The National Audit Office, widely referred to as the UK Government’s spending watchdog, has published a damning report on the Department for Work & Pensions’ Universal Credits programme. To date, £425 million has been spent on the programme, of which £300 million – or over 70% - has been on the development of IT systems. Many of the problems relate to the programme’s adoption of an agile development approach in order to meet overly ambitious programme timescales – an approach that had not before been used on a programme of the scale and complexity of Universal Credits. NAO highlights that “weak management, ineffective control and poor governance” meant the agile approach was unworkable. It was also difficult to marry the agile approach with existing contract, governance arrangements and assurance structures.
From a programme perspective, the implication is that the national rollout of the programme to claimants has been delayed and the department is being forced to significantly scale back its delivery ambition. It has already written off £34 million of its new IT systems and does not yet know if they will support national rollout. Many of the processes that had been planned for automation are now being handled manually. There are big question marks over how the department will ensure adequate security levels are in place to protect claimant transactions and how the Universal Credits systems will integrate with other programmes.
Four main suppliers have been working on Universal Credit – Accenture on the development of the new online claims system and evidence management systems (paid £125 million to date), IBM on development of the new payment and real time earnings platform (paid £75 million to date), as well as other system interfaces, HP on development the work services platform and providing hardware and server capacity (paid £49 million to date), and BT on telephone services (paid £16 million to date). But there is little criticism of the suppliers in the NAO report. Instead the finger is pointed firmly at the department: at its lack of IT expertise and senior leadership; at frequent changes in senior management; at inadequate financial controls on supplier spending; on a lack of in-house capability for commissioning and managing IT development.
The problems experienced by the Universal Credit Programme set alarm bells ringing for other Government projects and programmes. The Cabinet Office is determined to change the way that Government procures ICT, but the worry is that the changes are happening faster than the departments can get the appropriate skills and capabilities in place to manage the new way of working. Universal Credit is a large scale programme, but other projects and programmes could be even more complicated in terms of supplier management as the Cabinet Office pursues its ambition to see a mixture of internal departmental staff, Government Digital Service, SMEs and larger suppliers working on projects.