Universal Credit: Will May 2015 See A £500m IT Write Off?

Last week, Channel 4 TV and Radio 4 tried to peer into the foggy world of the Universal Credit pilot while this week the Parliamentary Work and Pensions Committee will begrilling the Secretary of State for Work and Pensions and the Permanent Secretary of the Department for Work and Pensions (DWP).

DWP holds all the statistical evidence on how successful Universal Credit has been with the 1% of claimants who have been taken on board. So the media are doing what they do best: relating anecdotal evidence.

This is my set of note-like reactions to the Channel 4 documentary [which 24n has already commented on, here]

He Said, She Said: Anecdotes Vs Data?

Four big takeaways:

• Channel 4 claim that rent arrears have soared to 90% and that the largest landlord in the first pilot area (Warrington) is extremely critical of the implementation
• Radio 4 interview with the Chair of the Parliamentary Public Accounts Committee, Margaret Hodge, says for the first time that she is worried over a possible £500m write-off of IT
• Channel 4 whistle-blower confirmed that the IT still only works for single claimants. After four years, and £750m spent on the project, complex cases are still done manually.
• The DWP says that this all these problems are in the past - and things are going swimmingly now.

Note: There is a lot of detail and some analysis here which I hope is useful. I apologise for any mistakes I advance and encourage readers comment below with any corrections/further notes to add in.

Over quirky stock background music, Liz MacKean reported on Universal Credit from Warrington, opening her charge with the question, “If they can’t get it right in Warrington, how will the system cope when millions are claiming?”

Testing The Claims

By now one million are meant to be on Universal Credit, but there are only a few thousand.

The four pillars of Universal Credit were tested using these 4 anecdotes:

Easy to use Conor Helps was living with his foster family. His foster mum tried to fill out the form. The Job Centre staff did not understand the form themselves. When he started work the staff thought he would have to claim Income Support separately, when they should have been trained in the process whereby it should have been added to his Universal Credit.

Adjust easily Jay Montrose was a ‘plain vanilla’ case: a single unemployed male. But things got complex when he moved into his partner’s home. The couple were caught between the local Job Centre and the central support centre. “We survived on coffee and crisps,” said his pregnant partner, Nikki Colton, after their claim for change was delayed by three months.

A good experience Mark Harper, Junior Minister for Work and Pensions, explained that a slow rollout was to ensure a “good experience” of the new system. The case of Sean Pierce, an unemployed security guard (and his two playful kittens!) was then given. He asked for a breakdown of the payment and did not understand that the rent payments were his responsibility under Universal Credit. DWP claim they did send the letter, Sean said he didn’t get it. They said, he said… This is a big change – see my Sky News TV interview that discusses the impact on claimants.

Peter Fitzhenry of Warrington’s largest landlord, the Golden Gates Housing Trust (who has previously been vocal on the subject), said that only one or two tenants have been offered personal budgeting support from DWP that was promised under Universal Credit. He also says that even when rent payments are received directly from DWP, they are often incorrect, or do not include the tenants’ names.

Worryingly for many landlords, some payments have continued to go to the tenants even when DWP have agreed to make payments directly.

Rent arrears Dispatches commissioned a survey of seven major landlords; of 158 of their tenants claiming benefits across the UK, 50% were in arrears. The programme then claimed that 9 out of 10 Universal Credit tenants are in arrears, and one third of those are facing court proceedings for eviction. Mind you, we don’t know how many people they asked, or how they accounted for people who did not respond to the survey. On the other hand, when Mark Harper was confronted with these statistics he did not argue against them… all the same, these Channel 4 statistics (and accompanying cartoons!) should be treated with extreme caution.

Dame Anne Begg MP made an appearance. Interesting. She was credited as being on the Parliamentary Work and Pensions Committee. What was not mentioned is that she is the chair of the committee and it is meeting in a week on Wednesday (November 5) to grill the Secretary of State and the Permanent Secretary in a public hearing.

A whistleblower was quoted: “The training has not been kept up to date with the latest Universal Credit processing rules, even though trainers have pointed this out to the DWP, but nothing is done about it. The IT system is completely unworkable. It works for single claimants, more complex cases have to be done manually. It is ten times more complex. We were expected to handle 30 tasks a day, but are achieving only 3.”

