Jonathan Portes
I left the Department for Work
and Pensions in 2008. At that time, its stock in Whitehall was high.
Its sheer size meant that it could be slow and sometimes insular. But it “got” delivery in a way others didn’t.
The hard-to-please National Audit Office described its biggest project – the integration of jobcentres and benefit offices into the new Jobcentre Plus network – as a “considerable achievement … delivering over 800 centres to a high-quality standard, under budget”, with savings for taxpayers and a better service for claimants.
Six years on, that reputation is in tatters.
This decade’s flagship programme – the integration of the six major working-age benefits into universal credit – is far behind schedule, with tens of millions of pounds of IT investment already written off and much more to come.
The NAO’s verdict has been damning, describing weak management, ineffective control, and poor governance, with both ministers and civil servants coming in for severe criticism.
External experts – most of whom supported the principles behind universal credit – are unsure of whether the system can ever be made to work, even several years late.
But this is far from the worst of the failures.
The collapse of the department’s contract with Atos to reassess incapacity benefit claimants means perhaps half a million remain in limbo.
The suffering of individual claimants misclassified by Atos and DWP – in some cases left literally starving – has been well-publicised.
Less so has been the cost to taxpayers.
But the Office for Budget Responsibility’s Welfare Trends report, published last week, shows an upward revision of £3bn a year in spending on incapacity benefits – entirely attributable to delays and mismanagement.
What went wrong? There is lots of blame to go round.
But the evidence points to a combination of hubris on the part of Iain Duncan Smith, a reluctance by civil servants to push back against unrealistically ambitious timetables, and arbitrary, Treasury-driven spending cuts.
Versions of universal credit had been floating round the DWP and Treasury for decades, but were always rejected because of the huge practical challenges.
That doesn’t mean it wasn’t the right thing to do this time.
But nobody who knew anything about how the benefit system actually works thought delivering it in one parliament was remotely realistic.
Sir Bob Kerslake, the outgoing head of the civil service, said recently: “Universal credit was undeliverable and that should have been said at the beginning.”
But no one did say that, or if they did, Iain Duncan Smith didn’t want to listen.
The initial error of an over-ambitious timetable was compounded by a refusal to change course until it was too late.
Even after it was obvious that the programme was well off-track, Duncan Smith continued to claim it was “on time and on budget”.
Again, Kerslake described a “culture of good news” where no one could say that things were going wrong.
Although a version of universal credit is now operating for some thousands of claimants, many are still sceptical that the IT system in use, with lots of manual add-ons, is capable of dealing with the millions who will eventually be on the benefit.
Meanwhile, Duncan Smith’s well-publicised attempts to shift the blame for the mess to civil servants has poisoned relations within the department.
Moreover, universal credit costs money. And the government needs to make significant welfare cuts so that its fiscal numbers add up.
With pensions protected, that means substantial savings from disability benefits, and that is precisely what was promised back in 2010.
Ministers firmly believed that hundreds of thousands of people on incapacity benefits could in fact work, and that the new work capability assessment would show just that, giving the Treasury some of the savings it needed.
So when their own independent reviewer, Malcolm Harrington, told them that the work capability assessment needed major changes, and meanwhile the reassessment process should be delayed, they ignored him; not pressing ahead would have left a significant black hole in the sums.
The predictable result – tens of thousands of appeals, many successful; considerable hardship; administrative chaos; and eventually the collapse of the DWP’s contract with Atos.
And the long-term downward trend in the number of people on the benefit has now actually reversed.
ministers have yet to explain why, if it is really the case that hundreds of thousands of people were receiving the benefit when they shouldn’t have been, the “reforms” are now actually seeing the numbers going up again.
The promised savings, of course, have long since vanished.
In fact, the OBR estimated last week that the delays to the government’s plans for these two benefits are now costing taxpayers close to £5bn per year – dwarfing savings made elsewhere, and leaving a large potential black hole in the next government’s budget.
This is a far more consequential failure, both for claimants and taxpayers, than that of universal credit.
So the next secretary of state will have a lot of problems on their plate. Cut your losses and cancel universal credit, or press ahead despite the risks?
Even more difficult will be dealing with the administrative chaos in the disability benefit system: angry claimants, disgruntled staff, a contractor who wants to escape as quickly as possible, and mounting costs for taxpayers.
And looming over the department is the post-election spending review – welfare will be firmly in the Treasury’s sights again.
Not exactly a golden legacy.
