Doom or Dust: Universal Credit Choices

Universal Credit IT is getting nowhere, expensively.  At least that seems in line with the opinions of the Parliamentary Work and Pensions Committee.

“Despite the millions being spent on the end-state IT solution it is still not clear when the system will be ready or even how it will work. It is still not ready for testing on the first 100 claimants, and we have no indication of when it will be possible to test it on a bigger and more representative group of claimants.”

It it 3 years since Quarkside prophesised doom.  It hasn’t quite reached that point, but how close to doom is it?  The Committee Chair said:

“The money wasted on Universal Credit so far – £40 million on IT software that now has no use and £90 million on software with a useful life of only 5 years – is a matter of deep regret.”

Perhaps the Grim Reaper should dust his (or her) spectacles and deal a death blow before the tax payers’ regrets increase.

LAs frozen out of IdAP

Quarkside has heard that the Cabinet Office do not want Local Authorities (LAs) to compete in the Identity Assurance market against the private sector. This is strange because LAs could be more cost effective, given access to standardised private sector products or services.  Assuming that DWP will pay for Id Assurance, couldn’t any of the seven companies on the Id Assurance Programme (IdAP) framework ask LAs to front enrollment for their products?

LAs probably have the most capable local enrollment infrastructure – with the possible exception of Job Centres or some Post Offices.  Many towns with over 100,000 population, no longer have a General Post Office.  For example, Woking residents now have to dive down to a basement of WH Smiths.  What the policy makers have not accepted is that certain levels of trust should have face to face enrollment.  If somebody is receiving benefits of tens of £ thousands each year, wouldn’t eyeballing the person increase the level of trust in credentials presented at later stages?

Quarkside’s suggestion for a process that sets financial trust levels based on the transaction values may not be all that crazy.  Could it have a significant impact on fraud reduction?

IER Update – Compulsory registration

To be fair, the IER Progress Presentation July 2012 did not use the word ‘compulsory’ for voter registration, but the meaning is clear.

• “Opt-out” dropped
• Civil penalty for people who refuse to register ….but ERO must take steps before can be used

This is the result of the consultation process for the Electoral Reform Act (2012).  The objective is to reduce risk of losing voters with more levers to drive registration and to build a more accurate register during the transition to the new scheme.  Believers in our democratic system should be pleased – the current method is too incredible for foreigners to believe.

We have also been given an overview of the IER Digital Service.

This separates the web application used by the citizen with two centrally controlled and hosted systems.  One is run by DWP and the other by the System Owner (Cabinet Office or DCLG?).  Local Authorities (LA1 to LA400+) are expected buy and operate a system from one of four Electoral Management Systems (EMSA to EMSB).  The lines and boxes are easy to draw, but what are the implications to the local Electoral Registration Officers (EROs) and their ICT service departments?

Some more questions spring to mind:

1.  If citizens have to register on the national site, what local credentials do they have to provide?
2. Does the DWP verification imply that somewhere they hold a register of all voters? If so, how does this map to the national policy not to hold national identification scheme?
3. How much trust can the LA put on the identity of the voter, knowing that DWP data is 34% inaccurate?

No doubt all will become clear in due course and the risk register will be opened up to let us all see the major concerns.   The Cabinet Office “want to talk to as many people as necessary – what forums, groups and networks do you know of that could help spread the word?”

SOCITM should be high up the list of organisations to help in the impact assessment to local authority ICT systems.  The current register may have additional local uses that have not yet hit the radar.

Government sidelines SME Innovations

Innovation in Decline

Innovation is needed to kick start the economy, but the old ways are holding back growth. The public sector has been hit by budget reduction.  Large suppliers to the public sector are being squeezed in contract renewals and replacements.  Nobody is demonstrating an appetite for investing in innovation or intrapreneurship.

The old, arcane, procurement regulations are another inhibitor.  Invitations to tender published in the OJEU not only slow down the procurement process, they effectively bar entry from SMEs.  SMEs are the very companies who are most likely to have entrepreneurial ideas and innovative products.

Ministers support SMEs, understanding that they dominate the wealth creating economy.  For example, the Government ICT Strategy aims to:

“deliver policy and capability improvements covering EU procurement regulations; transparency in procurement and contracting; removing barriers to SMEs;”

But inertia in the Executive merely extends the status quo.  SMEs with innovative ideas are not welcomed with open arms into the market place. SMEs are sidelined by Government with the complicity of the big suppliers – neither of whom have the appetite for the perceived risk of innovation.

One Example

DWP’s Universal Credit programme states:

“We estimate that £5.2 billion a year is wrongly paid out as a result of fraud and error: £2.1 billion of fraud and error in Tax Credits and £3.1 billion in Department for Work and Pensions benefits.”  

