Tagged: Universal Credit

Universal Credit: what took everyone so long?

There’s been a flurry of calls for the rollout of Universal Credit to be delayed (e.g. from two reports from Citizens Advice, and concerns from  Louise Casey and a clutch of Conservative MPs).   It’s still possible to hear people saying what a good idea Universal Credit is, how it was going to simplify everything and how it would help work incentives. “The trouble with Universal Credit”, a New Statesman article tells us, “is that everyone thinks it’s a good idea.”

There are four sorts of problems.  First, there were the basic flaws in the design.  I wrote this in a paper published in 2013:

Means tested benefits are not, of course, the only benefits which are subject to problems.  There are other aspects of the benefits system which are cumbersome, badly designed and problematic for claimants and administrators alike. They include, for example,

  • benefits which people cannot work out they’re entitled to
  • the problem of repaying money that people did not know they should not receive
  • rules that tell people they must work at the same time as recognising that it‟s not reasonable to work (the current position for ESA)
  • the medical reassessment of claimants
  • benefits which penalise claimants for circumstances outside their control
  • the cohabitation rule, and
  • complex assessments that require people to report changes across multiple dimensions.

Universal Credit has the lot. It is as if someone has started with a list of everything in the benefits system that causes problems and designed the new benefit round it.

Then there was the abandonment of all the benefit’s objectives, one by one. All the primary objectives – such as simplification, work incentives, reducing in-work poverty, smoothing transitions and cutting back on fraud and error – have been fatally compromised. The marginal rate of deduction is much higher than intended. The cuts in work allowances have removed any incentive for most claimants to remain in contact with the system if they find work.

Third, there were the problems of implementation.  None of the innovative methods envisaged – real-time processing, smooth tapers, digital by default – was achievable. There is no effective system for coordinating and pooling all the information required in one place – the new system has come to rely primarily on returns from claimants about changes. The system makes complex demands of claimants (for example, those relating to security, agreements by couples or job search) which are almost impossible to police.  It system relies on accurate information from claimants, and people cannot respond sensibly to questions they do not know the answer to.

And then, last of all, there are the so-called ‘teething’ problems – miscommunication, lost payments (surely that ought to be a priority concern?), and the difficulties of introducing the new benefit at the same time as managing a large injection of additional rules such as  conditionality and housing. With or without Universal Credit, we are already in the position where nearly a quarter of unemployed claimants have had benefits stopped.  Universal Credit is not just threatening  a major breakdown in the safety net; it has already happened.

I did wonder, before I started, if I really needed to bother writing all this again.  I’ve been making the same sorts of criticisms of Universal Credit for nearly seven years now – try this blog from October 2010,  when I was arguing that the scheme was simplistic, impractical and wouldn’t either enhance work incentives or reduce administrative errors.  While it’s encouraging that so many people are waking up to the problems – it’s never too late to make things a bit better, at least – I have to ask: what took everyone so long?

John Slater explains the thinking behind the project management of Universal Credit

John Slater has been responsible for a series of Freedom of Information requests about the Universal Credit fiasco.  Yesterday he sent me a copy of the project management plan  introduced by Howard Shiplee, who was responsible for the development of Universal Credit from May 2013 until his departure, following illness, in September 2014.  Shiplee had previously been responsible for building construction for the 2012 Olympic Games.

I was puzzled by the plan, and wrote back to John:

I’m baffled – I can see no relationship between the steps to be taken and the design of a social security system. It looks more like a plan for building a McDonalds outlet, where all the groundwork’s laid and you know exactly what you want to do, so it’s all about delegating tasks. … I think you’re a project manager, John – – can you explain it to me?

I found John’s response so marvellously clear and helpful that I asked him if I could share it on the blog.  Here it is.

“Hi Paul,

You are right my background is programme and project management (my first degree was IT so I understand that aspect as well). You aren’t far off with your McDonalds analogy.

The plan is a classic case of an organisation focusing on the IT side of a major change programme. UC is one of the biggest change programme ever undertaken and nothing I’ve ever seen produced by the DWP reflects this.

The 100 day plan is a classic example of people that have been on a training course (e.g. Prince2 or Management Successful Programmes) but have never done the job for real. If you look down the left hand side of the ‘plan’ you’ll see the following headings:

  1. Key dates & decisions
  2. BT – Business (I suspect BT means business transformation)
  3. BT – Service Design & Build (I suspect BT means business transformation)
  4. BT Interfaces (I suspect BT means business transformation)
  5. Pathfinder Day 2
  6. Programme Approach
  7. HR
  8. Finance
  9. Assurance
  10. Security
  11. Comms (Communications)
  12. Stakeholder
  13. Supplier

With the exception of point 1 these are typically referred to a work streams. The idea is that each of the workstreams goes along their merry way cooperating with each other to deliver the programme. The reality of this approach with any complex programme is that it always goes horribly wrong.

