The Universal Credit disaster was not a simple IT screw-up

The whole thing emerges with very little credit.

Today's NAO report into Universal Credit reveals an overambitious timetable, a lack of a detailed blueprint, inadequate supplier management, and confusion over what constitutes an agile approach.

The title for today's hard-hitting National Audit Office (NAO) report into Universal Credit is "early progress". "Progress" might be stretching things a bit far. After months of the Department for Work & Pensions (DWP) insisting that Universal Credit was still on track, the NAO report confirms that there really is no smoke without fire. The reports that were emerging about the state of the Universal Credit project really were true. And it really was that bad.

But unlike most "IT disaster" reports where vendors are routinely blamed for their failures, this report paints a different picture: one of weak programme management, over-optimistic timescales and a lack of openness about progress, not to mention some Whitehall friction between DWP and the Cabinet Office.

According to the NAO, DWP's programme for the national rollout of Universal Credit from October 2013, was "ambitious" given that the detailed policy would not be approved by Parliament until 2012. In fact, if it adopted its traditional "waterfall" approach to programme management - where systems are developed after policy is set - then rollout would be expected in 2015. But with October 2013 set in stone, that timetable itself created pressure on DWP to act quickly and meant that progress had to be managed tightly.

But instead of adopting its traditional waterfall approach, DWP chose to go with an "agile" plan, using the iterative and collaborative method of project management which has become popular and indeed has been recommended by the Cabinet Office for the development of public sector IT systems. But surely you wouldn't adopt such an approach for the first time on a critical project with an ambitious timescale? DWP did.

What was worse, in the NAO's view, throughout its development of Universal Credit, DWP has lacked a detailed view of how Universal Credit is meant to work. The NAO suggests that the department was warned repeatedly about its lack of a detailed "blueprint", "architecture" , or "target operating model" for Universal Credit and although throughout 2011 and the first half of 2012 it made some progress, the concerns were not addressed as expected.

By mid-2012, that meant that DWP could not agree what security would be needed to protect claimant transactions and was unclear about how Universal Credit would integrate with other programmes. That culminated in the Cabinet Office rejecting the department's proposed IT hardware and networks.

It is easy to imagine from that development how the Universal Credit team acquired what the NAO describes as a "fortress" mentality within the programme, and a "good news" reporting culture that limited open discussion of risks and stifled challenge because DWP had ring-fenced the Universal Credit team and allowed it to work with a large degree of independence.

As well as a lack of transparency and challenge, the Universal Credit team also had inadequate financial control over supplier spending - there was limited understanding of how spending related to progress and insufficient review of contract performance - and ineffective departmental oversight, which meant that DWP has never been able to measure its progress effectively against what it is trying to achieve. That has led to continual problems with governance, changed governance structures and during the "resetting" of Universal Credit in early 2013, the complete suspension of the programme board.

What all this means for the Universal Credit programme, the NAO says, is that DWP will have to scale back its original delivery ambition and reassess what it must do to roll out Universal Credit to claimants. That means revising the programme's timing and scope, particularly around online transactions and automation. That in turn means that Universal Credit will be more expensive and complex to administer than originally intended, while delays to rollout are likely to reduce the expected benefits of reform.

Although according to the project's leader Howard Shiplee, the Universal Credit team will be working together with the Government Digital Service to "take the best of the existing system and make improvements", the NAO suggests that DWP does not yet know to what extent its new IT systems will support national rollout. £34m worth of new IT assets - amounting to 17 per cent - have already been written off, and current pathfinder systems have limited function and do not allow claimants to change details of their circumstances online as originally intended.

The good news is that the problems of Universal Credit are belatedly beginning to come to light, which means they can start to be solved, even if that means the project's scope and timetable have to be changed, to project managers' and politicians' embarrassment.

They say the first part of getting help is to admit you have a problem, though I'm still not sure DWP has yet realised the extent of its Universal Credit addiction, and the treatment needed.

Its optimistic statement following the publication of the NAO report says, "We are committed to delivering it [Universal Credit] on time by 2017 and within budget.

"Under this new leadership we are making real progress and we have a plan in place that is achievable and safe. The NAO itself concludes that Universal Credit can go on to achieve considerable benefits for society."

This piece first appeared here

Ian Duncan Smith. Photograph: Getty Images

David Bicknell is the editor of Government Computing: www.governmentcomputing.com

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North Yorkshire has approved the UK’s first fracking tests in five years. What does this mean?

Is fracking the answer to the UK's energy future? Or a serious risk to the environment?

Shale gas operation has been approved in North Yorkshire, the first since a ban introduced after two minor earthquakes in 2011 were shown to be caused by fracking in the area. On Tuesday night, after two days of heated debate, North Yorkshire councillors finally granted an application to frack in the North York Moors National Park.

The vote by the Tory-dominated council was passed by seven votes to four, and sets an important precedent for the scores of other applications still awaiting decision across the country. It also gives a much-needed boost to David Cameron’s 2014 promise to “go all out for shale”. But with regional authorities pitted against local communities, and national government in dispute with global NGOs, what is the wider verdict on the industry?

What is fracking?

