Universal Credit and Iain Duncan-Smith, doomed to failure?

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June 26, 2014 by Paul Goldsmith

There are numerous books and articles written about the concept of “government failure”. Governments intervene – mostly with the best of intentions, and either create a new problem or make an existing problem worse. The Universal Credit – a flagship of the coalition government’s attempt to reform benefits – is an example of both.

The idea was to merge six working-age benefits into one. It enjoyed cross-party support from the start. The logic of trying to simplify the system is undeniable, given that current benefit claimants are trying to navigate a maze of more than 30 benefits. The existing benefits system discourages work on low incomes due to every penny earned being lost through reduced benefits, and is too complex, expensive and increasingly unaffordable.

Not only that – it was accepted that Universal Credit has been a personal crusade of a government minister – Iain Duncan-Smith, who nobody doubted was now in politics to try and make a difference. He had once been the leader of the Conservative Party, but was deposed in 2003, but not before a missionary zeal to overhaul the welfare state had been ignited by seeing the deprivation on a visit to Glasgow’s Easterhouse estate in 2002. Hence he was appointed to head the Department of Work and Pensions when the coalition was formed, and the plans put together by Duncan-Smith’s think tank – the Centre for Social Justice for the Universal Credit could become a reality. The aim was, on its national launch in October 2013, hundreds of thousands would be using the new system.

Instead, the programme is in turmoil, millions of pounds have been wasted on unworkable IT, the project has had five different leaders since mid-2012 and is now the subject of virtually open warfare across Whitehall.The Department of Work and Pensions have developed a secretive culture around it, refusing to talk about anything other than bad news – nor admit what is becoming more and more clear – that the £425m spent on it by the end of 2013 might have to be written off.

We shouldn’t be surprised. The Universal Credit was one of the biggest IT projects undertaken by government for decades and was billed by the government itself as the most radical change to the welfare system since the 1940s.

What can we learn from this? Well, the government has proved it can deal with relatively ordered, well-understood situations like building a tunnel or running a sports event. But the Universal Credit is extremely complex, and more importantly, the outcomes of it depend on significant change in human behaviour – if you have a system that aims to make it pay to work instead of live on benefits and that doesn’t happen you could have a problem. It was a project that should have been undertaken incrementally, with constant reviews of whether it was operating in a way that was relevant to the mindset of the individuals it serves.

Duncan-Smith’s colleagues, as well as the select committee on work and pensions that has been interviewing him constantly on the progress of the project, seem to have lost confidence in him. George Osborne is privately quoted as having “realised he’s just not clever enough”. A minister close to the Chancellor was quoted as saying “some ministers improve in office, and some, like IDS, who show they are just not up to it”.  Similarly, Cabinet Secretary Francis Maude pointed out on Radio 4 in January – “the way we do things is very much now more ‘build something quickly, test it, prove it, test it with users’ and so you can’t have certainty about any of these outcomes”.

As to the future – it may be that Universal Credit is delivered. Some say it might not be until 2020 for it to be operating properly. But Tony Collins – a journalist with experience of IT projects, suggested that it will cost more and take much longer than forecast. Collins points out that Universal Credit is not in a good position because “it started, and continued, without senior management having any clear idea how it would work.”

The point is that you can have dreams about systems that can make a difference to peoples’ lives, but if you try and push it through without fully working out how it is supposed to work, and without properly designing how to successfully implement it – then you will fail. The cost of this failure comes out of our pockets so we should care about this.

Talking of failure – Enoch Powell once said the following – “All political lives, unless they are cut off in midstream at a happy juncture, end in failure, because that is the nature of politics and of human affairs”.  I believe that Iain Duncan-Smith genuinely wanted to make a difference. But sadly, his is a career that looks to be ending in failure. Shame.


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