The government’s £1 billion universal credit computer system is being rolled out across the country in October next year. Keith Cooper finds out if it will succeed where other inflated government IT projects have failed
Whitehall’s IT copybook is splattered with big, embarrassing black marks. Take the infamous Child Support Agency system, for example, in which 36,000 cases got ‘stuck’ in 2006, forcing 700 full-time staff to sort through them by hand. Or how about the £11.4 billion NHS IT infrastructure project? Instead of electronically revolutionising the handling of patient records, it become another ‘costly failure’, the Cabinet Office minister Francis Maude admitted last year, as the project was slam dunked into the government’s ‘my bad’ bin.
So what of the coalition government’s next big computer scheme? How will it be judged for the design, implementation and day-to-day functioning of its universal credit system? Ministers’ appetite for ambitious IT packages has not been deflated by their officials’ poor track record. When flicked on nationwide in October next year, its £1 billion universal credit computer system must process 19 million claims from an estimated 8 million welfare-dependent households. Not to mention 6.3 million applications from low-income families, all hoping for a share of £50 billion of child and working tax credits.
The benefits of universal credit are well rehearsed by the Department for Work and Pensions, which is managing the project. By rolling multiple benefits, tax credits and allowances into one payment, it aims to simplify a Byzantine welfare regime which few fully grasp. It should respond rapidly to fluctuations in claimants’ circumstances by hooking into the tax office’s new IT infrastructure which will for the first time record workers’ earnings in real time. Together the two IT systems should be cheaper and more fraud-resistant, ultimately helping ministers fulfil their ambition of slashing in-work poverty while ‘smoothing the transition’ of citizens into and out of work, the DWP claims.
The sheer scale of constructing so grand a project after so many costly failures is causing jitters among local authorities and landlords, however. Their incomes and those of their tenants depend on the system’s success. ‘Past experience of national IT projects… shows that the risks are great and should never be under estimated,’ York Council warned in response to the government’s universal credit white paper in 2010.
‘There is a poor record of Whitehall IT projects. Critics are saying this is a matter of concern,’ says Andy Tate, policy officer at the National Housing Federation.
Worries about a repeat poor performance were compounded when the government awarded two mega contracts to build and maintain the universal credit IT system last December. They were won by just two major firms: Accenture and IBM. IBM declined to comment, but a spokesperson for Accenture says: ‘We are a large organisation which has delivered projects like this across the world.’
Although both contractors have proven track records at delivering large-scale projects, such weighty contracts - at £500 million a piece - resemble the lead shoes which the government itself says hobbled previous IT schemes.
‘Projects tend to be too big, leading to greater risk and complexity,’ admits the Cabinet Office’s IT strategy, published just months before the contracts were awarded. ‘To address these challenges, we have done, or will… create a presumption against projects having a lifetime value of more than £100 million.’
Perhaps someone at the DWP didn’t get the memo.
A new approach
The department insists that it has adopted a different approach to the troubled ‘big bang’ private and public sector IT programmes of the past. ‘We are building a new system to deliver universal credit incorporating many existing IT systems run by the department today,’ a DWP spokesperson says.
The demands on this massive project have raised several understandable concerns among landlords. One of the Chartered Institute of Housing’s chief worries is whether it will cope with the volume of claims. Backlogs build up quickly when IT systems fail, Sam Lister, policy and practice officer at the CIH says. ‘Even if the start is relatively slow the [demand] will rocket up quite quickly. The problem with backlogs is that once it starts to become a problem it is then very difficult to dig your way out.’
Logjams are a common characteristic of failing government IT systems. The Child Support Agency’s computer system was blighted by a snarl up which got out of control. A total of 267,000 new and 66,000 old cases were left waiting to be cleared at one stage. The CIH estimates that around 230,000 housing benefit claims are made each month and four times that require updating. That’s not even counting claims for tax credits or jobseeker’s allowance.
The DWP says the new system - which is already almost built - is undergoing internal testing before six local authorities pilot it next April. ‘Universal credit pathfinder areas will test the system with local authorities, employers and claimants in a live environment six months before universal credit is rolled out across the country in October 2013,’ the spokesperson says. ‘The IT systems behind universal credit are on time and on budget.’
The test period and months leading up to the launch are a crucial last chance for landlords to influence the development of the IT system. Thankfully, DWP officials appear to have adopted a listening ear instead of the talk-to-the-hand attitude which characterised negotiations during the passage of the Welfare Reform Bill. ‘There is still time for the government to listen to concerns from the sector,’ says the NHF’s Mr Tate. ‘The DWP seems willing to keep people informed and to have a dialogue about various aspects of the system.’
