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Labour sticks with Universal Credit pause plan

Neil Merrett Published 27 November 2014

Party still in favour of temporarily halting benefit reform project to review progress with NAO, as DWP maintains secure delivery of programme is on track and under budget


The Labour Party remains committed to pausing the rollout of Universal Credit for a three month review period should it come to power next May, despite a new National Audit Office (NAO) report finding the government has significantly reduced the project's delivery risks over the last year.

Universal Credit - designed to merge employment and support allowance, income support, child tax credit, working tax credit, and housing benefit into a single payment - has this week begun running limited testing of a new digital service planned to eventually oversee distribution of the revised welfare payment.

The Department for Work and Pensions' (DWP) implementation of the flagship welfare reform project has nonetheless continued to prove controversial over concerns about its cost and feasibility, with bodies like the Public Accounts Committee (PAC) expressing concerns that the project remains in trouble.

Earlier this year, Labour announced it would therefore seek to halt the ongoing implementation in order to conduct a thorough review of the programme that the DWP now says will be implemented by the end of the current decade at a predicted cost of £1.8bn - down from initial predictions of £2.4bn.

The party said it still intended to move ahead with plans to halt and review current progress on the project and its new digital system if it comes to power next year. Labour said it would also request the NAO produce quarterly reports on Universal Credit's implementation moving forward to address concerns about the project's viability. Labour last year formed a rescue committee to outline a plan for how it should proceed to address concerns about the viability of the welfare reform project in government, over concerns about delays to Universal Credit.

The Committee, whose work was concluded back in June, recommended to minimise the number of changes the party seeks to make to the Universal Credit scheme should it come to power next May, after pledging to ensure the system is both technically and financially viable.

Labour's commitment to pause the rollout follows the publication of an NAO progress report yesterday (November 26) that concluded it remained "too early to determine" if the DWP's implementation of the welfare reform would achieve predicted savings.

The auditor warned that any further delays to the planned 18 month rollout of its new Universal Credit digital system could see the taxpayer covering £2.8bn in further staff costs to support the partly manual live service currently being introduced across the UK without increased investment.

The report said that a decision to 'reset' Universal Credit's implementation last year in favour of taking a twin-track approach to develop the digital service while simultaneously rolling out the project at selected UK tests sites using existing technologies had put the project at a sounder basis - albeit it at "significant cost".

Responding to the NAO report, PAC chairperson Margaret Hodge accused the DWP of "still not getting it right" on implementing Universal Credit, accusing the department of poor management that had wasted time and taxpayer funds.

"Now the digital service is already delayed by six months and the department has just 18 months to get it up and running as planned," she said. "A further delay in rolling out the new system of just six months could lose us £2.3bn in societal benefits and the department has no contingency plans in place."

Despite Hodge's criticisms, work and pensions secretary Iain Duncan Smith maintained that his stewardship of Universal Credit would ensure value for money, adding that he anticipated other departments in future would mirror its current gradual rollout approach to implement projects securely.

"I would much rather make it clear that we want to deliver this thing safely and securely. After all, we have listened to the MPA and we had the NAO in to look at it last year. We took all the advice, and we are rolling it out in the way that it should be rolled out. I have to say -- this is not arrogance -- that I believe that future government programmes will be best rolled out using the test-and-learn process that is securing these roll-outs," he said.

Speaking in the House of Commons this week ahead of the release of the NAO progress report, Duncan Smith said that the gradual implementation of the project had helped de-risk the rollout - a stance supported by the Major Projects Authority (MPA).

Duncan Smith told parliament that as part of the implementation, the Universal Credit business case had now been signed off by the treasury. The NAO has nonetheless maintained that only one of the three business cases required for the project - the strategic outline business case (SOBC) - had been agreed by the Treasury.

A "lot more work" therefore needed to be done for the two remaining business cases to provide detailed plans on project involving costs and operational functions, though the auditor said this was deemed proportional to the current progress of Universal Credit's implementation.

Responding to the secretary of state in parliament, shadow work and pensions secretary Rachel Reeves questioned the DWP's ability to meet the current timetable for implementing Universal Credit, pointing to what she called the "glacial pace" of its roll out.

"We all know that simplifying and integrating our benefits system has the potential to help people into work and to progress in work," she said. "That is why the opposition have always supported the principle of universal credit and want it to succeed, despite the secretary of state's best attempts to make a complete and utter shambles of it."

Related articles:

NAO warns over costs of further Universal Credit digital delay

DWP: No evidence Universal Credit "unworkable"

DWP abandons Universal Credit claimant goal

Labour committee outlines Universal Credit "rescue" strategy

Treasury still to fully sign off Universal Credit business case

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