If you look at points 2 to 5 then it is utterly focused on the IT. The plan looks like something to produce a software product of some sort. There is no mention of culture change, process engineering (this should be done before any software is produced) and the biggest issue of all people! This covers the claimants, DWP employees, Council Employees, Welfare Advisors and so on. They are just expected to magically learn and make it work. The trouble is human beings don’t work that way.

Part of the issue is that the DWP employees working on UC at the time hadn’t ever done anything like this before so didn’t have a clue. The put people in roles (e.g. programme manager, programme office manager etc) but they hadn’t done it before and had just been sent on a training course.

I’ve been doing this stuff for 30 years and I would have struggled to get UC up and running (and I’m very good at this aspect of complex programmes). Bringing in someone like Howard Shiplee was always going to fail. I’ve run programmes involving a lot of construction and it’s a different world and a totally different mindset. I suspect if you looked at the approach used for construction during the London Olympic build it wouldn’t look dissimilar to this plan. With construction the focus is generally on design and then build (known as D&B). The key factor is the supply chain and can the main contractor get the materials and people on site on time and in the right order. If you look at the plan again I don’t think it’s unreasonable to see the left hand side of the dark vertical as ‘design’ and the right hand side as ‘build’. This is what Howard Shiplee understood and it was so deeply ingrained I doubt he could have done anything else.

In respect of the pathfinder system released at Wigan it was a cobbled together lobotomised version of the IT that would ultimately be required for the complete UC. At this stage of the programme IDS knew the IT was fundamentally flawed, hence the talk of large sums being written off at the time. He also knew that they had to start over again but couldn’t admit that as it would be politically disastrous. Therefore, they rolled out the lobotomised version that only covered a small subset of people claiming JSA and claimed success. While this version was being rolled out painfully slowly the DWP was working desperately to produce a brain new IT system that ultimately will be the UC IT System.

Personally I think the new IT system will also fail. The methodology (Agile) as it’s been used by the DWP means that too much has been done in isolation. The system is going to be extremely complex and as bugs appear I’m not convinced the DWP will be able to find out the cause and then develop a solution that doesn’t result and another problem.

Kind Regards



Changing Universal Credit (again)

There are two days left for the consultation about limiting Tax Credits and Universal Credit to two children.  I’m not making a submission.  This is not a consultation about the policy, but about what exceptions should be made, including multiple births and the children of rape.  It’s a depressing process, which illustrates a general problem: if governments create stupid rules they then have even more problems to stop the anomalies  from spiralling out of control.

I’ve some sympathy for a comment made from the IFS in their work on the Autumn Statement, which included a change in the UC taper rate but maintained the swingeing cuts in the work allowance.  Stuart Adam pointed out that to date there have been four changes in the work allowance, one to childcare support and now one to the withdrawal rate.  It’s exceedingly difficult to know what the effect of cumulative small changes to Universal Credit will be, and maybe they shouldn’t be done unless we do.



Universal Credit is not back on track

A report by Nicholas Timmins for the Institute of Government suggests that Universal Credit has recovered from its initial disasters and is now on the road to recovery.  He has been told, and seems to accept, that the DWP and the Treasury have finally got a grip and sorted out the basic mistakes, and something like Universal Credit will be established.

Timmins’ report is largely based on interviews with senior politicians and civil servants.  The report is basically a chronological account of how the policy developed, how it went wrong and what’s been done subsequently to get it right.  But he would have done well to seek out some other perspectives.  The failures in design are fundamental – and because critical analysis through the usual channels was suspended, they have still not been adequately considered.  Amongst the many failures of Universal Credit,

  • all the primary objectives – such as simplification, work incentives, reducing in-work poverty, smoothing transitions and cutting back on fraud and error – have been fatally compromised
  • there is no effective system for coordinating and pooling all the information required in one place – the new system has come to rely primarily  on returns from claimants about changes
  • the system relies on accurate information from claimants, and people cannot answer questions they do not know the answer to.  No computer system can go faster than the information that goes into it
  • the marginal rate of deduction is much higher than intended
  • the cuts in work allowances remove any incentive for most claimants to remain in contact with the system if they find work
  • the system makes  complex demands of people, (for example, those relating to security, agreements by couples and job search) which are almost impossible to police.

The administrative failures of Universal Credit largely reflect a cavalier disregard for any practical experience derived from the benefits it is supposed to replace.   Even if everything had been done well, the scheme would have foundered; it was trying to do the wrong things in the wrong way.  There is little indication that the present implementation has done more than re-christen existing benefits with some tweaks in the rules, and as things stand many of those tweaks (such as rules on rent, reporting and conditionality) are not working too well.