The federation is pressing for a flexible system which can be ‘tweaked’ to accommodate unforeseen problems. Housing associations would be particularly concerned if the IT system set in aspic a narrow definition of ‘vulnerable’ claimant, before the pilot projects finish.
Wigan Council (see case study, below) is one of the six pathfinder councils which will road test the regime. The Lancashire authority already has considerable experience in helping its tenants make welfare claims online.
Claimants deemed vulnerable will have their housing support paid directly to their landlord rather than into their own bank accounts. There are several councils testing different aspects of the universal credit system.
‘There is an issue with the timing here,’ Mr Tate says. ‘Universal credit is due to be introduced in October 2013 and the demonstration projects are not finished until June 2013.
‘We expect most key decisions will be taken in the next few weeks. Our worry is that vulnerability could be defined too narrowly.’
Both the federation and the institute share two further worries about the universal credit IT system that is set up around a ‘digital by default’ principle that most claims will be made and updated online, plus its rigid requirement for single rather than multiple payments.
Concerns about the ‘digital by default’ assumption are taken seriously by the DWP. The universal credit pilots will explore various ways of supporting people to make offline claims.
‘The pilots will not create a one-size-fits-all model, but will look at how councils can provide solutions fitting with local needs,’ a department spokesperson says. ‘We have always been clear that while universal credit will be accessed online by the majority of claimants, there will always be face-to-face or telephone support in place for those who don’t have access to the internet or are not used to going online.’
Concerns about the new system’s commitment to single rather than multiple welfare payments seems to concern the DWP less. Lobby groups including Family Action, Save the Children and Citizens Advice all urged the government to build a ‘firewalling’ module into its universal credit system. This would allow some of the credit to be paid if there is a computer error. Without such a safeguard, families would be left with ‘no income whatsoever to live on until the problem is resolved’, they argued, according to a parliamentary briefing.
The firewalling idea was rejected by work and pensions secretary Iain Duncan Smith, who argued that splitting the credit missed the whole point of the regime. A spokesperson for the DWP says that ‘short-term advances will be available [under universal credit] in the same way that they are now if they are in urgent financial need’.
Landlords, councils and the tenants whose livelihoods all depend on the success of universal credit will be hoping contingencies like this are the exception rather than the rule, and that Whitehall earns a tick rather than a black mark for its latest IT venture.
Testing universal credit
|What’s being tested?||When?||Who’s involved?|
|Six ‘demonstrator’ projects and specifically testing direct payment of benefits to tenants, rather than landlords||June 2012 to June 2013||Scotland (Dunedin Canmore housing association)|
North of England (Wakefield Council, Wakefield and District Housing),
London (Southwark Council, Family Mosaic),
South of England (Oxford Council, Oxford Citizens Housing Association),
Wales (Torfaen Council, Bron Afon Community Housing, Charter Housing Association),
West midlands (Shropshire Council, Bromford Group, Sanctuary Housing, The Wrekin Housing Trust)
|Local authorities will for 12 months test the ‘face-to-face support some people may need to make claims for universal credit’||Autumn 2012 to autumn 2013||Bath and North East Somerset Council,|
Birmingham Council, Caerphilly Council, Dumfries
and Galloway Council, Lewisham Council, Melton and Rushcliffe councils (as a partnership), Newport Council, North Dorset Council, North Lanarkshire Council,
Oxford Council, West Dunbartonshire Council,
West Lindsey Council
|Universal credit pathfinder will start roll out of to universal credit ahead of the rest of the country||April 2013||Tameside, Oldham, Wigan and Warrington councils. Oldham and Wigan are also running pre-pathfinder pilots. Oldham is looking at improving claimants’|
access to community-based support and Wigan is increasing access to online services and money management skills, working with a local credit union
Gearing up for universal credit: the Wigan experience
Wigan Council began phasing out paper benefits forms in April last year. Since then, it has cut down the number of hard-copy claims from 1,500 a month to just 50. More than 55 per cent of all claims are made online by residents using ‘e-forms’, with no face-to-face help from officers. The transition has been aided by Wigan and Leigh Housing, the council’s arm’s-length management organisation, which manages its 22,500 homes.’The council approached us as we are the largest provider of housing [in the area],’ says Vicky Bannister, director of housing management at the ALMO. Wigan and Leigh has found that its tenants need more help than the council’s average claimant. ‘At the moment 74 per cent of our tenants are assisted by our staff to do an online form, but that is just the first year.’ Ms Bannister adds: ‘The switch to universal credit will really hammer home the importance of the internet. It isn’t a luxury anymore, it is essential.’