06 September 2016

The Institute for Government has published 'Universal Credit – from disaster to recovery?' The report looks at the story and lessons of Universal Credit. Nicholas Timmins summarises the highlights.

Three years ago today the media was full of a report from the National Audit Office on Universal Credit. It was entitled "early progress", but what it chiefly charted was a lack of progress. Universal Credit had hit such trouble that David Pitchford, then head of the Major Projects Authority, recommended that it needed a "radical assault" and that "if progress could not be sorted, then it should be considered to be shut down."

In practice, virtually uniquely for a government project it was "reset" – almost, though not quite, started again. Although ministers were far from entirely transparent about this, a new and hopefully more secure and effective version of Universal Credit was to be built alongside the original and deeply flawed version.

Three years on, it is the new version that is being slowly rolled out to the eight million households who will eventually depend on what has been dubbed "the biggest single reform to in- and out-of-work benefits since Beveridge".

A new report from the Institute for Government judges that Universal Credit is now in recovery. A mere 300,000 or so households are receiving it. Serious challenges remain, not least transferring the huge numbers still on tax credits to the new system and ensuring that the most vulnerable, who include people with disabilities and long-term health problems, are able to cope. But many years later than originally planned, something that is recognisable as Universal Credit now looks likely to make it to the finish line.

The report charts Universal Credit’s troubled history, which includes an utterly unrealistic initial timetable and the fact that the Department for Work and Pensions (DWP) started to build this hugely ambitious benefit reform before it had defined what it would look like and how it would work. There were also clashes between the Cabinet Office and the DWP over how the IT should be built and with the Treasury, which was always sceptical at times downright hostile to the whole idea.

The study also looks at what happened to get Universal Credit to the place it is today – a far better place than in 2013. Key factors include outside intervention, the creation of stable leadership – at one point the programme had five senior responsible owners (programme leads) in little more than three years – and a twin-track approach that allowed lessons from rolling out the original, imperfect, version of Universal Credit to be applied to the new build. In addition, the new version is being built in-house rather than contracted out in its entirety, adopting a ‘test and learn’ approach that has allowed the way Universal Credit functions to be adapted in the light of the experience of both staff and claimants.

The study does not predict that Universal Credit will eventually succeed or achieve everything that those who designed it hoped. There are elements that may well need to change. Its generosity has been repeatedly cut to the point where it offers fewer incentives to enter work than intended, and less support to people once they are in work. Among the big questions that remain are how "in-work conditionality" will operate – a requirement that those already earning something from a low-paid job should earn more.

Universal Credit now has a new champion in Damian Green, the relatively new Secretary of State at DWP. He appears to support the project. But his decisions, as well as those of Iain Duncan Smith whose idea this was, will help define its success or failure.

Whatever happens in future, the lessons of what went wrong with Universal Credit and what then went better should be of interest to everyone concerned with what is known in the jargon as “business change” – big government projects that are not just about construction but which directly affect the lives of hundreds of thousands, or in this case millions, of people.