A ‘minor’ glitch in Universal Credit

DWP apologises for inconvenienceThe Register reports a small glitch in the Universal Credit scheme.  Access to the online system was closed for more than 24 hours after an upgrade went wrong.  A DWP spokesperson described this as a ‘minor issue’.

When the Royal Bank of Scotland crashed access to cash for its customers with a botched upgrade in 2012, it led to a flurry of political statements, consideration by the Treasury Select Committee, the intervention of the regulator and fines for banks.  I might have asked, rhetorically, if there was any prospect of treating the DWP in a similar way, but we all know there isn’t.

Fraud and error in Universal Credit

Universal Credit was supposed, through some process I can’t claim to understand, to reduce fraud and error in the benefit system.  According to the Business Case, there were supposed to be reduced overpayments worth £14 billion over twelve years, or £1.16 billion per annum.    I commented in 2012, and again last December, that I found this claim implausible: Universal Credit doesn’t do anything about most of the circumstances which lead to fraud and error, but it does add layers of complexity to make confusion and mistakes more likely.  Now we have the first figures from the DWP on fraud and error in Universal Credit.  Universal Credit was overpaid by 7.3%, compared to 5.0% of JSA (the nearest comparable benefit) and 5.2% of Housing Benefit.  It was underpaid by 2.6%, while JSA was underpaid by 0.8%. The system makes more mistakes in both directions.  The DWP points to the complexity of managing some claims – but that, of course, is the point.

The DWP summary pleads that the difference between UC and JSA is ‘not statistically significant”, and that in any case UC and JSA are not directly equivalent.  True enough, but Universal Credit was supposed to cut fraud and error by somewhere between a third and a half of all overpayments.   If UC was supposed to save a third but is actually costing nearly fifty per cent more, the level of fraud and error is running at more than double what was expected.  If it was supposed to save half, it’s three times what it should be.

The Universal Credit Story: third instalment

The documents released to John Slater are now available on the  FoI website, What do they know.  Be warned that the Programme Risk files (numbered 3-6 in this list) are massive, so I’ve uploaded a smaller version here (one file of 6Mb instead of four totalling over 25Mb).

  1. Issues Log http://files.whatdotheyknow.com/request/…
  2. Milestone Plan http://files.whatdotheyknow.com/request/…
  3. UC Programme Risk Part 1 http://files.whatdotheyknow.com/request/…
  4. UC Programme Risk Part 2 http://files.whatdotheyknow.com/request/…
  5. UC Programme Risk Part 3 http://files.whatdotheyknow.com/request/…
  6. UC Programme Risk Part 4 http://files.whatdotheyknow.com/request/…

Last week, I outlined two rather different accounts that have been given of what went wrong.  The first suggested that the project was going according to plan when the Cabinet Office intervened and blew everything out of the water.  The second was that the DWP were aware of a series of problems, but those problems were not admitted to publicly and they were not satisfactorily addressed.  Looking at the papers in more detail, I’m inclined to a third, quite different conclusion.  The milestones laid out in the documents were largely met – but they were woefully inadequate to deal with a scheme of this complexity.  The issues which were recognised within the DWP  – such as the problems of potential fraud, identity checking or the low morale of staff – don’t begin to plumb the depths of the practical problems that the scheme needed to overcome.   I complained in 2011 that the scheme was half-baked.  It was worse than I thought.

I’m going to pick out a small point as an illustration.  The scheme aimed to pilot the use of RTI – real time information – from employers.  There is a minor risk noted, that

“Employers may not be ready to take part in the RTI main Migration (from April 2013).  The Comms activity to target the mass market may not reach some employers.  Employers may not have the relevant new software in place.”

In retrospect, this may seem thin – but it wasn’t good enough then, either.  The review team made three basic mistakes.  The first problem concerns the impossibility of partial implementation.  It would be possible to see how the scheme worked only if all employers relevant to a claim were included in the scheme – because partial information could not be enough.    The second problem was the belief that the systems would be in place to back up the processing of information – they weren’t – and that the agency’s main task would be chasing laggards and improving communications.

Beyond those two, however, there was a deeper problem,  intrinsic to the design.  We know from public statements that the design team was working on the assumption that claimants followed predictable pathways.  They took it for granted that  people would be moving between worklessness and stable, single employment.   However, people on low incomes, working in a ‘flexible’ labour market, have to be expected to move between states, often covering several employers, including some who may not be cooperative or explicit about what is happening.  Many people’s incomes go up or down rapidly and unpredictably.  The whole point of this scheme was supposed to be that it would offer claimants a personalised, seamless experience in real time.  To do that, there had to be  a system that followed the employee, not the employer.   It seems from these papers that they hadn’t even started to think about how that could be done.  As far as I can tell, long after the reset and redesign, they still haven’t grasped the nettle – currently, everything depends on the individual claimant reporting changes as they happen.   There has been no point during this process when the systems in place have promised to be minimally capable of operating as intended.


