I make no apologies for returning to the on going disaster that is Universal Credits.
I have covered this ongoing public policy catastrophe previously:
Universal Credits continues to blight the lives of millions of people. Most of the criticism of UC stems from 3 problems:
- George Osborne used the introduction of UC to push through some cuts to benefits, and freezes to others. These have cut the incomes of the poorest in society by £1000s
- the system has an inbuilt delay, which causes claimants to wait for weeks before they get paid, running up debts they can’t pay back
- The system makes too many mistakes, depriving vulnerable people of the income they need to live on. In particular the “digital by default” interface penalise vulnerable people who aren’t digital natives.
Stories like this, have become both deeply upsetting and far too common:
Most of the stories about UC focus on the human hardship, which is understandable, but if I am honest no politician actually sets out to hurt or harm people. They set off with good intentions, overestimate their own competence, appoint bad advisors, and make decisions because they sound good in newspaper interviews without thinking through the consequences. Both of the main parties suffer from these problems at the moment.
The hardship caused by UC are the consequences of bad policy, and terrible implementation, not simple evil. It is notable that it is a policy so horrific that I feel the need to explain that it isn’t deliberately evil.
A couple of weeks back Labour finally pledged to get rid of UC, although there is no real clarity on what they would replace it with, and whether it is just a re-brand they are planning:
Frankly the Labour Party are years off the pace on this. Hopeless.
The Major Projects Authority reported serious problems with UC to the Public Accounts Committee as far back as February 2013, as a result of which the project was “reset”; a Ministerial Oversight Group appointed to check up on it; and the value of the work done to date was written off. The NAO published an equally damning report in September 2013, 6 years before the Labour Party decided it would scrap it.
DWP had to defer publishing it’s 2013 annual accounts because it couldn’t agree how much of the costs to date of UC should be written off as worthless. In the end the NAO agreed that £40m of spend was totally wasted, and another £90m was of very limited value. I was interviewed for the NAO investigation, and my view was that the write off should have been much higher. At that point the project had burned through £0.3bn with nothing to show for it.
Amayas Morse, Her Majesty’s Comptroller and Auditor General, noted in the 2013 and 2014 DWP accounts that the Department had serious weaknesses in managing the UC programme, and couldn’t account for all of the spend.
Let’s pause in the sad story to reflect on what an amazing job title that is; Her Majesty’s Comptroller and Auditor General. The Witchfinder General of bad financial management.
Despite all of this UC has gone ahead with an existential problem at the heart of it: CHOC
Change of Circumstances processsing (CHOC) is a basic administrative process common to lots of financial transactions public sector and private. You have apply for a benefit, take out insurance, pay tax, for example. An assessment is made of your eligibility or liability. Then your circumstances change, and you need to have that change impacted on your original assessment. This is CHOC
Organisations, public and private, hate CHOC. HMRC only allow you to amend your tax code once a year in retrospect. Insurance companies charge you for any changes to your policy. The more CHOC the higher the costs of administration and the higher the error rate. Everyone tries to minimise CHOC. It was CHOC that crashed the CSA in the late 90s, costing £30m+ pa in outsourcing costs to manually manage cases that their IT system couldn’t handle.
Universal Credits is based on the idea of infinite, real time, CHOC. A continual adjustment of eligibility, taking place seamlessly, to manage benefits as claimants work more or less hours a week. Removing the benefits trap and encouraging people to work more hours.
The essential problem is that no-one knows how to make this work. IT solutions are too complex, human administration too expensive. The whole programme should have been stopped 6 years ago, and only allowed to proceed once a solution had been found. Instead the programme has rolled on with an existential problem at the heart of it. Instead some claims are still be managed manually, because the IT can’t deal with them – just like the CSA.
What’s worse is that small business like mine are dragged into Real Time Initiative (RTI) feeding data into a beast that has no idea what to do with it.
With so many changes being impacted in real time it is almost impossible to track fraud. Like all automated systems it is just too easy to commit lots and lots of small frauds continually without being caught. Like Richard Pryor in Brewster’s Millions.
The latest doomed attempt to resolve this problem is an “intelligent automation garage”, a special team within DWP who are developing “welfare robots” which combine deep learning and intelligent automation for use in the welfare system.mmmThis replaces the work of DWP staffing in checking claims with automated algorithims.
I should probably declare an interest – the chap in charge of this is an old colleague of mine, and the robot unit is based at Benton Park View in Newcastle. I was RO for at least one of the blocks there when I was a Civil Servant.
This is an utterly terrible idea, that will make a nightmarishly awful system worse. It also makes a mockery of the claims that austerity will end, when the suffering of UC claimants will get worse
I normally like to offer up a solution at the end of these blogs, suggesting how I would tackle the same issue.
I am afraid that most of my recommendations are negative this week:
- scrap Universal Credits
- hold a public inquiry to identify how this mess has been allowed to go on for so long
- scrap 90% of the benefits sanctions regimes, retaining only the minimum essential for the system to function
- scrap Job Centre Plus. Use the savings to create an enhanced Government Counter Fraud and Revenue Protections service based within HMRC tackling tax dodging and benefit fraud. Outsource the remaining job search functions to private sector recruitment agencies. Use the rest of the money to establish a compensation fund for the victims of UC and their families.
A number of Government Departments snuck out announcements while everyone was watching Boris lose another vote in the House.
Among them was the announcement the the Government has scrapped plans to block access to on line porn. This was required as part of the Digital Economy Act 2017. Just like UC the Government passed an Act of Parliament, and committed public expenditure, to a project that required a complex technical solution without identifying first what that solution was.
It was a policy so stupid that we would have been better off asking the Mothers Union to go round the country cross out the rude words in Dictionaries to stop children giggling at them.
In the next few weeks Parliament will be asked to sign off a plan for Northern Irish customs arrangements. This requires a complex technical solution, including investment in technology, without a clear picture of what that solution is, or how long it will take to implement.
The chances of success are no better than UC or the porn filter.