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Before groaning about the Universal Credit, it’s worth considering what it is and how it came to be. And I’m not referring to when it was formally announced as Government policy in the Welfare White Paper of 2010. I’m referring to when it was first devised in a Centre for Social Justice report, Dynamic Benefits, in 2009.

Back then, Iain Duncan Smith wasn’t even on the Tory frontbench. He was a backbencher who presented this report as a means of tackling one of the greatest iniquities in Britain’s benefits system. Thanks to the way benefits are withdrawn and taxes are increased, some claimants could lose up to 96 pence from an extra pound earned from work. The path back into employment was cut up by cliff-edges and various other disincentives. It’s not so much that people gained more from benefits than from work – it’s that they didn’t realise it.

Hence the Universal Credit, which rolls several benefits into one payment, and that will be withdrawn from claimants at a constant rate. In the CSJ report, the proposed rate was 55 per cent – i.e. for every extra pound earned through work, folk would keep 45 pence in their pockets. Work must be seen to pay.

When the CSJ report was published, David Cameron and George Osborne were said to be put off by the cost. Yes, money would be saved in the long-run if claimants were returned to work, but there would be an upfront bill running into the £billions. That’s why the Universal Credit wasn’t commandeered as party policy in the 2010 manifesto. That’s why, once it was made Government policy later that year, the withdrawal rate was increased to 65 per cent, saving £1 billion on the original proposals. Making work pay costs money – and the Tory leadership doesn’t want to be too liberal with that stuff.

This potted history lesson helps illustrate a couple of things about the current situation. First, the Universal Credit always was a necessary solution to an urgent problem. Whenever I spoke to people in the welfare trade, they regularly cited the “welfare trap” – the idea that benefits pay better than work – as the biggest impediment to hoisting the long-term unemployed into the labour market. It simply makes sense to undo that trap by reducing the complexity of the benefits system. It makes sense to aspire towards a system that automatically withdraws benefits in line with PAYE data. All this effort must continue.

And it also illustrates, in part, why the Universal Credit has run into such difficulties now. It has always been Iain Duncan Smith’s policy, above anyone else’s, and he has pushed it through against ambivalence, scepticism and even outright opposition from within Government. Osborne has doubted the fiscal sense of it, but it’s not just him. Jeremy Heywood is thought to be sceptical about its viability. Civil Servants from the Treasury mutter darkly about those in the DWP. And those in the DWP have their own gripes, too.

Of course, as I highlighted a couple of weeks ago, this sprawling antagonism has now collapsed onto the computer system that’s being constructed for Universal Credit. The difficult progress of this system was so predictable that I, er, predicted it in November 2010 in a post for the Spectator’s Coffee House – and the reasons were just as clear. Whitehall just isn’t geared for delivering big IT projects on budget and on time. There’s little accountability at the top, among the permanent secretaries and civil servants who are tasked with managing these projects. And there’s not enough expertise and consistency below that, among the civil servants who do the everyday work to deliver these systems. What usually happens is that the big IT contractors screw over the Government.

To its great credit, the Coalition – specifically, the Cabinet Office – is working to overcome these problems. There’s its general civil service reform programme, of course, but there are also some specifics that are relevant to Universal Credit. The Major Projects Authority, which I’ve written about before, was established precisely to oversee such endeavours. And one of the architects of the London Olympics, Howard Shiplee, was hired earlier this year to help out the DWP.

But these efforts are themselves subject to flaws, resistance and delay. For instance, as Rachel Sylvester notes in her Times column (£) this morning, it’s telling that the Cabinet Office’s own team of cheap ‘n’ effective programmers – the Government Digital Service – has had to stand aside and allow the DWP to continue its work on the massive Universal Credit computer. Fact is, there are now so many factional divides in the way of proper policy implementation that it’s hard to keep up. Until they are resolved, or tarmacked over, then the course of Iain Duncan Smith’s grand reform will ever run awry.

54 comments for: Universal Credit must carry on, but Whitehall can’t carry on like this

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