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Universal Credit £425m write-off on the cards as Treasury freezes roll-out

September 2, 2013

Universal Credit £425m write-off on the cards as Treasury freezes roll-out

Today’s report from the NAO has revealed DWP have been told to consider writing off more than £425m spent so far on Universal Credit in addition to a £34m already written off.

Write off

DWP’s accounts are usually published in July each year before Parliamentary recess. This year’s accounts were not published in July but have been withheld until after today’s report from the NAO.  A £34m write-off has already been made, and DWP “is conducting further impairment reviews of the value of its Universal Credit IT assets before finalising its 2012-13 accounts” says the NAO.

DWP has also been told to freeze the roll-out of Universal Credit beyond a handful of Job Centres until the Treasury is satisfied that there is convincing business case. In its investigations, NAO found that the Pathfinder IT already in use is “limited … and does not (work) as originally intended”.

Are all Government IT projects doomed? No.

Other recent Government IT projects have gone well. For example, the DVLA is putting live various new systems incrementally, such as the automation of links between vehicle ownership and insurance information.


Police patrol cars and CCTV cameras are now using number plate recognition technology to stop and search uninsured vehicles, often uncovering much more serious offences in the process.

So, what went wrong at DWP? Lobster pots…

The intended ‘big bang’ implementation of Universal Credit was based on the ‘lobster pot’ principle. The idea was that once a claimant is on the Universal Credit IT system, he/she remains on it – no matter how complex their life becomes.


For this simplifying assumption to work, the IT would have to calculate all six existing benefits simultaneously from the very first day of go-live. But the IT that has been developed so far simply can’t deal with that complexity.

When the coalition government came into power, it introduced a new IT Strategy to ensure that incremental ‘Agile’ development would be the norm, and thus new IT projects would be less risky.  There has been one exception to the rule: the Universal Credit programme.

Despite DWP’s insistence that an Agile and incremental approach was taken on Universal Credit, the NAO and the Cabinet Office “do not consider that DWP has … appropriately adopted an Agile approach.”  The approach was, in fact, the opposite of Agile: it was predicated on a ‘big bang’ implementation of all the Universal Credit functions simultaneously from October 2013.  A target that has now been abandoned.

Can the Universal Credit Programme be put back on track?

Perhaps, but two major problems need to be overcome.

Keep calm on track

Firstly: the ‘lobster-pot’ principle will have to be reviewed to allow a more incremental approach to roll-out. The idea of a ‘big-bang’ replacement of six major benefits by Universal Credit all at once will have to be revisited. The roll-out will be long, expensive and painful.  If the business case does not stack up, then the Treasury may veto further work until a plausible plan is figured out…

Secondly, and whether Universal Credit continues or not, DWP will need to adopt good Agile Project Management principles.  The NAO specify five conditions for this:

1. A realistic plan based on minimum functionality not a complicated wish list

2. A collaborative approach of policy experts and programmers working together

3. Effective programme governance

4. Prudent financial management

5. Improved Agile Project Management capacity throughout DWP

The new Programme Director at DWP, Howard Shiplee, has come from recent successes at the Olympic Delivery Authority and will be working with the Government Digital Service (GDS) and the Major Projects Authority (MPA) on achieving these goals.

If DWP can govern the use of Agile Project Management effectively, Universal Credit may yet recover…

The NAO report is available in full here:


From → Agile Governance

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