Other people's business

RSS

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

The whole thing emerges with very little credit.

Ian Duncan Smith. Photograph: Getty Images

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