Too complex A gardener profiled, Geoff Packer, is a seasonal worker out of work every winter. He is in court regarding Council Tax arrears. From April 2013 claimants have had to pay a proportion of their Council Tax benefits and when he started on Universal Credit he was confused by the new system.

He may not be the only one: DPW staff were said in the programme to also be confused by these changes, summed up by the segment on “Ideas please? Sinking!” - the subject line from an internal email from a sanction team leader whose team could not cope with the workload. Minister Mark Harper said all the staff he had spoken to were very happy. (He said, they said?)

Accelerating the roll-out; Channel 4 misreported this - the presenter, Liz MacKean, said that from February next year Universal Credit would be in all Job Centres in the UK. What has been announced is that it will START to be rolled out in February. Watch this space…

Economist Jonathan Portes assessed how well the government has implemented its various controversial welfare reforms. We got to hear the opinions of politicians, their special advisers and a few civil servants too. Portes’s thesis was that this programme of change, at its centre the huge Universal project, has been “nothing short of a fiasco, which has caused genuine hardship”.

Despite his strange Trans-Atlantic accent, Portes was an insider: he was Chief Economist at DWP from 2002 and Chief Economist at the Cabinet Office until 2011.

The 'Not Much New There' (But Still Troubling) Department...

Gus O’Donnell was the first insider witness – until recently he was the Head of the Civil Service. In a short sound-bite, he was heard saying that Iain Duncan Smith was very “ambitious” in driving his timescales for change. He also was not impressed by failures being blamed on DWP’s Permanent Secretary Robert Devereaux. Not much new there.

Prof. Colin Talbot: “I didn’t know whether the laugh or cry when I read the White Paper (in 2010) – just ridiculous to try and implement it in 4 years." Not much new there.

The first new piece of evidence was provided by Dr. Steven Brian (dubbed ‘the architect of Universal Credit’ – we don’t know who by – there are many people who claimed this dubious title). He said that, “The challenge became very stark in the summer of 2012 – and materially obvious we had to change plans”.

However, the Secretary of State stated to Parliament three months later that plans were intact.

Jonathan Portes went on to say that many officials came and went in the project. (This has been well detailed on this blog.)

A common theme was that things were too rushed, thus the excellent Sue Marsh (@suey2y) was interviewed. She had a crippling disease but was turned down for benefits was briefly interviewed after her Work Capability Assessment.

Professor Malcolm Harrington carried out a review of the Work Capability Assessment. He said, “It was mechanistic, inhumane and was like a trial assessing guilt or innocence”. He had counselled a slow-down of the roll-out, but was ignored.

The DWP say he changed his mind. He says, they say …

'All ATOS' Fault'? Really?

At least 500,000 and rising are still left unassessed, apparently. All the fault of the supplier, ATOS?

The tensions between DWP and Cabinet Office were mentioned. Again, nothing new there.

Jonathan Portes makes a strange claim - that the DWP press office blamed ATOS, "appointed by the previous government”.

This is weird. The choice of suppliers and letting of contracts a hands-off process conducted by civil servants, not a Ministerial decision…

Spending critic and MP Margaret Hodge has stated that, “I believe that after the election (in May) we will see the write-off of half a billion pounds.”

Again, nothing new.

Channel 4's programme last week said that DWP had told him that the ‘enhanced digital service’ (v3.0) will begin testing later this year. He did not pick up on the fact that previously they said that it should be in ‘beta’ use on 100 real life claimants by November…

And finally... Richard Bacon MP: “We’ve spent so much money on this, and what has been achieved? Is it worth the candle?”

And he is a Conservative MP…

© Brian Wernham 2014 (we have reprinted his original blog post with permission)

Brian Wernham is an independent IT and project management consultant, working in both the public sector and the private sector. He has has more than 30 years’ experience in adaptive change program leadership plus extensive international experience in posts in the USA, UK, Canada, Hong Kong, Germany and offshore in Bangalore.

He is also Deputy Chair - Governance Special Interest Group of the Association for Project Management.