Universal Credit – Business case not approved, Verify not working, automation needed

SUMMARY:

The controversial welfare reform programme, Universal Credit, continues to face problems as it enters its eighth year of development.

The government’s long-running welfare reform programme, Universal Credit, has been given a damning review by MPs on the Work and Pensions Committee, citing problems that range from an unapproved business case, continued delays, identity verification issues and a need for more automation to reduce costs.

A new report out this week provides an overview of five years worth of Project Assessment Reviews (PARs) for Universal Credit – which the Department for Work and Pensions fought to keep private.

Universal Credit has a long history of problems dating back to its inception, over eight years ago. The programme was initially being developed by a handful of suppliers – including Accenture, IBM, HP and BT – but was later ‘reset’ after it was found that the technology was in tune with the policy requirements.

As a result, a ‘twin-track’ approach was created, where those already using the developed system by suppliers would be used as a testing ground for a new ‘digital’ version of the new Universal Credit system, which would be developed in-house by DWP.

The Committee has said that “it is to the Department’s credit that it has brought it back from that brink”.

That being said, the report out this week also notes that “the absence of performance monitoring and active contract management, and a paucity of the requisite skills and experience in the Department meant it was at a severe disadvantage in seeking to address shortcomings on the part of suppliers”.45 It adds that “suppliers were rewarded handsomely for ultimately pointless design and development work conducted without clear sets of requirements or an overarching objective”.

Many millions of pounds of public money were wasted. This should have been a national scandal, in our mind, one which was largely brushed under the carpet.

And despite improvements to the programme as a result of the new digital version of Universal Credit, the Committee notes that several problems still remain – most notably that a full business case for Universal Credit is yet to be approved, eight years into the project. DWP is currently receiving funding from the Treasury on an ad-hoc basis.

Commenting on the report, Chair of the Committee, Rt Hon Frank Field MP, said:

Perhaps the most damning point that emerges from any assessment of the Government’s progress on Universal Credit is that in the eighth year of the programme, the Department itself has yet to produce the full business case for its own mega reform.

The programme managers appear to expect us, the public, and the Minister responsible to take it on faith that UC will deliver the much improved employment outcomes they claim for the vast range of people – disabled, single parents, carers, the self-employed – who will claim UC. At the moment they are relying on the simplest cases – single, unemployed claimants with no children. They have produced no evidence to back up the key, central economic assumption of the biggest reform to our welfare system in 50 years. William Beveridge will be rolling in his grave.

The Reviews, which barely mention claimants, are also shot through with management gobbledegook. Were I the Minister in charge, I would have either rejected or ignored much of it entirely as totally incomprehensible. They were of course not designed for public consumption, but this major reform would surely have been served better by a much more transparent approach.

More delays

Delays have beset Universal Credit since its early rollout. The report out this week notes that DWP has been “consistently over-optimistic” about the time it would take to roll out UC. According to initial plans, it was meant to have been completed by October 2017. However, the digital service will now be rolled out to ten Jobcentres per month between February and April 2018, compared with over 60 per month in previous plans.

Not only delays, but costs continue to be a thorn in Universal Credit’s side too. The report notes:

Delays are not simply an embarrassment to the DWP: they are also expensive. The digital service is expected to be “predominantly online, integrated and accurate” and result in major savings from automation and self-service.

The UC digital service is currently operating with more staff and fewer claimants than the DWP expected. This makes it expensive to run. The March 2017 AAP found that costs per claim were £963 in January 2018. This was a substantial decrease on the £1,750 in April 2016, but still almost four times the target of approximately £250 by May 2019.

Verification

The report adds that the delivery of the programme is at risk if a “significant proportion of the service did not become automated”, as costs would become prohibitive.

Key to automation is claimant identity verification. In 2015, DWP intended to use Verify – the Government Digital Service’s verification platform – as an alternative to the face-to-face identification used in the live service. However, the performance of Verify, which has faced a number of problems since its launch, was not up to scratch. Only 29% of Universal Credit claimants could complete the Verify process, and “the levels of manual activities involved for the remainder were not sustainable at scale”.

It had been projected that 80% of claimants would be able to get identified using Verify.

DWP’s concerns around Verify resulted in it developing an in-house alternative in parallel called ‘Prove your Identity’. It is now being considered that the DWP will trial a third option, Verify LOA, a GDS product with a lower assurance standard than Verify. However, online verification continues to be a “significant risk to the programme”, the Committee notes.

Business case

Rather unbelievably, Universal Credit has still not had its full business case approved by the Treasury – over eight years into the programme – according to the report.

Major programmes follow a three-stage process for securing business case approval. The first, the strategic outline business case (SOBC), was approved after some delay in September 2014. The programme had also reached this stage in 2011, before returning to square one with the reset in 2013. The second, the July 2015 outline business case (OBC), was approved in November 2015, informed by the positive October 2015 PAR. This secured funding for the programme until the end of 2017.

The third stage, the full business case (FBC), has not yet been submitted. Since December 2017, the programme has been “funded by the Treasury on an ad hoc basis, with the latest extension being until April 2018”. The Department expects the FBC to be approved in March 2018.

My take

Although DWP should be commended for getting this programme back on track, considering its disastrous start, it is clear that significant problems still remain. Given the importance of Universal Credit – it’s a policy that impacts the livelihood of many vulnerable people – this isn’t something that should be taken lightly. The fact that Verify hasn’t proven to be a viable option for DWP is particularly concerning and the need for increased automation remains a concern.

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