benefit, working tax credit, income support and child tax credit - are to be combined into a single payment which ministers say will ensure that claimants are always better off in work and also reduce fraud.

'Early setbacks'

The transformation requires the merging of complex computer systems in benefits offices, HM Revenue and Customs and local councils - which the government insists can be done.

All new claimants were supposed to receive the universal credit from next month as part of a phased implementation plan but this has been delayed following a number of pilots earlier this year.

Liam Byrne: "Iain Duncan Smith has lost control of the programme and lost control of the department"

Instead, new claimants at six "hub job centres" in England, Wales and Scotland will receive the new benefit from October.

The watchdog's report identified "early setbacks", and said: "At this early stage of the universal credit programme the department has not achieved value for money.

"These problems represent a significant setback to universal credit and raise wider concerns about the department's ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress."

The report said there was still potential for universal credit to bring about "considerable benefits" if the department put "realistic plans and strong discipline in place".

The setbacks the watchdog identified included:

  • Officials were "unable to explain" the reasoning behind the timescales or their feasibility
  • There were no "adequate measures" of progress
  • Computer systems lack the function to identify potentially fraudulent claims, relying instead on manual checks
  • £34m investment in IT systems was written off
  • The Department for Work and Pensions (DWP) lacked IT expertise and senior leadership
  • Delays to the rollout would reduce the expected benefits of reform

Expenditure on IT systems has accounted for more than 70% of the £425m spent to date but the report suggested officials did not yet know whether the infrastructure in place would support a national rollout.

Analysis

It was the language of a minister on the defensive.

A report from an organisation, without a political axe to grind, has ripped into his flagship project and so a round of broadcast interviews beckoned for Iain Duncan Smith.

Here is how a few of his sentences began:

"I fully accept that the problem was..."

The Department has "wrestled with issues and difficulties."

"What went wrong with the Universal Credit team..."

Then followed a similar set of hostile questions from MPs in the Commons, and then the inevitable question to the prime minister's Official Spokesman from reporters about whether Downing Street has full confidence in the scheme and the minister.

The answer was yes, but the question reveals what is at stake.

Universal credit is a reform so big it has been a passion for Mr Duncan Smith for a decade.

It's a reform so major it would be arguably the biggest shake-up of the welfare state since it was set up.

And so it's a reform so big that if it was to fail it would leave not just Mr Duncan Smith, but the government as a whole, in a real mess.

While steps were taken at the end of 2012 to get to grips with some of the problems, the watchdog said the "underlying issues" had not been addressed.

Amyas Morse, the head of the National Audit Office, said the "relatively high risk trajectory" was met by "weak management, ineffective control and poor governance".

The BBC has learned that the overspend on the the governments flagship welfare reform programme could rise further, as £162m has been invested on new hardware and software, in addition to the £34m on IT systems.

But Mr Duncan Smith told the BBC: "This will be delivered within budget and within the timescale."

He said the pilot scheme, which has begun with 1,000 people in the Manchester area, was "demonstrating that the IT we put forward for this actually works".

But his Labour shadow Liam Byrne, who supports universal credit in principle, accused Mr Duncan Smith of misleading MPs and the public about the state of the new system.

"It is now quite clear that Iain Duncan Smith has lost all control of his department and, frankly, he has now lost control of the truth," he said.

"This is a damning report. It shows they started work without knowing what they were doing, millions in IT spend has been written off and there are no counter-fraud measures worth their name.

"We want to know how he has left Parliament with the impression that everything is on track when the NAO says actually there are major problems.

"Mr Duncan Smith is saying one thing to Parliament and his officials are confirming something entirely different with the nation's auditors."

'Culture of secrecy'

Mr Byrne clashed with his Conservative opposite number in the Commons, telling him: "You must apologise to the House and you must now convene cross-party talks to get this project back on track. The quiet man must not become the cover-up man."

ORIGINAL TIMETABLE

  • From October 2013 to April 2014 about half a million new claimants were due to receive universal credit instead of jobseeker's allowance, employment support allowance, income support, housing benefit, working tax credit and child tax credit.
  • At the same time, another half a million existing claimants and their families were due to be transferred to the new credit when their family circumstances changed significantly - for instance if they got a job or had another child.
  • From April 2014 a further 3.5 million claimants and their families were due to move to universal credit.
  • And from the end of 2015 to the end of 2017 a further three million people are due to be moved over, focusing on housing benefit claimants

But Mr Duncan Smith said he had identified the same problems with universal credit as the NAO after launching an independent review of the project last summer and they had now been fixed by bringing in management from outside the civil service.

