Universal Credit business case not approved - obfuscation from the most open government in history

The government has finally been forced to admit that the business case for the troubled Universal Credit programme has still not been signed off – despite repeated assurances that approval was imminent.

The business case is required to confirm the spending needed to see the welfare reform programme through to completion. The Treasury will not sign off the project and release funding until all aspects have been checked and approved by the various Whitehall authorities – not least the Major Projects Authority (MPA) and the Government Digital Service (GDS) whose intervention early last year led to the project being reviewed and eventually “reset” in September 2013.

The admission came in a Public Accounts Committee (PAC) meeting yesterday when, pressed by PAC chair Margaret Hodge, the head of the civil service Sir Bob Kerslake said the business case had yet to be signed off.

Hodge had been pressing Kerslake and his fellow senior civil servants, asking them four times whether the approval had been given, and receiving classic “Sir Humphrey” answers in return, before Kerslake finally bit the bullet and said: “I think we should not beat about the bush. It has not been signed off.”

That statement came after much beating about the bush, for example:

Hodge: “Is it [Universal Credit] on track now?”

Sir Jeremy Heywood: “In its current form, I believe it is.”

Hodge: “What do you mean, ‘In its current form’?”

Heywood: “That is something we look at very carefully.”

Hodge: “I just want to get one answer to the question. Have you signed off the business case?”

Sir Nicolas Macpherson: “On universal credit? I think the Treasury have discussed this quite frequently. I believe that at each key milestone of the reset programme there is a Treasury decision to take.”

Hodge: “Have you signed it off?”

Macpherson: “It is signed up, up to a point; up to the point…Up to the milestones.”

Hodge: “I do want an answer. I want just a yes or no. Has it been signed off or not?”

Heywood: “I cannot speak [for] the Treasury.”

At this point, Kerslake folded and gave the answer Hodge wanted and most people have suspected for some time. He went on to add: “We have had a set of conditional assurances about progress and the Treasury has released money accordingly. That is one of the key controls they have”

So in other words, money to fund Universal Credit is only being released in small chunks for clearly defined sets of work, until the Treasury and its advisers have the confidence that the Department for Work and Pensions (DWP) isn’t going to make the same cock-up it did before. And they don’t yet have that confidence.

The obfuscation around Universal Credit continues to amaze. DWP statements continue to confirm the project is on track – and who knows, it might well be? But nobody fully trusts those statements given the track record the department has on denying problems in the project.

Just last month, the National Audit Office (NAO) warned that it is still not convinced of the DWP’s ability to deliver.

“It is clear that the department still has much to do to address all the concerns raised [about Universal Credit] and to ensure it delivers value for money,” the watchdog said in its latest DWP financial report.

The second-hand whispers coming out of the DWP – and I stress these are from people who tell me they know people, rather than direct inside sources – say that the digital team under Kevin Cunnington are doing a good job in developing the “end-state” digital system that will eventually form the basis of the system that goes live by 2017 to support the full roll-out.

But that digital system has yet to be tested in anger – not until the Autumn is it due to be tried out on 100 real-life claimants.

We know that the NAO is going to review Universal Credit again before next year’s general election, and until then we will no doubt continue on a combination of leaks, speculation, and yet more blind DWP optimism. That NAO review is undoubtedly going to determine what happens to the project after the election.

Labour has already said it will pause the programme if it wins the election. You can be sure the Tories would have a serious rethink too, especially if the NAO finds further problems. And an election victory for David Cameron would also give him a timely excuse to take the much criticised secretary of state, Iain Duncan Smith, away from the project (and the DWP) completely.

In the meantime, we are left picking through the civil-service speak and the obfuscations and the misdirections to find the truth. And let’s remember – this was the flagship reform programme for a government that declared it would be the most open and transparent in history.

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