UK Politics

Universal credit: What went wrong?

An ad for the online universal credit system

Universal credit - the government's flagship welfare reform - is in trouble, according to the National Audit Office. The minister in charge, Iain Duncan Smith, says he has fixed most of the problems. Here's the auditor's report into what has gone wrong.

The timetable was too ambitious

In 2010, shortly after the coalition came to power, Iain Duncan Smith announced universal credit would begin a national 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. The ambitious timetable created pressure on the department to act quickly and meant that it needed to manage progress tightly," says the NAO report.

There was no detailed plan

For the first time in a major government project, officials set up systems and processes while details of the policy were still being worked out.

This "agile" approach was meant to avoid problems created by more rigid project management - but appears to have created problems of its own.

"The department was warned repeatedly about the lack of a detailed 'blueprint', 'architecture' or 'target operating model' for universal credit," says the NAO report.

Officials understood the overall aim of universal credit but were confused about important details, such as how anti-fraud measures would work and how the benefit would be claimed online.

In addition, adds the report: "The lack of a detailed plan or management information meant that the department has never been able to measure its progress effectively against what it is trying to achieve."

A bunker mentality developed

The Department for Work and Pensions "ring-fenced the universal credit team and allowed it to work with a large degree of independence", notes the NAO report.

But this appears to have led to a "fortress" mentality among staff, a tendency to only report "good news" to bosses and a climate where talking about problems was stifled, according to internal performance reviews.

Poor financial management

The report is highly critical of the financial management skills of the civil servants in charge of delivering universal credit.

"This includes limited understanding of how spending related to progress, poorly managed and documented financial governance and insufficient review of contractor performance before making payment," it says.

High staff turnover

This was not entirely due to bad management. The man brought in by Iain Duncan Smith to sort out universal credit, Philip Langsdale, tragically died in December 2012.

But, says the NAO, the programme has still had five bosses since mid-2012.

Inadequate control over suppliers

Accenture, IBM and HP were hired to provide IT and management systems but, warns the NAO, officials have not kept a close enough eye on how they are doing. There is a risk, it adds, that the suppliers will end up managing themselves due to the "lack of an agreed, clearly defined and documented scope with each supplier setting out what they should provide".

"This hampered the department's ability to hold suppliers to account and caused confusion about the interactions between systems developed by different ones."

Ignoring recommendations

From mid-2012 it became "increasingly clear" that the DWP was failing to do anything about the problems identified in a series of internal reports, says the NAO.

By late 2012, it adds, "the department had largely stopped developing systems for national roll-out and concentrated its efforts on preparing short-term solutions for the pathfinder" (the small scale trial of the system).

What has Iain Duncan Smith said about the report?

The work and pensions secretary says he was already aware of the problems raised by the NAO and they have all been fixed.

He told BBC News: "I lost faith in the ability of civil servants to manage this and so I brought in people from the outside."

He insists universal credit will be delivered "in time and on budget," and says the NAO report is dealing with "historic" issues.

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