09 September 2016

This week the Institute for Government published Universal Credit: From disaster to recovery?. Emma Norris looks at how its story can help current and future major projects.

Universal Credit has attracted a lot of controversy over the years, often with good reason. But it is worth restating that the core aim – of simplifying benefits – is worthwhile and has enjoyed cross-party support. The complexity of the benefits system has created real problems for the people using it. At its worst, it took 169 questions just to establish a single parent had a right to access income support. The lack of join-up between different parts of the system meant people who were struggling to get by could suddenly find they owed thousands of pounds in overpaid tax credits.

Nicholas Timmins’ report shows that Universal Credit may still be salvageable. But it should not have been such a difficult journey, with so much wasted time, money and effort.

Universal Credit is not a one-off. The Government has 53 transformation and service delivery projects in its portfolio worth £116bn and 36 ICT projects worth £16bn. All of these – from courts reform to making tax digital – could be delivered better by understanding why a good idea with broad support like Universal Credit experienced the problems it did.

Our lessons include:

  • Never skimp on planning for implementation: Universal Credit was a huge change from the benefits system it sought to replace. But despite the scale of the change, there was underinvestment in policy design and planning. There was a failure to ‘sweat out’ what the end state would look like. And government did not engage with the people using the benefits system – including single parents, people looking for work, people with long-term health conditions – early enough on issues like the moving to monthly payments. The courts system – which currently faces a similar programme of reforms to reduce spending and complexity – needs to heed this lesson.
  • Beware system overload: The Department for Work and Pensions (DWP) had 11 other major projects on its books at the same time as Universal Credit, all of which involved major business change. But cuts at the top level meant senior personnel could not always give Universal Credit the time it needed. Between 2010 and 2013 DWP staff numbers went down by more than 20%. Ensuring sufficient capacity at the top of the organisation and investing in project management capability across government are crucial. HM Revenue & Customs should also watch this: their Making Tax Digital programme, a major reform in the way that businesses interact with government, is being undertaken at the same time as an overhaul of the department’s IT infrastructure and while it is undertaking major structural reform – closing 137 local offices and replacing them with 13 regional centres.
  • Create an open and honest delivery culture: Two different culture clashes got in the way of delivering Universal Credit. First, the people making policy were separated from those designing the software for Universal Credit, or from those working out delivery issues. They were based in different places, with little or no collaboration; all three groups should have worked together from the start.There was also a tendency against reporting bad news. The reasons for this are contested. Iain Duncan Smith (IDS), the former Secretary of State for Work and Pensions, says he wanted to hear about what wasn’t working in Universal Credit, but the culture of the department prevented this. Others say this was such a personal priority for IDS that being honest was very tough. Either way, this highlights the tension between politics and good delivery. A ‘good news’ culture is not unique to Universal Credit – nor is having a timetable driven partly by the political cycle – but projects fare better when people tell the truth about what is and isn’t working.
  • Avoid too much innovation: With stretched timetables and inadequate resourcing, it can be tempting to replace the old ways of doing things with a new technique or technology. But big, high-profile projects are not necessarily the best places for testing new approaches. In Universal Credit, greater attention should have been paid to adopting ‘agile’ and ‘digital by default’. Where new approaches or technologies are used, they need to be tightly controlled and managed. The delivery of Rural Payments – currently in the Major Projects Portfolio – is a case in point. At one point it was introducing seven innovations at once, including digital by default, a new kind of cloud computing and a new kind of contract management.
  • Build resilience into the project: Universal Credit has at various points been described as an ‘unlucky’ project. It was certainly beset by challenges, some of them unpredictable. But successful projects need to be able to survive this. Universal Credit might have been less susceptible to bad luck if it had more resilience built in – including strategies for limiting the turnover of senior staff and creating spaces for external challenge (something that should now be stronger with the creation of the Infrastructure and Projects Authority).

Whether salvageable or not, the lessons of what went wrong with Universal Credit and how it has been able to turn around, should be of interest to everyone concerned with making big projects in government work – whether that is making major changes to the tax system or transforming the way services like criminal justice or education are delivered to citizens.

Further information