Patryk Kosmider -

DWP finally publishes Universal Credit business case

Published eight years after the programme began, the business case states that Universal Credit will generate £8bn a year in “economic value” once it is in a “steady state”

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 UC programme first began in 2010 before a restart in 2014, but the full business case was only submitted for Treasury approval earlier this year.  

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

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 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.”

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You may recall it was discovered in December 2017 that people Universal Credits lost all their UC entitlement, due to the ‘quirk’ that as there were 5 Fridays in the calendar month, they were presumed to have earned 25% more in that month as a whole, and so could find themselves over the UC threshold. Unless this anomaly was addressed, this would be repeated in 2018 in March, June, August, September & December.
A new ‘twist’ is that when my usual calendar payday falls on a Sunday, rather push the payment back to Monday, I bring it forward by 2 days to the Friday. I recently did this, and as a result, one of my employees has had their UniversalCredit stopped, as they have received 2 months pay only 29 days apart. Nothing to do with the fact that they relate to 2 separate months, were paid in 2 different calendar months, and in the updates to HMRC were ‘booked’ as 2 separate Tax Periods.
As this employee is disabled, he is in receipt of a Personal Independence Payment (replaced the Disability Living Allowance) as well as Housing Credit. I don’t know how much he usually receives in benefits, but he earns £500 a month with me, so presumably he’s lost half of his income.
The powers that be seem to be oblivious to the needs of the poorer members of society.