DWP "seriously considered" suing IT suppliers over Universal Credit failure

Institute for Government report reveals that during the 2013 “reset” of Universal Credit, the Department for Work and Pensions pointed fingers at suppliers

The Department for Work and Pensions (DWP) gave “serious consideration” to suing Accenture, HP and IBM over their involvement in the early troubled days of the Universal Credit programme, according to a new report. 

The controversial welfare reform initiative suffered huge IT problems before the project was “reset” in 2013. A report at the time from the National Audit Office revealed that as much as £130m of IT work would be scrapped by the time the system was due to go live. 

The key IT suppliers involved were Accenture, HP and IBM. According to a new report by the Institute for Government (IfG), David Pitchford, former executive director of the Major Projects Authority (MPA), who was brought in as senior responsible owner for Universal Credit, said that during this period “serious consideration was given to suing the suppliers”. 

However, Accenture, HP and IBM, had previously written formal letters to the department detailing their concerns over the feasibility of the programme, which made such a move impossible.

“Our message was: ‘Look, this isn’t working. We’ll go on taking your money. But it isn’t going to work,” according to one un-named supplier quoted by report author Nicholas Timmins. 

The IfG report concluded that Universal Credit is finally “on the way to recovery” but still faces major challenges.

Tensions running high 

Universal Credit had been beset with IT problems since its inception. In 2011, MPs on the Public Accounts Committee (PAC) told DWP that dependence on tight deadlines, with a go-live set for 2013, was unrealistic. 

The programme was the department’s first major IT project using an agile methodology, relying on a more iterative method, in line with the then Cabinet Office minister Francis Maude’s “digital by default” initiative, led by the Government Digital Service (GDS) to move away from large, outsourced IT programmes. 

The IfG report also sheds further light on the conflict between DWP and GDS at the time of the Universal Credit reset. 

The GDS team were initially ‘very naïve’ about just how complex it was to build Universal Credit
Lord Freud, quoted by Institute for Government

Computer Weekly revealed in December 2013 that GDS had withdrawn from direct involvement in the programme after disagreements over the approach to IT development – GDS wanted to scrap all the existing work and build a new digital system from scratch, but DWP opted for a “twin-track” approach that maintained existing systems while developing the digital version in parallel.  

According to the IfG report, Lord Freud, the then minister for welfare reform, said Cabinet Office minister Francis Maude – in charge of GDS - was “adamant that we should not go with the live system. He wanted to kill it”. 

Freud added: “But we, the DWP, did not believe that the digital system would be ready on anything like the timescales they were talking about then – I think they were talking about the following September at this stage. But I knew that if you killed the live system, you killed Universal Credit. If we did not get something out there working in the real world, with all these enemies circling, it would be labelled a failed project and would be all too easy to stop.” 

Naïve GDS team 

Freud told the report author that “the GDS team were initially ‘very naïve’ about just how complex it was to build Universal Credit”. 

“They were messianic about building the front end, doing it in an agile way, front facing, with their beautiful apps, and they were right about all of that. But they had no grasp of how complicated it was to tie the front end to the legacy back-office, these old and creaky legacy systems we have with which it had to work – the customer information system, the debt management system, the payment system and all the things you need to run 20 million people and their records, and with all that implied,” said Freud. 

The director of Universal Credit at the time, Howard Shiplee, said that a “key issue” was that the new digital team – GDS - “would not even discuss the preceding work done by the DWP and its IT suppliers”. 

But he acknowledged that there were serious problems with the preceding work. “Shiplee, however, asked himself ‘how it could be that a very large group of clever people drawn from the DWP IT department with deep experience of the development and operation of their own massive IT systems and leading industry IT suppliers had combined to get the entire process so very wrong,’” said the report. 

Tight deadlines and few milestones

Over the course of the project - and particularly around the time of the reset as rumours circulated that Universal Credit was in trouble - DWP time and again claimed that the programme was “on track”, and refused to release any further details. However, the department has long been criticised for its lack of transparency.

Earlier this year, independent project manager John Slater won a four-year legal battle to get the department to release documents regarding Universal Credit. DWP had been arguing in court since 2012 that the risk register and issues log should be kept secret.

The documents, released under the Freedom of Information Act, show a snapshot of the programme and its risks in 2012, around a year before it was“reset” in 2013 due to the growing technical problems and delays.

The documents showed that DWP officials knew of problems with the programme in 2012, while senior figures continued to publicly state that the project was on time and on budget, ahead of the reset.

In February this year, the PAC also heavily criticised the department for not sharing milestones and for its “lack of specific and timely plans for digital service roll-out”. 

The programme was initially hailed as one of the flagship programmes for digital by default, with four pathfinders selected to test the system. The pathfinder stage was due to be completed by 1 October 2013. However, the national roll-out of the digital version of Universal Credit did not begin until May 2016, and is now being rolled out to five job centres a month.    

Read more about Universal Credit

Public Accounts Committee report slates lack of transparency around Universal Credit and calls for specific plans for the roll out of the digital service to be made public.

DWP blames policy changes for a further shift in Universal Credit rollout in PAC hearing.

Documents released after a four-year legal battle show that DWP officials knew of problems with Universal Credit in 2012 despite insisting it was on time and budget.


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