DWP still has lessons to learn to make Universal Credit IT a success

“Unacceptably poor management” and “wasted time and taxpayer’s money” – that’s how Margaret Hodge, MP, the chair of the Public Accounts Committee described Universal Credit this week.

The latest National Audit Office (NAO) report into the troubled welfare reform programme simply added to the catalogue of concerns. It is easy for secretary of state Iain Duncan Smith to continuously say that the project is on time, when the timescales are put back every six months. At any point in time, delivery is on target – until it’s delayed and is back on target again.

The headline findings from the report have been widely covered – still unable to determine value for money; no contingency plan should the new digital service fail to work; lack of an overall blueprint for delivery of the policy.

But reading through the 60-page NAO report also reveals some startling nuggets of information that the Department for Work and Pensions (DWP) would no doubt prefer to have kept under wraps.

For example, in April 2014, a software update caused an increase in incorrect payments to benefit claimants, which meant that every payment had to be manually checked for three months. The cause of the problem was an un-named supplier that released an update containing “significant changes” that the DWP had not been told about, and were therefore not properly tested.

The supplier is likely to be one of IBM, Accenture, HP or BT, the four key vendors supporting the flaky system that will be mostly replaced by the future digital service. Those suppliers have received far too little criticism or scrutiny of their role – even being allowed to audit their own work, what one MP called “marking their own homework”.

Only 17% of the work that these suppliers have done will be used once Universal Credit is fully live, according to the NAO.

In January this year, Computer Weekly revealed that DWP was already struggling to recruit the skills it needs to develop the digital service – a fact the DWP denied at the time. The NAO revealed that this has been the key reason for delays in the progress of the digital system, and that recruitment is still required to reach the necessary capacity. The report said that DWP was offering maximum salaries between 8% and 22% lower than the market average.

The DWP Digital Academy programme launched by the department’s digital transformation chief, Kevin Cunnington, is proving to be successful in training internal staff – but it’s a longer-term solution.

The real problem is that DWP chose to ignore the warnings and recommendations of the Government Digital Service for too long – blundering along with poor project management and misfiring suppliers. Now that digital has been placed at the centre of the programme, it’s been a case of catch-up in a recruitment market where digital experts are in short supply and high demand.

The risks around Universal Credit remain, and if future progress follows past history, the cost to the taxpayer of those risks being realised will be significant. There are chinks of light emerging and insiders say they have been impressed by Cunnington’s approach. With full roll-out of the new benefits now put back until 2019, there is time to get things right, but only if the DWP has finally learned its lessons over implementing modern, digital government IT.