The botched implementation of the Department for Work and Pension's Universal Credit system looks set to lead to a multimillion pound write-off of IT assets, MPs said today.
The Public Accounts Committee - echoing a report from the government's spending watchdog in September - reckoned that at least £140m will have been wasted by the DWP because of failures with the deployment of new technology to create a one-dole-to-rule-them-all service for benefit claimants in Britain.
"The management of the programme has been alarmingly weak," said Labour MP Margaret Hodge, who chairs the panel of cross-party politicos. She added:
From the outset, the department has failed to grasp the nature and enormity of the task; failed to monitor and challenge progress regularly; and, when problems arose, failed to intervene promptly. Lack of day-to-day control meant early warning signs were missed, with senior managers becoming aware of problems only through ad hoc reviews.
Pressure to deliver a programme of this magnitude within such an ambitious timescale created a fortress culture where only good news was reported and problems were denied. Because they had no overall view of what was going on and no system to monitor progress, the Department’s Universal Credit team became isolated and defensive.
The PAC report highlighted previous criticisms that the Work and Pensions minister Iain Duncan Smith has attempted to dismiss by blaming senior civil servants who no longer work on the UC project.
Hodge noted that the current system - which is currently being "reset" - lacked the necessary security components to prevent fraudulent claims. The MP added that it would be wrong for IDS to try to stick to unrealistic deadlines to deploy Universal Credit across the country by 2017, given that it has been hampered by problems from its inception.
“The department needs to focus on the long-term successful implementation of Universal Credit," she said. "It should evaluate what benefit it can derive from the existing IT but must not throw good money after bad by introducing a short-term fix that does not stand the test of time."
The committee heard from the Cabinet Office's Major Project Authority, HM Treasury officials and bosses at the DWP who are overseeing UC. The new system is intended to cut and shut six different strands of the UK's benefits system into a single service for claimants.
In September, the National Audit Office said that the DWP had wasted £34m in taxpayer money on the project and added that it had failed to show value for money by being "overly ambitious in both the timetable and scope of the programme."
Today's PAC report is even more damning about the crisis-hit Universal Credit programme, which is expected to cost the public purse £2.4bn up to April 2023. As of April this year, the DWP had splurged £425m on the project, with most of that cost being spent on IT (£303m).
Some of the IT assets that have been delivered cannot be used in the programme and so must be written-off; whilst initial estimates suggest the write-offs could amount to at least £140 million, we heard evidence that the precise extent is as yet unknown because the Department’s impairment review is not yet complete, relying so far on supplier self-assessment.
Identity crisis squared
The Register understands that identity assurance was one of the key issues to have troubled the project. One source, an ex-contractor on UC, told us in confidence that the Government Digital Service - which rebranded Directgov to GOV.UK - insisted that the DWP use its delayed identity programme instead of the method for which the department had originally budgeted, which in turn had crippled that part of the system.
Management of the project has also been disastrous, with a revolving door of bosses being brought in to steer Universal Credit in the right direction.
Its current chief, Howard Shiplee, recently distanced himself from the project's failures by proclaiming in the summer that he was confident that the DWP was "now back on course and the challenges are being handled," after he had parked it for 100 days to "reset" the programme.
The PAC put forward six recommendations to the DWP today. It said:
- Robust oversight should be put in place.
- Ministers and senior civil servants should monitor progress carefully - even where concerns are expressed.
- the DWP - as a matter of urgency - must complete its own impairment review; implement suitable payment controls; and show that it is getting value for money through future negotiations with suppliers (the main vendors working on the IT system are: HP, IBM, Accenture and BT).
- A new pilot programme should be brought in to help the department prepare for its revised plans for Universal Credit, which are yet to be approved by ministers.
- A high criteria needs to be set by the Treasury and the MPA so that the DWP's new proposals can be adequately scrutinised.
- The MPA should be given stronger powers to monitor and intervene on the project where problems do arise.
Yet another case of government IT-itis?
The DWP, which insists that Universal Credit will eventually bring a £38bn economic benefit to Brits, dismissed the report for failing to "take into account our new leadership team".
It added: "We don’t recognise the write-off figure quoted by the committee and expect this to be substantially less. The head of Universal Credit Howard Shiplee has been clear that there is real potential to use much of the existing IT. We will announce our plans for the next phase of UC delivery shortly."
An anonymous source familiar with the initial implementation of the Universal Credit system recently told El Reg that the project was "fucked" from the start because it was beset with the classic symptoms of government IT-itis.
We were told it was "not because no one's doing agile properly, but because there's an endemic culture that is almost totally the opposite of what it would need to be in order to deliver effective IT change."
The culture of secrecy and back-slapping within the project was also a big problem for UC, our source said.
"The policy team act as a one-way buffer between ministers and the programme. This is a killer." ®