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The Department for Work and Pensions (DWP) has finally published a summary of the full business case for its flagship benefits reform programme, Universal Credit (UC).
The summary of the business case is now available in the public domain, and claimed that that UC remains “deliverable, affordable and provides value for money, with a net present value (NVP) of £34bn” over 10 years, compared with the £2bn cost of the programme.
It added that when the programme is in a “steady state”, it will generate £8bn a year in “economic value”.
Ahead of the full business case receiving approval, the DWP’s “strategic outline business case” was approved by the Treasury in September 2014. However, it relied heavily on a high uptake of the online system, assuming a take-up of 68% of claims online when reaching a steady state.
The full business case summary does not say whether that figure is still the goal, but it is based on digital being the primary channel through which claimants apply for benefits.
“More efficient digital systems/automated processes – Universal Credit Full Service will automate a large proportion of our back-end processes, driving business efficiencies and a higher-quality service,” the business case said.
Of the £2bn spent on UC, £575m accounts for the IT costs, classed as “the technology cost of developing the Universal Credit Live Service, the Full Service and the security solution”, it said. However, a huge chunk of IT costs were written off during the programme’s 2014 reset, and are not included in this £2bn figure.
Other costs include £157m for the development and decommissioning of HM Revenue and Customs tax credit systems, £185m for universal support and pilots and trials to “test elements” of the service, and £87m for operational support costs associated with implementation and delivery.
Read more about Universal Credit
- The DWP’s flagship welfare reform was meant to change the lives of benefits claimants through one simple IT system, but was beset by IT problems, low staff morale and delays. How did it go so wrong?
- Government plans to plough on with Universal Credit despite calls to pause the project as people struggle to make claims successfully.
- Government project management experts warned as long ago as 2015 that a problem with GDS’s Verify online identity system could undermine the Universal Credit business plan.
When the programme was first launched in 2010, the aim was for DWP to begin taking claims using UC from October 2013, but in September 2012, the programme began to show cracks in its foundations.
Documents – not released until 2016 as part of a longstanding freedom of information (FoI) battle – show that DWP officials knew of problems with the programme in 2012, while senior figures continued to state publicly that the project was on time and on budget.
By the end of 2012, the government had spent £638m on the IT for Universal Credit, with £441m going on design and development.
In December 2013, the secretary of state for work and pensions, Ian Duncan Smith, admitted that UC would miss what had then become its 2017 roll-out deadline.
The programme was reset, and the government decided to adopt a twin-track approach, with a portion of the already-created IT system to be used alongside the future digital service to support the nationwide roll-out of a fully digital UC system.
The UC digital service is currently being rolled out to job centres across the country, and DWP aims to complete the programme by 2023.
It intends to use the government’s flagship identity platform Gov.uk Verify, but Computer Weekly revealed in January 2018 that only 35% of UC users could set up a Verify account online, 30% were unable to, and the remaining 35% could use Verify but did not do so.
Despite the challenges, DWP remains optimistic that UC will have a positive economic impact on both government and citizens. In the summary’s foreword, UC director general Neil Couling said: “This business case clearly demonstrates that Universal Credit provides value for money and huge benefits for claimants, the broader population and the economy as a whole.
“Some of the most compelling aspects of Universal Credit are also highlighted here: the £2bn total cost of investment against a social return to the economy of £34bn over 10 years; and an increase of people in employment of 200,000.”