An OJEU notice was duly published with a value of £15m to £45m for a “Data Access, Processing and Analytics Pan Government Framework”.  Interested SMEs are informed that “Organisations expressing an interest are expected to have a minimum turnover of £9,000,000.”

Any young SME, believing that they have innovative technology to make a £ multimillions impact on reducing error and fraud, are immediately blocked.  They are also unlikely to pass additional financial criteria.  There’s a further off-putting condition: the envisaged minimum number of suppliers is 8 and maximum number of 12.  SMEs are most unlikely to wish to spend valuable resources with virtually zero chance of jumping the pre-tender hurdles.

There’s also a sting in the tail: “DWP wishes to establish a framework agreement that may be used by or on behalf of UK public sector bodies.”  This is not just central government, but also every local authority and even Channel 4.  Does this now mean that they could also be disadvantaged from supplying throughout the public sector?  All public sector bodies should be aware of the DWP negotiated framework, including it in any data analytics contract selection.  The appointed framework suppliers will be in a monopolistic position and easily able to deflect innovative entrants into their market.

A start-up technology company, which may have developed a more effective fraud and error mousetrap, cannot enter the market.  The best it can do is treat with the usual suspects for winning a framework contract and hope to become a sub-contractor.  They may even risk being excluded from directly competing for any other contracts in the public sector.

Such is the fear in SMEs, that they dare not make such examples public. A group of SMEs had to report in camera to the Public Administration Select Committee. See their infamous report “A Recipe for Rip-Offs”.

Portfolio Planning

Every product or service passes through a life cycle of inception, growth, steady state and decline.  In the public sector, it is convenient to map this into a matrix of service portfolios with four categories.

1. Innovating for the future
2. Transforming business processes
3. Reducing transaction costs of customer facing operations
4. Improving essential internal administration and services

There may be overlap of categories, but each should be allocated a percentage of total resources. If any drops to 0%, it is a most unhealthy sign. Large suppliers excel in Transformation, Operation and Administration but Innovation is where SMEs thrive.  Innovation can be a threat to the income streams of big suppliers, so it needs special protection by the Government.  Today’s innovation could become tomorrow’s transformation and eventually the key to efficient operation.

 

 

Message to Government Ministers

Support innovative SMEs with policy changes that will:

1. Guarantee access to Department’s senior levels with a frequent opportunities to make proposals for innovations.  Encourage proposals for cross-departmental funding of joint projects.  Exclude big suppliers from the process, who already have access if they wish to innovate.
2. Reserve some funds for small contracts with SMEs.  Constrain contracts to strict time limits and learn from both negative and positive results.
3. Monitor investment in the Innovation Portfolio across all departments.  Communicate successes and recommend candidates for growing into transformational projects.

No room for oldies

The Default Retirement Age (DRA) was abolished with effect from 01 October 2011. NYCC has adopted an Employer Justified Retirement Age (EJRA) to address existing workforce demographics by attracting and recruiting under-represented groups to vacancies where it is appropriate to do so.

Don’t expect to keep working after age 65, even if you haven’t built up a pension. Age discrimination is live and well.

——-

Having thought a bit more about it, there is no change as far as an employee is concerned – but there is additional bureaucracy for employers. They have to concoct a new policy, set up measuring mechanisms and monitor successful application of the policy. At least with the DRA there was no opportunity for argument about age discrimination or unfair dismissal. SMEs will not be able to afford setting up an EJRA – who will not have the resources to refresh their staff of octogenarians.

The big employers will have no problem with age discrimination, it will just cost them more to administer in the HR department.

What happened to DWP’s policy encouraging older people to continue working after the DRA?

“in order to allow people the choice about when and how to retire.”

Household Hold-up. Universal Complexity

The first page of the Impact Assessment of Universal Credit programme, published in February, makes it clear that HOUSEHOLD is the basic unit of measure:

“In nearly 1.1 million workless households, a person would currently lose more than 70 per cent of their earnings if they move into work of 10 hours a week. The incentives to increase hours once in work are also very weak. At present around 0.7m households in low paid work would lose more than 80 per cent of any increase in their earnings because of higher tax or withdrawn benefits.”

This is great for statistical analysis, such as the principal source of data “DWP Policy Simulation Model (based on FRS 2008/9), 2014/15”.  Modellers are not concerned about the problems of individual low income people nor the staff making benefits decisions.  Quarkside now understands the difficulty of DWP officials answering straight questions like ‘What is a household?”.  Sympathy is due when they are expected to translate into Plain English paragraphs such as these:

32. In most cases workless households experience no change in their entitlement in static financial terms. This is because they do not benefit from the earnings disregard, and their basic benefit rates are as in the current benefit and Tax Credit system.

