Tagged: Universal Credit

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.

Changing the Universal Credit Work Allowance

In the New Statesman, Emily Thonberrry MP bemoaned the effect of cuts on Universal Credit’.

“For all the flaws in its implementation, Universal Credit was actually a perfectly good idea, at least in theory. By bringing a number of benefits and tax credits together into a single monthly payment, which was available to those in work as well as out and would be gradually withdrawn as earnings increased, the government was working to the fundamental principle that work should always pay – and be seen to pay. … It is becoming increasingly clear that cutting tax credits and cutting Universal Credit is effectively the same thing. They hit the same families in the same way – the only difference is in the timing.”

I’ve commented often enough about the deficiencies of Universal Credit, which was never a ‘perfectly good idea’.  The second part is more interesting.   The ‘work allowance’ is not quite the same as an earnings disregard.  There is an amount that Universal Credit claimants can claim before they start to lose income (£111 per month for single people  and couples – that’s most current claimants – rising to £734 for a single parent who doesn’t rent).  Then there is a gradual loss of benefit, without a clearly defined upper limit.

From April 2016, the government intends to change that range from zero to £394.  Most existing claimants will start at zero; unless they rent, their Universal Credit will probably have disappeared by the time they work half-time on a minimum wage (£7.20 an hour from April).  I’ve always been sceptical about claims that there is no ‘incentive’ to work – people who say it usually don’t understand how low current benefits are.  What the change will remove is any incentive to stay in contact with Universal Credit or Jobcentre Plus, because the benefit will be withdrawn so sharply once someone gets part time work.  That undermines the idea that people will move seamlessly between states.

How sound is the case for Universal Credit?

Following my FoI request and a conversation with someone who ought to know, I’ve been doing a little chasing about the Business Case.  I’ve been told that there isn’t likely to be much difference between the (unpublished) Outline Business Case and the Strategic Outline case.  That wasn’t published last year, but the National Audit Office listed the main claims:

UC Business Case

Some of these figures are difficult to interpret, and that’s not just because the rollout of UC has been much slower than anticipated.

  • Line 4, listing an increase in benefits spending, reflects the potential costs of improved earnings disregards but is subject to change:  unemployment has been lower than expected, coverage has been reduced and benefit rates and tapers are under review.
  • Line 6, the gain to governments from increased unemployment, is unclear.  The initial returns from early cohorts do suggest a marginal  increase in employment – 3%, rather than the 8% that the government is claiming – but it’s not clear that there will be a commensurate return to the government, either through taxation or through benefit foregone.  The same issues reflect on line 9, wider gains from increased unemployment.
  • Line 8, Distributional benefits (non-cash), represents most of the supposed gain from UC – indeed, the Business Case hangs on it.  This has not been explained directly, but last March the Treasury published a distributional analysis accompanying the Budget, including this chart:
  • UC Distributional EffectWhile I’m happy to agree that a 3% increase in the income of people in the bottom tenth would have positive social effects,  I can’t quite see how this will yield a distributional benefit of £15-30 billion over twelve years.

The most obvious questions relate to line 5, Reduced overpayments.  This is supposed to account for £14 billion over twelve years, or £1.16 billion per annum.  The net total loss for all DWP benefits (including Housing Benefit) through error and fraud has recently been given as £2.1 billion a year.  Even if we use the gross figures, before recovery of overpayments, the total overpayments for all the benefits being incorporated into Universal Credit is £1.4 billion. Net overpayments for Tax Credits came, on the most recent figures I have, to just over £1.5 billion.  So it looks as though the Business Case is claiming that net overpayments will be reduced by something between a third and a half.

We know rather a lot about overpayments, because there are detailed estimates of how they happen.  The main reasons for overpayment are  confusion about employment and earnings, household composition and capital holdings.   Even if Universal Credit deals with the first of these, there is nothing it can do about the other two.  Nor, when we get down to detail, is UC going to be able to resolve lots of the smaller problems, such as people becoming hard to trace, residency rules or resolving whether people are really entitled.  The assumption that Universal Credit will make these issues disappear looks like wishful thinking.



Working while on Universal Credit

The DWP is claiming that Universal Credit is getting people back to work, and the Guardian reports:  “Research finds 71% of UC claimants move into work in first nine months of their claim compared with 63% of jobseeker’s allowance claimants”.  Well, that’s what’s reported in a glossy pamphlet, Universal Credit at Work.  Here’s the graph they use:

UC DWP version

The report that it’s based on doesn’t however say that.  The graph that the DWP has chosen to use, Figure 7 in that report, does not show that people have “moved into work”.    It shows, rather, the possibility that people will have done any work at all at any period while on benefit.  The original title of Figure 7 is:  “Impact of UC on cumulative employment rates for 8,300 new UC claims in 10 offices between July 2013 and September 2014”.   The figures for occasional hours are, unsurprisingly, more favourable for Universal Credit than for JSA, because the  system allows for that.