Its sheer size meant that it could be slow and sometimes insular. But it “got” delivery in a way others didn’t.
The hard-to-please National Audit Office described its biggest project – the integration of jobcentres and benefit offices into the new Jobcentre Plus network – as a “considerable achievement … delivering over 800 centres to a high-quality standard, under budget”, with savings for taxpayers and a better service for claimants.
Six years on, that reputation is in tatters.
This decade’s flagship programme – the integration of the six major working-age benefits into universal credit – is far behind schedule, with tens of millions of pounds of IT investment already written off and much more to come.
The NAO’s verdict has been damning, describing weak management, ineffective control, and poor governance, with both ministers and civil servants coming in for severe criticism.
External experts – most of whom supported the principles behind universal credit – are unsure of whether the system can ever be made to work, even several years late.
But this is far from the worst of the failures.
The collapse of the department’s contract with Atos to reassess incapacity benefit claimants means perhaps half a million remain in limbo.
The suffering of individual claimants misclassified by Atos and DWP – in some cases left literally starving – has been well-publicised.
Less so has been the cost to taxpayers.
But the Office for Budget Responsibility’s Welfare Trends report, published last week, shows an upward revision of £3bn a year in spending on incapacity benefits – entirely attributable to delays and mismanagement.
What went wrong? There is lots of blame to go round.
But the evidence points to a combination of hubris on the part of Iain Duncan Smith, a reluctance by civil servants to push back against unrealistically ambitious timetables, and arbitrary, Treasury-driven spending cuts.
Versions of universal credit had been floating round the DWP and Treasury for decades, but were always rejected because of the huge practical challenges.
That doesn’t mean it wasn’t the right thing to do this time.
But nobody who knew anything about how the benefit system actually works thought delivering it in one parliament was remotely realistic.
Sir Bob Kerslake, the outgoing head of the civil service, said recently: “Universal credit was undeliverable and that should have been said at the beginning.”
But no one did say that, or if they did, Iain Duncan Smith didn’t want to listen.
The initial error of an over-ambitious timetable was compounded by a refusal to change course until it was too late.
Even after it was obvious that the programme was well off-track, Duncan Smith continued to claim it was “on time and on budget”.
Again, Kerslake described a “culture of good news” where no one could say that things were going wrong.
Although a version of universal credit is now operating for some thousands of claimants, many are still sceptical that the IT system in use, with lots of manual add-ons, is capable of dealing with the millions who will eventually be on the benefit.
Meanwhile, Duncan Smith’s well-publicised attempts to shift the blame for the mess to civil servants has poisoned relations within the department.
Moreover, universal credit costs money. And the government needs to make significant welfare cuts so that its fiscal numbers add up.
With pensions protected, that means substantial savings from disability benefits, and that is precisely what was promised back in 2010.
Ministers firmly believed that hundreds of thousands of people on incapacity benefits could in fact work, and that the new work capability assessment would show just that, giving the Treasury some of the savings it needed.
So when their own independent reviewer, Malcolm Harrington, told them that the work capability assessment needed major changes, and meanwhile the reassessment process should be delayed, they ignored him; not pressing ahead would have left a significant black hole in the sums.
The predictable result – tens of thousands of appeals, many successful; considerable hardship; administrative chaos; and eventually the collapse of the DWP’s contract with Atos.
And the long-term downward trend in the number of people on the benefit has now actually reversed.
ministers have yet to explain why, if it is really the case that hundreds of thousands of people were receiving the benefit when they shouldn’t have been, the “reforms” are now actually seeing the numbers going up again.
The promised savings, of course, have long since vanished.
In fact, the OBR estimated last week that the delays to the government’s plans for these two benefits are now costing taxpayers close to £5bn per year – dwarfing savings made elsewhere, and leaving a large potential black hole in the next government’s budget.
This is a far more consequential failure, both for claimants and taxpayers, than that of universal credit.
So the next secretary of state will have a lot of problems on their plate. Cut your losses and cancel universal credit, or press ahead despite the risks?
Even more difficult will be dealing with the administrative chaos in the disability benefit system: angry claimants, disgruntled staff, a contractor who wants to escape as quickly as possible, and mounting costs for taxpayers.
And looming over the department is the post-election spending review – welfare will be firmly in the Treasury’s sights again.
Not exactly a golden legacy.
• Jonathan Portes presents Inside Welfare Reform, Monday
27 October on BBC Radio 4 at 8.30pm
No comments:
Post a Comment