Government must push ahead with Universal Credit and civil service reform

Iain Duncan Smith should not abandon the Universal Credit simply due to a negative NAO report, but the government as a whole should take a serious look at why there were failures in the first place.

If history is fair to Iain Duncan Smith, then he will not be remembered as the most unpopular leader in the Conservative Party’s history but as the most radical welfare reformer since William Beveridge. We’ve heard the same soundbites for decades. ‘Hand-up, not hand-outs’, ‘Turning the welfare state into a trampoline, not a net’, etc. All very pretty analogies, though never producing any concrete results. Blair appointed Frank Field to ‘think the unthinkable’, and then, when he did think the unthinkable, he was sent back to the backbenches. IDS has been the first politician in generations to attempt a complete welfare revolution and his most totemic policy, the universal credit, shall remain in place decades from now, even when debates over badger culls and intervention in Syria have been forgotten. Unfortunately, radical reform without a compliant and competent civil service is like accelerating with the handbrake on. This week has proven this more than ever.

The Universal Credit seems a simple idea from the perspective of a claimant. A range of income-based tax benefits are combined into a single, universal benefit. When the claimant starts work and begins earning income, the credit is steadily withdrawn at a rate that ensures that they are always better off working more hours. It replaces an eclectic and chaotic system in which dozens of benefits tapered off at different rates. This existing system obscures whether an individual was better off working longer hours and often resulted in a marginal income tax rate of over 100%! From the perspective of the DWP however, it is immensely complex as it necessitates building the most demanding IT system in the history of the public sector.

This week the National Audit Office (NAO) criticised the Universal Credit project as being poorly managed and “not value for money”. Their criticisms were numerous. Most damaging were the criticisms of the creation of the IT system, which was criticised for:

  • Weak programme management;
  • £34 million investment in IT systems was written off;
  • IT systems suffering from “limited functionality”;
  • Delays to the national rollout, and;
  • A “fortress” mentality among staff and a tendency to only report “good news”.

Liam Byrne, Labour Shadow Secretary of State for Welfare and Pensions, latched on to the report’s conclusions, claiming that the project was “out of control”. There is no area of public policy where it is more accurate to say that Labour criticise the government whilst offering no alternative. Byrne has long since abandoned attempting to debate the government on the principles of welfare reform and has attempted to forget his party’s own record of complacency over welfare reform. Now Byrne, seeks to out-do the government on fiscal discipline by attacking their record on the implementation of reform. A report criticising the government for maladministration would seem like an open goal for Labour, though Labour’s own record on IT systems is blighted by the New Labour years, most notably the inconspicuous hulk of NHS Connect, a £14 billion IT failure. Liam Byrne recently offered an olive branch over the Universal Credit to the Conservatives, pledging to help “make it work”. It is likely that his offer has less to do with a fervour to fix the system (which his party willingly allowed to rot for more than a decade) and more to do with Labour’s strategic weakness in the polls over welfare.

Why is the public sector unable to get major IT projects right? Richard Littlejohn recalls a litany of public sector IT failures in his column yesterday, ranging from the Home Office to the Crown Prosecution Service to the NHS. In 2010 the government created the Major Projects Authority (MPA) as part of the Efficiency and Reform Group, a group tasked with keeping track of major projects to prevent them from going off track. Peter Hoskin criticised the MPA in a blog for ConservativeHome, claiming that it’s analysis of the progress of the Universal Credit “reads a little bit too trusting” after the problems revealed by the NAO report. It appears that the only common denominator is the civil service.

IDS struck back at the report claiming that he has already solved the issues highlighted by the NAO report and brought in “outside people” to replace the civil service on this project after he lost faith in the ability of the civil service to deliver the project on time and on budget. He criticised the civil service for not getting a grip of the project and for not reporting glitches and problems with the IT systems that they were encountering, the so-called “fortress mentality”. He has claimed that the civil service were not “focusing” properly on delivering the changes. Back in April, Paul Goodman claimed that the civil service, had obstructed much of IDS’ welfare reform, though it was hard to “how much…[is] recalcitrance rather than incompetence, but horror stories are legion”. Similarly, back in 2011, Norman Tebbit criticised the civil service for putting “social engineering” before competence. It seems that the real story behind this is a continuing one of conflict between the civil service and the government.

Should IDS’ solution of bringing in the private sector be used as a model in future projects? Proposing the effective privatisation of the civil service would be, as Sir Humphrey would say, a tremendously brave decision. The history of PFI is also a discouraging model for civil service reform. It would be far better to attempt to restore the civil service’s reputation for competence through internal reform with a focus on making civil servants visible and accountable. Reforms are needed to end automatic job security and opaqueness within the civil service.

In the USA the entire civil service is replaced when a new President is elected. It is not independent, but it is accountable. If the civil service continues to impede government projects through obstruction or incompetence, then support may increasingly grow for a similar system in the UK, bringing to an end hundreds of years of tradition. The tradition of an independent civil service is something worth keeping, though it may require reform and further enhanced skills to preserve this asset.

Will Archdeacon


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