How much worse will Universal Credit IT problems get?

How much worse might things get with the troubled Universal Credit IT programme?

Last week, we learned through a National Audit Office report that already £34m of IT work has been written off.

This week, we learned from the interim head of the government’s Major Projects Authority that more than £200m of the IT may have to be scrapped – that’s out of a total spend so far of £303m.

Officials from the Department from Work and Pensions (DWP) insist the figure will be nowhere near as high as that, but were forced to admit that they do not yet know how much of the IT developed so far can still be re-used.

The latest revelations came during a heated session of the Public Accounts Committee (PAC), where senior DWP civil servants were scrutinised by MPs and forced to explain how the department’s single biggest project – and the government’s flagship welfare reform programme – had become what the Labour opposition described as “a titanic-sized IT disaster”.

DWP permanent secretary Robert Devereux played the role of a modern day Sir Humphrey, obfuscating at length and avoiding answering direct questions. PAC chair Margaret Hodge, MP was constantly telling Devereux to answer the question that had been asked.

One exchange between the two could have come straight from a Yes, Minister script:

“What was the Pathfinder project meant to do?” asked Hodge.

“To find a path,” replied Devereux.

He was eventually left squirming as MPs on the committee rounded on him for the obvious lack of control over the programme until it became apparent to him in July 2012 there were major problems.

“Suppliers were out of control. Financial controls were not in place,” Norma Wood, interim director general of the Cabinet Office Major Projects Authority (MPA), had earlier told the committee.

The MPs understandably picked up on the revelation from a PricewaterhouseCoopers report that authority to approve purchases from IT suppliers had at one time been delegated to a PA.

The picture that the PAC painted was of a chaotic and dysfunctional project, run by a team with a culture of secrecy and a bunker mentality, with demotivated staff and leaders that did not listen to others and were not in control of their key suppliers or their finances.

Of course, Devereux begged to differ. His version was of a programme where numerous small problems of the sort you would expect on any major programme slowly crept up on him, until he realised he would need to take action. Since doing so, he said, everything is now back under control and back on track.

Of course, the definition of “back on track” is now taken to include the fact that the revised business case for the programme has yet to be signed off by the Treasury, and that a review into the usefulness of the IT work undertaken so far has yet to be completed.

Poor Howard Shiplee, the new director general of Universal Credit – who has only been in the job for 16 weeks and can take none of the blame for what has happened in the past – looked permanently startled.

He has an impressive track record, working on major projects such as the Olympic stadium, but he needs to learn the ways of Westminster quickly. MP Steve Barclay pointed out that Shiplee had told a separate committee of MPs as recently as July that there were no problems with the IT.

Shiplee was confident that his 100-day review of the project will show that a “substantial” amount of the IT work done by IBM, Accenture, HP and BT can still be used.

Nonetheless, the clear implication was that further scrapping of existing IT developments can be expected – the only disagreement was over the scale of the write-offs.

The tone of the questioning from MPs reflected the mood generated by the NAO report – one that asks if the DWP can really be trusted to give honest answers about the Universal Credit project at any time.

The two years of the programme so far, full of DWP evasion and denials in the face of what we now know to have been growing chaos and mismanagement, suggests not.

But one area that can and must come under greater scrutiny is those IT suppliers.

They have escaped direct criticism by the NAO and PAC due to the extraordinarily poor governance of their work by the DWP.

“If we control and manage [the suppliers] properly, they should deliver properly,” said MPA chief Norma Wood.

But questions remain over the suppliers, given the stunning revelation that they were asked to produce a report to assess the value for money of the IT work they themselves had developed.

“Does that not present a conflict of interest?” asked Steve Barclay.

“Yes it does,” said Wood.

“Does that not worry you?” replied Barclay.

“It did,” said Wood.

Of course, we have heard all this before, as the PAC noted. Universal Credit exhibits all the classic characteristics of a government IT cock-up of the kind we have seen all too often before – and more importantly, of the kind that this government has repeatedly told us were in the past.

Only yesterday, former government technology advisor Rohan Silva wrote in The Telegraph that, “The days of wasting billions of pounds on government computing are finally at an end”. Clearly they are not.

And with the NAO also reporting this week that £480bn of public revenue is still dependent on legacy IT systems, Silva’s enthusiasm belies a lack of understanding of the long-term scale of the challenge of moving from that legacy to “digital by default” public services.

The scrutiny of Universal Credit must and will continue, and it seems almost inevitable there will be further problems to come.

But for the umpteenth time, will this finally be the project that proves a turning point in the wasted millions on Whitehall IT? We’ll see.

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