By contrast, the figures for “snapshot” employment – whether or not people are doing any work at the stated time period – are much less favourable, running 3% higher for UC claimants after 9 months.  Here’s Figure 6 from the report, which shows who was currently working from the same cohort:

UC Actual figures

The title of that figure – part of the information dropped from Universal Credit at Work – explains that this was done early on in the system (when UC was not being rolled out to areas of high pressure).


The Universal Credit business cases: a reply to my FoI request

I have received a response to my Freedom of Information request about the Universal Credit Business Case.  I asked:

”(a) What is the expected timetable for the submission and approval of the Outline Business Case and the Final Business Case?
(b) When will the business cases be published and subject to public scrutiny?”

The Treasury response referred me to Sharon White’s oral evidence to the Public Accounts Committee last year, which I’d already cited in my query, but continued:

The first stage of this process, the Strategic Outline Business Case, was agreed for Universal Credit in September 2014. The next step, the Outline Business Case, is currently with Treasury Ministers for approval. The Full Business Case will follow for Ministerial approval by the end of 2017. This is in line with the process within Government and a Programme of the scale and complexity of Universal Credit.

With regards to your second question, I can confirm that the Government is not planning to publish the Universal Credit Business Case. The Government does not generally publish internal business cases.

Additional note:  It appears, from evidence to the Public Accounts Committee, that the Ouline Business Case had actually been approved shortly before this letter was sent.  The PAC was rather surprised to hear this, too. 

Universal Credit – can we distinguish disallowances from withdrawn claims?

David Webster’s latest sanctions briefing will shortly be listed on the CPAG website.  He comments that the transfer of single people to Universal Credit seems to be distorting the statistics.

The Universal Credit statistics have already marked a large discrepancy between the number of people receiving the benefit, and those who have claimed  – 251,000 claims, but 141,000 current recipients.  There’s no immediate way in that of distinguishing rejected claims, sanctions and disallowances, and terminations.

I’ve recently had the opportunity to observe the Universal Credit process in a Jobcentre, and I think there may be an anomaly in the process.   The way it works is that people make an initial claim online, they go to the Jobcentre, and they’re told there what the conditions are.  Then they have to wait – the payment date is 5-6 weeks after claim, and the Jobcentre interview is meant to happen very shortly after the claim, so by the time of the JCP interview they’ll probably have four or five weeks more to wait.  After that point, JCP staff told me, a fair number of people disappear – they just don’t come back in, and JCP don’t know why.  But there is no easy way to terminate a UC claim.  The JCP officers aren’t expected – or permitted –  to handle this.  It’s left to claimants  to inform the Service Centre by telephone if their circumstances change.  If they don’t there’ll be warning letters, a sanctions procedure,  possible disallowance and so on.

There are lots of things we don’t know here.  How many people are put off by the waiting period?  How many find work shortly after claiming?  Are there people giving up claims they should carry on with while in work?  Are there people who think that telling one DWP officer ought to be enough?  There has to be a suspicion that the process of sanctions and disallowance is clocking up disallowances in cases where conditionality is not the issue at all.  If that’s happening, it’s an own goal for the DWP, because the UC figures may look worse than they should.

Whatever happened to the case for Universal Credit?

A report in the Mirror suggests that the business case for Universal Credit has been set back and won’t now be fully considered until the end of 2017.  There are supposed to be three stages in the preparation of a business case, before funds are spent on a project.  The first stage, the Strategic Outline Business Case, wasn’t passed until a year ago.  That’s four years after work started and  eighteen months after the programme was “reset” or started again from scratch.   The details of the Strategic Outline have still not been fully published, but several documents refer to them.  The second stage, still to come, is the Outline Business Case; the final  third  stage, the final Business Case, is supposed to be the point at which the programme starts.  But there were 141,000 claimants receiving Universal Credit in October 2015, and the administrative expenses since 2010 must now be approaching £2 billon – they are supposed to reach £15.85 billion by 2021.

I put in a Freedom of Information request earlier this month to the Treasury, asking for the schedule for consideration of the remaining elements of the Business Case.  The Mirror report says this:

With no sign of approval by November, both Spicker and Field requested updates from the Government on the policy, but was told the business case was “with Treasury ministers for approval”.

Actually, I haven’t received a reply yet – I assume this means to say that Frank Field has, and the date we should be looking at is two years away.  The details we have of the Strategic Outline case implied that Universal Credit’s costs should be offset by its immense social benefits, including reduced worklessness, higher takeup and reduced fraud.  This claim will have to be reconsidered:  if the system hasn’t been implemented as planned, the supposed benefits can’t be realised either.