He blamed the problems on a lack of "professionalism" and a "culture of secrecy" among the team of civil servants originally in charge of the programme.

Former Labour welfare reform minister Frank Field said the NAO report "spelled the beginning of the political end for the universal credit dream" and urged the government to "pull the plug on it".

The project suffered a tragic setback earlier this year when Philip Langsdale, the DWP's chief information officer, died four months after taking over responsibility for it.

The man drafted in over the summer to take over the running of universal credit admitted there had been "missteps".

"It's clear to me there were examples of poor project management in the past, a lack of transparency where the focus was too much on what was going well and not enough on what wasn't and with suppliers not managed as they should have been," Howard Shiplee told the Daily Telegraph - while claiming things had been "put right".

"I'm not in the business of making excuses, and I think it's always important to acknowledge in any project where things may have gone wrong in order to ensure we learn as we go forward," the former London 2012 executive added.

Universal credit graphic

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    14:48: 'Vote for the party that cares'
    Green conference

    "I say to you very simply, vote for the party that cares", Ms Bennett tells her conference as she brings her speech to an end. "Vote for the common good. Vote for the politics of the future. Vote Green."

     
  65.  
    14:47: 'Change Britain'

    There are people who want to see business as usual, Natalie Bennett says. To counteract them, we need people use their votes, she adds. If we all vote Green, "we can change Britain".

     
  66.  
    ‏@rosschawkins Ross Hawkins, BBC political correspondent

    tweets: Free social care paid for by wealth tax, higher taxes on those earning over 100k, tax avoidance, Robin Hood tax under Green plan

     
  67.  
    14:45: Young 'have it tough'

    Younger generations "have it tough", Ms Bennett says. That's not the fault of their elders, she adds. "We need to look out for each other."

     
  68.  
    ‏@SophyRidgeSky Sophy Ridge, Political correspondent, Sky News

    tweets: Financial transactions tax - "Robin Hood tax" - and more tax on those earning over £150k going down well in hall #GreenSurge

     
  69.  

    A financial transaction tax would be introduced by the Greens and those earning over £100,000 "should pay more, says Ms Bennett.

     
  70.  
    14:43: Care plan 'means jobs'

    Free social care for those over 65 would mean 200,000 new jobs and training places, Ms Bennett says. It will be a core pledge in their manifesto.

     
  71.  
    @rosschawkins 14:43: Ross Hawkins, BBC political correspondent

    tweets: Natalie Bennett wants free social care for over 65s

     
  72.  
    14:42: 'New taxes are needed'

    The Greens will restore equal care for all - that principle should apply to social care too, Green leader Natalie Bennett says. "Those who have the most should contribute most - new taxes are needed."

     
  73.  
    14:41: Remove market from NHS

    That's why I'm delighted to work to introduce an NHS reinstatement bill that removes the market from the NHS, Natalie Bennett says.

     
  74.  
    14:41: Bennett - NHS

    In the NHS, the infiltration of the profit must be reversed, Ms Bennett says. The market "costs us big time", she adds.

     
  75.  
    @LabourList LabourList

    ‏tweets: 12 target seats Labour are worried they might not win because of the Greens labli.st/1KxwLym

     
  76.  
    14:39: Greens: Power and wealth

    The current model of economics and society serves those with power and wealth, says Green leader Natalie Bennett. We must be citizens first and foremost - paying to common funds to look after the old, weak, poor and sick. This is what the politics of the future will look like, she adds.

     
  77.  
    14:38: No Tory deal

    "Just imagine a strong group of Green MPs", Natalie Bennett says. That group would never support a Tory government, she continues. They would have a huge say and could help develop that new politics she has been talking about, she says.

     
  78.  
    14:37: Climate change

    Speaking about climate change, Natalie Bennett says "we have to be up to the task". She says change has to come - the market is short-sighted and short-term. It is blind and senseless and works for the 1%.

     
  79.  
    @jameschappers James Chapman, Daily Mail political editor

    tweets: .@natalieben: "Noone should be worrying about a fracking drill burrowing into the heart of their community". Eh? #gpconf

     
  80.  
    14:36: Food banks

    Almost half jobs since 2010 are for self-employed people, but many of them are living in poverty, Natalie Bennett says. Individual charity isn't a substitute for collective justice, she says of food banks.

