Legacy IT to blame for UK's inflexible benefits system

Government department struggles with 30-year-old applications

The UK's chief finance minister, Rishi Sunak, has blamed legacy IT for his decision not to increase social security payments as inflation hits the highest rate in 30 years.

According to reports, the Conservative politician in charge of The Treasury was prevented from raising some benefits because of aging systems at the country's Department for Work and Pensions (DWP), which has overall responsibility for social security.

Some benefits were increased by 3.1 percent last month. The chancellor was told he could not introduce further increases because the systems at the benefits agency could not support this, said The Times. A government source said: "The system was simply not built to be flexible."

The department is partway through a longstanding IT project (15 years and counting) to transfer benefits to a Universal Credit system, but a significant number of claimants remain on older schemes. A 2020 report by the UK's independent public spending watchdog found the cost of extending the IT supporting those schemes until September 2024 hit £570 million ($703 million). This was "mainly because more claimants were expected to remain on those benefits for longer before moving to Universal Credit," Parliament spending watchdog the National Audit Office (NAO) said [PDF].

The Times claims older benefits schemes were supported by inflexible IT systems operating since the 1980s.

A DWP spokesperson did not deny this. "In 2024 we are fully transitioning to a modern benefit suited to the 21st century. Universal Credit makes it easier for people to claim support they are entitled to, is more generous overall than the old benefits, and it successfully met the demands of the pandemic."

The overall state of the DWP's legacy estate is illustrated by support for another function: pensions. In September last year, the NAO found that a 34-year-old computer system was one of the causes of a scandal which led to more than £1 billion of state pensions not being paid. This system was powered by one of the first Virtual Machine Environment (VME) mainframe computers to be installed by central government, supplied in 1987 by ICL Limited, which was later bought by Fujitsu.

The topic of legacy IT was brought into sharp focus last summer when an independent study by the Modernization and Reform Group found UK government spends $2.3 billion ($2.84 billion) of its £4.7 billion ($5.81 billion) annual tech budget on "keeping the lights on activities" on "outdated legacy systems".

In the US, according to a report by the Government Accountability Office, the government spent over $90bn in fiscal 2019 on IT. Most of it, the GAO said, was planned for operating and maintaining existing tech, including legacy systems.

In an analysis of 65 federal legacy systems, the watchdog identified its Social Security Administration (SSA) as having one of the 10 "most critical" high risk legacy systems. Its "system 10" is 45 years old, although most of the hardware is no more than five years old. In May 2016, it noted that the SSA had to rehire retired employees to maintain its COBOL systems. ®

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