Tight deadlines left the Department for Work and Pensions with little choice but to use "unproven" agile methods to develop its £2bn Universal Credit (UC) system, said the Cabinet Office Major Projects Authority (MPA) in a confidential report obtained by Computer Weekly.
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The Department for Work and Pensions (DWP) systems department, already pressed over UC, has meanwhile become so concerned over its dependence on another risky development - HM Revenue and Customs' Real-Time Information (RTI) PAYE system - that it has begun work on a contingency system it might use in the event of RTI's failure.
Software experts have also warned HMRC that RTI cannot be completed by its April 2013 deadline. Its launch coincides with that of UC, and UC will depend on RTI data for its benefits calculations.
The MPA nevertheless pinned its reputation on the success of UC, approving the project and applauding its progress. Its review declared confidence in its success, despite the risks inherent in agile.
"The use of an agile methodology remains unproven at this scale and within UK government, however, the challenging timescale does present DWP with few choices for delivery of such a radical programme," said the MPA's confidential Starting Gate Review of Universal Credit.
Piloting this methodology on a programme such as UC did pose a risk, said the MPA, but it added DWP's punt on agile was outweighed by the risk of implementing yet another government IT project that went over time and over budget.
Confidence in agile delivery of Universal Credit system
"There has been a tendency to wave the term 'agile' around too breezily, as if it means normal concerns can be ignored," said former treasury secretary Stephen Timms MP.
He would have been pleased as a minister to receive such a broadly positive report, he said. But it had been redacted, leaving a question over what other risks had been identified.
The Starting Gate Review said DWP made an "impressively strong start" on UC, a project that involves turning £74bn of expenditure on working age benefits and tax credits over to a single computer system, integrating numerous old benefits systems, and shunting a majority of citizens online, all while restructuring the DWP, launching other major systems and cutting its running costs by £2.7bn in three years.
The MPA's joint Cabinet Office and Treasury team said it had a "high degree of confidence" that DWP would succeed. It drew its confidence from the strong confidence that senior staff "up to and including the highest levels" had in their agile delivery plan.
But the plan itself was both hybrid and unique, even in the world of agile, it said. It was using conventional, multi-million pound contracts with large suppliers to deliver the system. RTI was being developed simultaneously, but to a conventional "waterfall" methodology.
DWP gained agile experience using an unconventional approach developed by Accenture. It contracted lawyers to design contractual add-ons to accommodate the agile approach. Emergn, an agile systems supplier, developed an agile methodology that would apply to DWP's unique situation. Emergn refused to comment.
Alistair Brown, delivery director at agile systems supplier Valtech, was unable to cite any agile project as large as UC, but he had no doubt it could be done. "I've seen agile used in government projects of scale," he said. "Have I seen it done on something of that size? Is it unwise? My guts don't tell me to run a mile."
Paul Wilson, director of Edge Case, a member of the Agile Delivery Network engaged to bring more SMEs in to work with DWP, said: "Given that every other project of that scale fails anyway, everything else has been disproved."
Alternative government development model was required
DWP repeated the MPA's favourable wording and said UC was "on time and on budget".
"Drawing on lessons learned from the past, it is being developed in radically new and more effective ways than past government IT programmes," said a DWP spokeswoman in a statement.
HMRC said Friday it had pared back its ambitions for RTI to make them more realistic after software developers said the job couldn't be done in the time given. "Of respondents who expressed a view on the timescale for RTI, 75% thought it unachievable," said HMRC's summary of responses to its consultation on RTI's feasibility.
Most concern from the 169 respondents had come from software developers. HMRC said it would pilot the programme between April 2012 and 2013 using a limited set of the final system's features. It aimed to hook 25% of all UK employers into RTI before its launch in April 2013 to "support the introduction of Universal Credit".
The MPA review said "detailed work" had begun on a contingency for RTI in case it was delayed. It would commandeer the HMRC's self-reporting system for the self-employed.