     
  81.  
    @rosschawkins Ross Hawkins - BBC political correspondent

    Tweets: Ed M last week "a society that works for all and not just a few"; Bennett today "society that works for the many not just the few"

     
  82.  
    @rosschawkins Ross Hawkins - BBC political correspondent

    Tweets: Bennett words almost identical to Miliband's — society that works for the many not just the few

     
  83.  
    14:35: 'Demand for change is louder'

    Up and down the country campaigns demanding new politics are growing, Natalie Bennett says: "The demand for change is louder and clearer, at last, the people are fighting back."

     
  84.  
    14:34: 'Green surge'

    The Green surge is more than a hashtag or numbers, Natalie Bennett says. It's the result of members' "commitment" and "hard work". The Greens are a "central player" in British politics, she says.

     
  85.  
    14:33: 'Nobody should live in fear'
    Bennett

    Nobody should live in fear of not being able to put food on the table or going into debt to pay for education, Natalie Bennett says. The politics of the future is not the politics of transaction, she says. That is the "old" and "failed" politics.

     
  86.  
    14:29: 'Politics of the future'

    The "politics of the future delivers for everyone" in our one planet, Natalie Bennett adds. "That's the politics of the Green Party."

     
  87.  
    14:28: 'Agents of change'

    "Britain could be a very different country on 8 May", Natalie Bennett tells delegates at the party's conference. The Greens can be the "agents of change" looking to the "politics of the future", she says.

     
  88.  
    14:27: Political revolution

    Natalie Bennett says voters will have the chance at the election to start "a possibility of a peaceful political revolution". People will be able to stop the poor being punished for the mistakes of the wealthy, she says. "We can deliver a Britain which delivers to all people - a Britain which cares", she adds.

     
  89.  
    @SophyRidgeSky Sophy Ridge, Political correspondent, Sky News

    tweets: Punchy speech from Caroline Lucas - now Natalie Bennett needs to make sure she's not upstaged by the warm up act

     
  90.  
    14:26: Natalie Bennett speech
    Natalie Bennett

    Natalie Bennett on her feet at Green conference now. She thanks Caroline Lucas for being "the stand-out MP" in the current Parliament. She's confident she will be in the next Parliament and beyond, too. It's been a momentous year for the party, putting it at the forefront of British politics and making it the third largest in England and Wales.

     
  91.  
    14:25: Politics without austerity

    Caroline Lucas says the party will defend politics without austerity, nuclear power or demonisation of those who need the welfare state or those who come from abroad.

     
  92.  
    @politicshome PoliticsHome

    tweets: .@CarolineLucas says "opposition to austerity" links @theSNP & @TheGreenParty, calling for a "progressive alliance" between the two #gpconf

     
  93.  
    14:24: NHS pledge

    It's the Greens who set the agenda on a number of issues, Caroline Lucas says. She says the party will champion the NHS reinstatement bill - to reverse "marketisation" of the health service.

     
  94.  
    ‏@rosschawkins Ross Hawkins, BBC political correspondent

    tweets: Caroline Lucas supposed to be introducing Natalie Bennett in show of support. Risk she might simply upstage her

     
  95.  
    14:23: 'More MPs'

    "Just imagine what we can do if we elect more MPs", Caroline Lucas says, adding that leader Natalie Bennett is putting the Greens on course to do that.

     
  96.  
    14:22: Progressive alliance

    With the rise of the SNP and Plaid, we have the chance to form a "progressive alliance", Caroline Lucas, the Greens' MP tells the party's conference. They've worked before on their opposition to austerity and after the election, they could do more is her message. If Labour are a minority government, the Greens could stop them pandering to big business, she says, adding: "Support them when they do the right thing, block them when they're wrong".

     
  97.  
    @politicshome PoliticsHome

    tweets: .@CarolineLucas tells Green party activists at the #gpconf that leader @natalieben is doing a "fantastic job"

     
  98.  
    14:18: Caroline Lucas

    On the general election, Caroline Lucas MP says the Greens are challenging from "a position of strength". This election is different, she says because they have something to defend - her seat in Brighton and Pavilion. That victory has given the party a voice in Parliament, to show "you can be a force for good in politics without selling out your principles".

     
  99.  
    14:17: Caroline Lucas tribute

    Paying tribute to Natalie Bennett, Caroline Lucas MP says she is proud to call her a colleague and friend.

     
  100.  
    14:15: Green conference
    Caroline Lucas

    Green Party leader Natalie Bennett is introduced by the party's MP Caroline Lucas. Ms Lucas welcomes the party's new members. She says the party is "truly democratic". "Your votes count as much as mine," she adds.

     

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