The Universal Credit Story: second instalment

The first of the documents requested, the Project Assessment Review,  is now available at the Campaign for Change website.  This was prepared in November 2011, a year after the initial announcement of the policy.  This was still done at a very early stage.  The tribunal decision contains a brief summary of the progress, which puts this in context.

The review rates the project at ‘Amber Red’, and asks for a further review to take place in March/April 2012.  The key issues I’d pick out are these:

  •  … the Programme  is a  little behind where  it needs  to be.
  • Dependencies do not appear to be being consistently formally managed.
  • … the Programme  still  feels  very IT focused and does not seem to have embraced fully the transformational nature of the business change at all levels.

A week before the review, Iain Duncan Smith was declaring:  “The programme is on track and on time for implementing from 2013.”  He later told Parliament, on 5th September 2013:

In the summer of 2012—or rather, before that, in early 2012—I instigated an independent review because I was concerned that the leadership of the programme was not focusing in the way that it needed to on delivering the programme as it had been originally set out. The internal report showed me quite categorically that my concerns were right: the leadership was struggling, a culture of good news was prevailing and intervention was required.

That is consistent with what we read here, but not with the repeated public assurances that the programme was on time and in budget.

What went wrong with Universal Credit?

I was on holiday last week when the DWP apparently ‘released’ documents requested by John Slater under the Freedom of Information Act concerning the situation prior to the “reset” of the Universal Credit scheme.  I’ve been trying to get access to the released documents, and will amend this entry when I do, but at present I’m faced  with two apparently inconsistent stories about what happened.  The version from the released papers has been reported by Natalie Bloomer in these terms:

The Department for Work and Pensions (DWP) was aware of problems with the cost and implementation of Universal Credit despite publicly saying the project was “on track and on budget” … In February 2012, an internal register recorded concerns about a lack of effective checks and balances which could lead to the project not being fit for purpose.

Computer Weekly has reported this in similar terms.  However, a very different story was reported by Mark Ballard in Computer Weekly last year.

Universal Credit was doing fine and right on time as the Department for Work and Pensions began rolling out its IT system in April 2012 … in November 2012, DWP major programmes director Steve Dover told Computer Weekly he had finished his work overseeing the design and delivery of Universal Credit. Everything had gone according to plan, on budget and on-schedule. … But then Cabinet Office, led by public sector reformer Francis Maude, produced its Digital Strategy for the wholesale automation of public sector work. Within three months, Cabinet Office had taken over Universal Credit, torn up its plans and even scrapped the software DWP had produced to run Universal Credit. … That didn’t stop DWP being blamed for the delay though, and Universal Credit getting flack for being the sort of failure people had been taught to expect from public computer projects.

Could these accounts both be true?  They could, because it’s possible for two different agencies to take very different views of the adequacy and operational viability of a system in development.  It was obvious enough, for example, that one of the holes in the system (checking people’s identity) couldn’t possibly be done adequately through computer based checks during the initial application, and that’s the sort of thing that would reasonably have raised alarm bells in the Cabinet Office.  I won’t be able to say more on that until I get to see the documents in more detail.

The PAC criticises Universal Credit (again)

The Public Accounts Committee has published a short, critical comment on the roll-out of Universal Credit.  They remark that

  • delays in the process mean that the system cannot be delivering the intended benefits
  • for the same reason, the business case cannot be up to date
  • “The programme’s lack of clear and specific milestones creates uncertainty for
    claimants, advisers, and local authorities, and makes it difficult for Parliament
    and  taxpayers  to  hold  the  Department  to  account.”
  • further delays may increase costs, and
  • the DWP has mis-reported the apparent benefits from its evaluation.

I made most of the same points on this blog in November and December  last year.

Rather more publicity has been given to an IFS report which notes cuts to the scheme while accepting that it maintains incentives.  One of the authors comments, “the potential gains from simplifying the working-age benefit system remain mostly intact. ”  I think that’s mistaken, in two ways.  First, the scheme still suffers from a fierce p0verty trap, or ‘marginal rate of deduction’; the failure to take into account council tax or national insurance contributions flawed the design from the outset.  Second, the cuts that are due to come in in April will mean that Universal Credit will no longer be available to many single people or couples working on the minimum wage.  That will mean that it’s pointless to keep oneself registered for UC after getting a job.  The scheme was initially supposed to be paid to people both in and out of work, so that people could move seamlessly between the states.  That is no longer true.