From BBC News, 7 November 2013.
David Cameron has backed Iain Duncan Smith’s handling of universal credit after a report by MPs claimed the welfare shake-up had gone badly wrong.
The public accounts committee said much of the £425m spent so far may have to be written-off due to poor management.
Mr Duncan Smith denies claims he tried to “lean on” members of the committee to place the blame on his top official.
Downing Street said the work and pensions secretary was “doing exactly the right thing” with the new scheme.
In a damning report, the Commons Public Accounts Committee said management supervision of universal credit had been “alarmingly weak”.
The committee said the project – to merge six separate means-tested working age benefits into a single payment – had been beset by a string of problems and still faced considerable challenges if it was to achieve its long-term objectives.
‘Pointing the finger’
initial estimates suggest at least £140m, spent on IT systems which cannot be used, will have to be written off but the full losses could be much higher, and may take up much of the £425m spent on the project to April 2013, the report says.
Labour sources on the committee have told BBC News there was a “concerted” effort by Conservative members to shift the blame from Mr Duncan Smith on to his permanent secretary Robert Devereux.
One source said there had been a number of extra meetings and discussions over amendments “pointing the finger” at Mr Devereux but the committee eventually rejected the criticisms of the official in the final text of the report.
These claims were categorically denied by Mr Duncan Smith’s spokeswoman, who said:
“Iain has not asked for anyone to be named in the report. He has publicly supported the Department for Work and Pensions permanent secretary throughout this whole process.”
The committee’s Labour chairman Margaret Hodge said she had not been approached by Mr Duncan Smith, but sidestepped questions about whether she was aware of pressure being put on Conservative colleagues.
Conservative MP Steve Barclay, a member of the committee, said he could “absolutely rebuff” the suggestion that Mr Duncan Smith had tried to influence the committee, which is meant to be non-partisan and impartial.
David Cameron’s official spokesman was asked several times to confirm that the prime minister was “confident” that universal credit would be delivered on time and on budget, but did not do so.
Instead, he told reporters:
“The department is working to the 2017 timetable. That is the timetable that the department continues to work to. That is the target the department is shooting for and we are going to continue to work towards it in the way we are.”
The spokesman was asked whether it would be proper for a secretary of state to approach members of a select committee ahead of the publication of a report in the way alleged of Mr Duncan Smith.
He replied: “There are procedures that are in place for the relationship between departments and select committees and that is something the Department for Work and Pensions have been very clear about.”
Asked if the prime minister was “completely happy” with Mr Duncan Smith’s handling of the implementation of universal credit, Mr Cameron’s spokesman said:
“He thinks that the secretary of state and the department are doing exactly the right thing in rolling this out in a progressive way and in a way that allows us to learn lessons as we go.
“That is what is being done and he very much supports that.”
Cabinet Office minister Francis Maude, who has oversight of Universal Credit as part of his civil service reform role, said it was a “very hard-hitting” and “useful” report which highlighted wider problems in Whitehall:
“We are not that good at financial control… but also project management has been deficient for a long time.”
Labour’s shadow leader of the Commons, Angela Eagle, demanded an urgent statement from Mr Duncan Smith on the allegations that he tried to “lean on” members of the committee.
Ms Eagle described the PAC report as “devastating” and told the Commons:
“It seems that the blame game for this costly fiasco has already started.
“This morning we learn of a wholly improper attempt to lean on members of an independent select committee of this House by Mr Duncan Smith and his parliamentary team to try to put the blame on the permanent secretary.”
‘Ad hoc reviews’
Commons Leader Andrew Lansley said he had spoken to Mr Duncan Smith and saw no need for him to come to the Commons to explain himself.
In its report, the select committee said control over suppliers in the Universal Credit had largely been absent, with multi-million pound orders sometimes being signed off by secretarial staff.
From the outset of the project in 2011, it said, senior civil servants had “failed to grasp the enormity” of the task they had been set by ministers, did not monitor progress adequately and had not intervened when issues arose.
A lack of day-to-day control meant that top officials only became aware of difficulties through “ad hoc reviews” and as problems mounted, those in charge of the scheme had become “isolated and defensive”.
Committee chairman Margaret Hodge said:
“The failure to develop a comprehensive plan has led to extensive delay and the waste of a yet to be determined amount of public money.
“Pressure to deliver a programme of this magnitude within such an ambitious timescale created a fortress culture where only good news was reported and problems were denied.”
Howard Shiplee, who took over the running of the project in May, has admitted mistakes were made but said real progress was now happening and much of the existing IT systems could be used.
Responding to the committee’s report, the Department for Work and Pensions said universal credit was a “vital” reform which would ultimately bring £38bn in benefits to society by helping people into work and reducing fraud.
“This report doesn’t take into account our new leadership team, or our progress on delivery,” it said. “We have already taken comprehensive action including strengthening governance, supplier management and financial controls.”
It said it did not accept “the write-off figure quoted by the committee” and expected it to be substantially less.
From October 2013 to April 2014 about half a million new claimants were due to receive universal credit instead of jobseeker’s allowance, employment support allowance, income support, housing benefit, working tax credit and child tax credit.
At the same time, another half a million existing claimants and their families were due to be transferred to the new credit when their family circumstances changed significantly – for instance if they got a job or had another child.
From April 2014 a further 3.5 million claimants and their families were due to move to universal credit.
And from the end of 2015 to the end of 2017 a further three million people are due to be moved over, focusing on housing benefit claimants