Plans for the Universal Credit will create the same failures as we are seeing in HMRC: millions of unanswered calls, backlogs and errors – costing the taxpayer billions. The proposals – a website service and a national call centre – would work if peoples’ needs were simple and unvarying; taxation and benefits are anything but.
The move represents ministers’ wrong-headed belief in economies of scale; ministers think that these ‘lower-cost channels’ (web and phone) will mean a lower-cost service. In fact, because of the inherent variety in demand (people’s problems are different) the plans will increase the volume of transactions, just as these ideas have in HMRC.
While Iain Duncan Smith claims the information technology to be used is ‘tried and tested’, he provides no evidence to support his claim. Indeed the evidence points the other way. Computer systems are notoriously bad at dealing with variety. In addition there is clear evidence that local fraud detection is
far more effective than nationally-organised fraud detection. And local authorities that have rejected DWP guidance on how to manage their benefits services are delivering benefits in a matter of days, dealing with each claimant in the round, preventing further transactions with other services.
It illustrates how peoples’ lives are complex and their needs are better served by people, not computers, only people can absorb variety. What’s more, these local authorities, having vastly improved their services, are also achieving 30 to 50% efficiencies. If the rules for the Universal Credit were specified today, these authorities could deliver it today, with no investment in information technology and no seven-year plan for change.
The arguments against the plans for the Universal Credit were presented to a conference of local authority benefits managers, and the reaction was so strong that it has precipitated a campaign. To open the campaign I wrote an open letter to Lord Freud and Iain Duncan Smith.