Universal Credit: working smoothly?

After I posted the previous item on Universal Credit, I received a tweet from Bill Irvine at UC Advice and Advocacy  questioning the DWP’s claim that Universal Credit is working ‘smoothly’. I’ve had no direct experience of the process myself, but I’ve been looking around to see what information I can pick up; most of the information on the net is concerned with the way the system is intended to operate, rather than the way it actually does in those places where it’s been rolled out. I’d be grateful for any information people hold.

A useful posting by Claire Pearce-Crawford at LinkedIn’s Welfare Reform and Housing Group, however, makes some important observations about the process followed in one case with an adviser present.  LinkedIn isn’t available immediately to all, so with her permission, I’m duplicating part of it here:

Tenant visited JCP on a Friday, the systems were down and he was advised to call back Monday or use his own PC to make a claim on line. Claimant advised he did not have his “own” PC. He attempted to use the JCP telephone but the systems were unavailable. He left the building and was asked to return Monday.  My advisor actually made the hour long claim using company telephone on the Friday, to prevent a delay in claim.

The interview at JCP
• The interview took over 1 hour, mainly as the start of the interview involved the advisor taking copies of identification, stamping every page of the telephone transcript, and asking the claimant to sign every page.
• The claimant was not directly asked Tier 1 or Tier 2 questions.
• An APA (Alternative Payment Arrangment)  was explained but never offered.
• The claimant was asked who the landlord was but not asked if there were current rent arrears, and was not advised to supply a copy of the tenancy agreement/rent statement.
• The telephone number was given to the claimant for a budgeting advance, but the claimant was told he could not apply for one for at least 24 hours.
• It was very much like a JSA interview but with contracts drawn up.

Other points of interest:
• The JCP advisor only has read only access to the UC claim account, ALL changes have to be made by ringing the service centre ( even small changes i.e. telephone numbers)
• Sanctions were briefly explained
• The JCP coach has no access to payment information, dates or amounts, this is all done by ringing the service centre. (if the coach/advisor can get through).

I’d draw four points out from this.

  1. The initial claim – new claims are still supposedly confined to straightforward cases – is taking much too long for a process that needs to be rolled out to several million people.  The basic pattern appears to be based on the New Jobseeker Interview developed for JSA.  That process bundled claims together with the Jobseekers Agreement, previously two processes, and the more that the system tries to do at once, the longer it will take.  (There are other ways of doing things.  In France, local authorities and selected advice agencies are commissioned to prepare and verify everything needed in an initial interview, and are paid for each complete claim they prepare.)
  2. Claire reports that even simple things like correcting addresses and phone numbers have to be phoned in to the service centre.  This is a major obstacle to efficient administration – the DWP already receives millions of calls, too many of which are people discovering they’ve got to the wrong office.  They need to be looking for ways to cut down phone contact, not to increase it.
  3. Complexities, including Alternative Payment Arrangements, the ‘tiers’ identifying vulnerable people and budgeting advances, aren’t mentioned in the initial process.  That  means that claimants and advisers will need to raise them before they get taken into account at all.
  4. The initial process doesn’t give any information about key issues – when the money will come or how much it will be.  I’ve previously argued that basing claims on the anniversary of the claim makes no sense to anyone and adds to the unpredictability of the system.  What we need is a uniform pay day.

Universal Credit is still largely confined to relatively uncomplicated cases – single people who are workless.  This is subject, however, the principle of the ‘lobster pot’, which means that people who have started on UC will stay with it; as people’s lives change, there are other sorts of case that have to be dealt with.  Lord Freud explained to the House of Commons Work and Pensions Committee  how the  scheme has to deal with a ‘rather complicated’ case.

“Just to take an example of one of the more complicated cases we’ve had: we had a claimant who met a partner who had a son who wanted to move in together and they had therefore need to move house and had his own son moving in with them over the weekends.  So the new partner was in receipt of Income Support.  So what we get out of that rather complicated example was a partner claim, a child, termination of Tax Credit, termination of Income Support and a change of address, and we were able to work that through on policy terms on a manual basis to find out how these systems actually work …”

There are several troubling aspects of this little story.  One is that the system has clearly not been designed to take into account the most basic and common changes in people’s lives.  The assumption has been made that people fall into a defined category which then has to be modified, rather than the more obvious approach of developing a series of stand-alone modules to deal with the constituent elements.  Second, half the ‘problems’ Freud is identifying seem to relate to the transition to Universal Credit itself.  If that’s right, this is a fundamental design issue likely to be revisited with every transfer.  Third,  the development of Universal Credit has been going on for several years now, and ministers are still being surprised by the idea that people might form new households.  What will happen, one wonders, when UC does start to deal routinely with genuinely difficult cases?