Fracking, or “hydraulic fracturing”, is the extraction of shale gas from deep underground. A mixture of water, sand and chemicals is pumped into the earth at such high pressure that it literally fractures the rocks and releases the gas trapped inside.

Opponents claim that the side effects include earthquakes, polluted ground water, and noise and traffic pollution. The image the industry would least like you to associate with the process is this clip of a man setting fire to a running tap, from the 2010 US documentary Gasland

Advocates dispute the above criticisms, and instead argue that shale gas extraction will create jobs, help the UK transition to a carbon-neutral world, reduce reliance on imports and boost tax revenues.

So do these claims stands up? Let’s take each in turn...

Will it create jobs? Yes, but mostly in the short-term.

Industry insiders imply that job creation in the UK could reflect that seen in the US, while the medium-sized production company Cuadrilla claims that shale gas production would create 1,700 jobs in Lancashire alone.

But claims about employment may be exaggerated. A US study overseen by Penn State University showed that only one in seven of the jobs in an industry forecast actually materialised. In the UK, a Friends of the Earth report contends that the majority of jobs to be created by fracking in Lancashire would only be short-term – with under 200 surviving the initial construction burst.

Environmentalists, in contrast, point to evidence that green energy creates more jobs than similar-sized fossil fuel investments.  And it’s not just climate campaigners who don’t buy the employment promise. Trade union members also have their doubts. Ian Gallagher, Secretary of Blackburn and District Trade Unions Council, told Friends of the Earth that: “Investment in the areas identified by the Million Climate Jobs Campaign [...] is a far more certain way of addressing both climate change and economic growth than drilling for shale gas.”

Will it deliver cleaner energy? Not as completely as renewables would.

America’s “shale revolution” has been credited with reversing the country’s reliance on dirty coal and helping them lead the world in carbon-emissions reduction. Thanks to the relatively low carbon dioxide content of natural gas (emitting half the amount of coal to generate the same amount of electricity), fracking helped the US reduce its annual emissions of carbon dioxide by 556 million metric tons between 2007 and 2014. Banning it, advocates argue, would “immediately increase the use of coal”.

Yet a new report from the Royal Society for the Protection of Birds (previously known for its opposition to wind farm applications), has laid out a number of ways that the UK government can meet its target of 80 per cent emissions reduction by 2050 without necessarily introducing fracking and without harming the natural world. Renewable, home-produced, energy, they argue, could in theory cover the UK’s energy needs three times over. They’ve even included some handy maps:


Map of UK land available for renewable technologies. Source: RSPB’s 2050 Energy Vision.

Will it deliver secure energy? Yes, up to a point.

For energy to be “sustainable” it also has to be secure; it has to be available on demand and not threatened by international upheaval. Gas-fired “peaking” plants can be used to even-out input into the electricity grid when the sun doesn’t shine or the wind is not so blowy. The government thus claims that fracking is an essential part of the UK’s future “energy mix”, which, if produced domestically, will also free us from reliance on imports tarnished by volatile Russian politics.

But, time is running out. Recent analysis by Carbon Brief suggests that we only have five years left of current CO2 emission levels before we blow the carbon budget and risk breaching the climate’s crucial 1.5°C tipping point. Whichever energy choices we make now need to starting brining down the carbon over-spend immediately.

Will it help stablise the wider economy? Yes, but not forever.

With so many “Yes, buts...” in the above list, you might wonder why the government is still pressing so hard for fracking’s expansion? Part of the answer may lie in their vested interest in supporting the wider industry.

Tax revenues from UK oil and gas generate a large portion of the government’s income. In 2013-14, the revenue from license fees, petroleum revenue tax, corporation tax and the supplementary charge accounted for nearly £5bn of UK exchequer receipts. The Treasury cannot afford to lose these, as evidenced in the last budget when George Osborne further subsidied North Sea oil operations through increased tax breaks.

The more that the Conservatives support the industry, the more they can tax it. In 2012 DECC said it wanted to “guarantee... every last economic drop of oil and gas is produced for the benefit of the UK”. This sentiment was repeated yesterday by energy minister Andrea Leadsom, when she welcomed the North Yorkshire decision and described fracking as a “fantastic opportunity”.

Dependence on finite domestic fuel reserves, however, is not a long-term economic solution. Not least because they will either run out or force us to exceed international emissions treaties: “Pensions already have enough stranded assets as they are,” says Danielle Pafford from 350.org.

Is it worth it? Most European countries have decided it’s not.

There is currently no commercial shale-gas drilling in Europe. Sustained protests against the industry in Romania, combined with poor exploration results, have already caused energy giant Chevron to pull out of the country. Total has also abandonned explorations in Denmark, Poland is being referred to the European Court of Justice for failing to adequately assess fracking’s impact, and, in Germany, brewers have launched special bottle-caps with the slogan “Nein! Zu Fracking” to warn against the threat to their water supply.

Back in the UK, the government's latest survey of public attitudes to fracking found that 44 per cent neither supported nor opposed the practice, but also that opinion is gradually shifting out of favour. If the government doesn't come up with arguments that hold water soon, it seems likely that the UK's fracking future could still be blasted apart.

India Bourke is the New Statesman's editorial assistant.