It is increasingly likely the government will have to write-off most, if not all, of the £303m spent so far on developing IT to support Universal Credit.
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Multiple sources told Computer Weekly that ministers will be offered the option of throwing all the IT away and starting again. My hunch is the Department for Work and Pensions (DWP) will prefer to avoid the political fall-out of such a decision, and will soldier on with what they have until a replacement is developed.
Even then, the existing work will eventually be phased out – so that £300m of taxpayers’ money is going down the drain one way or another.
Don’t forget too – that figure is only the amount spent with external suppliers. Nobody records the cost of internal staff time or any associated expenditure, so the true cost to the taxpayer will never be known.
The DWP has rightly been castigated in a scathing report from the National Audit Office (NAO) and by MPs on the Public Accounts Committee (PAC) – whose formal report on their investigation is due to be published any day now.
The department will continue to be closely scrutinised after the shambles of the Universal Credit programme to date.
But what about those IT suppliers? There has been almost no public examination of their role.
The PAC hearing raised the issue of a conflict of interest – an opinion confirmed by Norma Wood, interim director general of the Cabinet Office’s Major Projects Authority.
Tory MP Stephen Barclay suggested during the hearing that asking IT suppliers IBM and Accenture to conduct reviews of the value for money of their own work on the project was a conflict of interest.
“Did that worry you?” asked Barclay. “It did,” replied Wood.
DWP doesn’t want us to know the extent of any potential conflict of interest – Computer Weekly has requested, under freedom of information rules, copies of the reports produced by IBM and Accenture, but a formal response to our request has so far been put off twice, with officials citing the need to conduct a “public interest test” before deciding whether to release them.
What more public interest do they need than potentially £300m of public money wasted?
Of course, there is no evidence at present to suggest that any of the four main contractors for Universal Credit – HP, IBM, Accenture and BT – have done anything wrong or share any of the blame.
It is perfectly feasible – and it would not be the first time – that suppliers have simply followed instructions until those instructions led them down a dead end. “Nothing to do with us, guv.”
But, let’s be honest, it seems a little unlikely.
Computer Weekly learned last year that the then DWP CIO Philip Langsdale – before his tragic and untimely death – had hauled at least one of the suppliers across the coals, challenging them to prove what they had actually done for all the time they had billed the department.
It was revealed during the PAC hearing that the contracts work mostly on a time and materials basis, rather than a fixed price, so suppliers can invoice for every hour their staff spend on the project, regardless of what is delivered. DWP was also criticised for a lack of financial control over invoice approval – at one time, authority to rubber-stamp purchases had been delegated to a personal assistant.
We can’t even ask the suppliers to stand up for themselves, because the DWP has effectively gagged them. Requests for comment from press officers are referred back to the department.
The Cabinet Office is leading attempts to change government’s relationship with IT suppliers, introducing new controls and approval processes for IT contracts that avoid the sort of risky multimillion-pound megadeals with major suppliers that DWP went for.
Computer Weekly understands that instead, DWP formally opted out of that controls process – with the backing of secretary of state for work and pensions Iain Duncan Smith.
There is no guarantee that process would have made a difference, but the public deserves at least to know whether DWP’s decision was justified.
And that means the four IT suppliers should open themselves to the same public scrutiny for their work on Universal Credit – and that DWP should allow them to do so.