Amid all the political fallout and the carnage within the Conservative Party since the shock resignation of work and pensions secretary Iain Duncan Smith last week, many observers have started asking questions about the future of Universal Credit – the controversial welfare reform scheme created and championed by Duncan Smith.
Having followed the scheme’s stuttering progress for the last five years, I suspect that anyone wondering (or hoping) if Universal Credit was in some way a contributory factor in IDS’s departure will be disappointed.
But it does seem likely that without him at the helm, there may be a change in attitude, and perhaps even some much-needed openness and greater scrutiny of the programme.
Think about it this way – now that he is out of the Cabinet, Duncan Smith is free to talk about Universal Credit without the restrictions of being a minister. And given his developing feud with George Osborne, and rumours that the chancellor has never been as wedded to the scheme as IDS, you can be sure that Duncan Smith will shout from the backbenches if he sees any decisions that will tarnish the reform that he has always wanted to be his great political legacy.
Let’s look at the context for Universal Credit as IDS steps away from it.
£15.8bn lifetime costs
When the programme is fully rolled out – or perhaps that should be “if” – it will have cost you and I as taxpayers £15.8bn. That’s the most recent published estimated for the lifetime cost of the controversial welfare reform programme.
The main reason that astonishing figure has not received greater scrutiny is the consistent line from the Department for Work and Pensions (DWP), and in particular from Duncan Smith, that the economic benefits to the UK will amount to £7bn per year.
Of course, the champion of the scheme is now gone. And given the changes affecting Universal Credit from successive budgets and welfare cuts, you have to wonder how realistic that benefits figure is too. Duncan Smith had always justified the cost on the basis that the UK economy would benefit from getting people back into work sooner and so making a productive contribution to GDP and paying more taxes.
But George Osborne’s planned austerity cuts to Universal Credit benefits – effectively a replacement for the widely criticised tax credits cuts from which the chancellor made a dramatic U-turn last year – must surely raise questions over the rationale behind the business case. That’s a business case that is not due to be finally signed off until September 2017.
What’s happening with the roll-out?
As of 11 February – the latest date for which figures have been published – 203,392 benefit claimants were on Universal Credit, most of whom are single people who don’t own a home, making them the simplest type of claimant to process.
The original plan was for four million claimants on Universal Credit by April 2014.
The DWP trumpets the roll out of Universal Credit to all Jobcentres nationwide, a process underway now. But the IT system they are rolling out will mostly be thrown away before the scheme is fully implemented – currently targeted to be March 2021 – to be replaced by the “full service” or digital version of the scheme.
The digital version has so far only been tested in three or four limited areas in London, and is due to begin a national roll-out in May 2016, starting with just five job centres a month. No figures have yet been published about the number of claimants being processed by the digital system.
We know that £130m of IT work will have been thrown away by the time the digital version is fully rolled out – and it’s highly likely this figure will prove to be a lot higher.
According to the Public Accounts Committee (PAC), there are still no published milestones for the further roll out of the digital version: “The lack of specific and timely plans for digital service roll-out – and only being able to say that roll-out will happen ‘soon’ – not only affects local authorities, it also creates uncertainty for claimants and those whom they turn to for advice,” said the committee in February this year.
PAC chair Meg Hillier, MP, added: “The lack of transparency surrounding a programme with such wide-reaching implications for so many people is completely unacceptable.”
At some point, the millions of people claiming existing benefits will have to be transferred to Universal Credit – an enormous physical, logistical and technical task to undertake. Estimates from 2013 suggested that more than 200,000 benefit claimants need to be transferred on to the new IT system every month in the year leading up to its full launch. That scale of migration is unprecedented in UK government history, and must surely present a huge risk to subsequent timescales.
The Office for Budgetary Responsibility has previously said that every further delay wipes out great chunks of the expected economic payback.
Throughout all the public scrutiny of Universal Credit from multiple PAC hearings and National Audit Office reports, Iain Duncan Smith has consistently insisted that the programme is on track and under budget – even if those milestones have been something of a moving target.
So given the new reality of an IDS-less DWP, and the risks that still exist for further controversy and embarrassment to the government, there must be people within DWP now willing to think the previously unthinkable and question whether the current plans are sustainable.
From the IT side, there seems to be a quiet confidence that the latest technology is finally going in the right direction. While DWP still resists releasing any detailed information about the digital tests, there are few whispers to suggest problems with the system – unlike the situation when the original IT was going down the drain when everyone was trying to cover their backs.
But even with the current confidence in the digital system, it has yet to be tested at any sort of scale.
A delicious irony?
DWP has for the last four years been fighting against a freedom of information request to publish three critical planning documents from th e early stages of Universal Credit, back in 2012. At that time, Duncan Smith was very publicly insisting all was well – as he has continued to do even when it was shown that all was not well.
The question for him and DWP is whether those key documents will show that even as IDS was telling a positive story to Parliament, he and his senior officials knew that was not the case.
Such a revelation might even have been enough to force a ministerial resignation, had the minister not gone already.
But now, Duncan Smith no longer has to defend the current government plans for the scheme, and can instead point fingers elsewhere if he believes that others – notably in the Treasury – have effectively scuppered the ambitions he once laid out for Universal Credit.
He can present himself as the man who hit the brakes when officials were failing with the early IT, and who put the plans back on track with the infamous “reset” of the programme in 2013. He can point to Treasury meddling and cuts ever since that have thrown the future of his great reform into doubt.
Wouldn’t it be a delicious irony if the man whose obfuscation and lack of transparency for five years of Universal Credit might now prove to be the catalyst for its secrets being revealed?