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PAC: Universal Credit digital overhaul set back six months

Neil Merrett Published 03 February 2016

Committee warns that new system to support flagship welfare reforms may not be fully operational until late 2021, despite project having "stabilised"


The Public Accounts Committee (PAC) has expressed concerns over a persistent lack of clarity around the development of Universal Credit, with an additional six month delay now expected for the new digital service intended to operate the welfare reforms.

While the oversight committee accepted that the Department for Work and Pensions (DWP) had "stabilised" the project and made progress with its rollout aims, the department's aims to have the new benefit system fully operational by March 2021 were unlikely to be met for at least half a year beyond this date, the PAC said. This revised timeline is said to be based on Office for Budget Responsibility forecasts.

Publishing its latest findings on Universal Credit, which aims to merge employment and support allowance, income support, child tax credit, working tax credit, and housing benefit into a single payment, the committee also criticised the DWP for a lack of transparency around the project's progress.

After deciding to "reset" the programme back in 2013, the DWP has now committed to a 'twin-track' strategy plan where it will develop the new digital Universal Credit service at the same time as undertaking a national rollout of existing technologies designed for the programme.

The reset has been broadly seen by groups like the National Audit Office (NAO) as putting Universal Credit back on track, though specific concerns remain over the likely costs of failing to move off existing technology to the new digital service by 2018.

Among its recommendations, the report called for the DWP, by May this year, to set out and publicly report on its progress to meet clear milestones - used at present internally - to assess how systems are being developed and serving specific claimant groups and areas.

Over the same time period, the committee also wants the DWP to outline potential risks around the rollout of the programme, as well as possible contingencies and impacts on claimants themselves.

"If problems arise, the department will adjust how fast and how far it rolls out the digital service. This would prolong the use of the costlier live service systems beyond the current planned closure date of October 2018 and delay the realisation of the benefits Universal Credit is expected to deliver," said the report.

"HM Treasury has asked the department for contingencies if there are delays with systems which Universal Credit depends upon, such as the GOV.UK Verify service. Given the problems we recently heard about regarding the Common Agricultural Policy (CAP) delivery programme's use of GOV.UK Verify, it is reassuring to hear that these risks are being considered."

The committee also noted that the business case for Universal Credit had failed to account for the significant changes to tax credits announced in the Spending Review and Autumn Statement released late last year.

Among the report's recommendations, the PAC called for the publication of an explanation on how such changes will impact the business case for Universal Credit, with the NAO, in turn, reviewing its claims.

"The department and HM Treasury claimed that the Autumn Statement changes would make no major difference to the programme's business case, which forecasts that Universal Credit will deliver total net benefits of £20bn up to 2024-25, and around £6.7bn annually when it is fully rolled out and operating in a steady state," said the report.

"HM Treasury acknowledged that the cost of transitional protection for people currently claiming tax credits would increase by up to £150m each year following the Autumn Statement. When asked, the DWP could not clearly explain who would be covered by the transitional protection arrangements."

In her conclusions, PAC chairperson Meg Hillier accused the department of being "unable or unwilling" to answer to parliament on the status of its work, in turn creating uncertainty for claimants and civil servants running the overall Universal Credit programme.

"Since our previous report it has emerged there will be further delays before Universal Credit becomes fully operational, the full implications of which are unclear. It's also worrying that the approved business case for the programme has not been updated to take account of the Spending Review and Autumn Statement," she said.

"If taxpayers are to have any faith in what is already a complex and controversial project, then the department must provide clear information about the impact of these factors and the rollout of the programme as a whole."

Iain Duncan Smith, the secretary of state for work and pensions, has maintained that the full rollout of Universal Credit will be completed by March 2021, with the DWP rejecting suggestions of additional delays occurring.

"Universal Credit is on schedule and will be in all jobcentres by Spring - there is no delay. Once fully rolled out it will generate £6.7bn in economic benefit every year," said a spokesperson for the DWP.

Related articles:

Universal Credit digital service tests expanded ahead of UK rollout

NAO frets over the state of government projects

PAC questions Universal Credit digital contingency plans

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