33. Claimants who are under 25, who are childless and not disabled, are currently unable to claim WTC when they are in work. Therefore they will benefit from the removal of this exclusion within Universal Credit. Likewise households who are working part-time and who receive Tax Credits and other benefits, will gain from the fact that they will have a lower withdrawal rate than under the current system and because they are likely to have a higher earnings disregard.

34. Working households not currently receiving WTC but receiving other benefits will tend to have higher entitlements under Universal Credit. They benefit from the fact the Universal Credit taper is lower than the combined taper on their current suite of benefits and Tax Credits, but they do not experience an offsetting reduction due to the removal of WTC.

35. If households are working less than 16 hours, and are either disabled or have children, then they benefit from the fact that their earnings disregards are generally higher than under the current system. Because they are working below 16 hours they are not currently entitled to WTC, and so will not be affected by the fact that the generosity of WTC is duplicated in the current system.

36. If households are in receipt of Housing Benefit, Council Tax Benefit and Tax Credits then they will have a lower withdrawal rate under Universal Credit and so are more likely to receive higher entitlements.

37. Around 200,000 households who are currently not eligible for Tax Credits because their household income is above the eligibility threshold, also receive Council Tax Benefit in the current system. These households will not be eligible for Universal Credit.

38. The households with lower entitlements will tend to be claimants who are in one or more of the following categories;

• Those in receipt of a large amount of WTC; 
• Those who do not receive HB/CTB;
• Those who have a low disregard;
• Households with substantial amounts of capital.

The policy is not in question.  The ability of agile analysts and systems developers to translate this into code that is consistent with primary legislation is the issue.  Household is a portmanteau word that is concrete enough for shaping policy, but is melting jelly in the minds of people who have to design forms and distribute money.  Computer programmers need to know whether an “or” in a sentence is of the inclusive or exclusive variety.  Drafters of legislation, fresh out of a politics degree, may not even know there is a difference. There are alternative approaches to controlling the costs of social welfare – but the have not appeared in radar of politicians.

Eventually it will be recognised that the solution is totally dependent on Technology.  If necessary, the Governance legislation and the Process practices will have to change.  UK Central Government, and their suppliers, are incapable of embracing such a concept.  UK Local Government will just have to pick up the pieces of broken households.

Universal Incredibility

Local Government have been presented with more information about DWP’s Universal Credit (UC) programme.   The complexity is such that it will replace more than 30 working age benefits, across 4 agencies, with 10,000 pages of guidance.  DWP have published their implementation plan.         

They have been coy about when design and build will finish, let’s say Dec 2012 and about 6 months testing.  All using agile programming methods!

Not declared in the document is another staggering statistic; there 19 million claims by 8 million households.  Households will become the unit to which DWP will pay benefits.  Total household income will be reconciled every month as people move in and out of work.  The new on-line self-service system will speed up registration for  benefits from weeks to days, and avoid the often devastating, annual reconciliation.  The Devil thrives in the detail.  Households may contain parents, step-parents, grandparents, uncles, aunts, children at school, young people at work, unemployed NEETs, students and cohabitees.    To complicate the issue for some beneficiaries, UC will not replace:

• Disability Living Allowance
• Contributory Benefits
• Carers’ Allowance
• Child Benefit
• Pension Credit

Quarkside’s question to DWP about how they are going to define households remains unanswered.

Attempting to design a system without a definition of the primary unit of measure points to incompetence or a guarantee of promotion.  Apparently, top flight consultants are involved.  Perhaps they only have experience of well behaved nuclear families with bags of broadband and integrated internships.  Local authorities have to deal with the fall-out when the edifice crumbles.  Any ICT developer could devise a simple agile program for a consultant’s family – not for a family of travellers where ‘household’ has no meaning and may change on a weekly basis.  Change is second-most important reason for computer system failure, the first-most is getting the wrong specification.  UC hits both sweet spots.

Many new claimants for current benefits cancel broadband contracts as a luxury.   Many older claimants are also digitally excluded.  Currently LAs handle benefits claimants face to face and they employ many staff to do so.  Quarkside does not know the numbers, neither did DWP.  So they enquired to find out the number, perhaps indiscreetly, by asking Heads of Revenues and Benefits what their redundancy costs might be when UC is implemented.  LA Chief Executives were not amused.  Face to face service will be necessary and it is not clear who will provide it from which premises.

In answer to some of these challenges a DWP spokesman was most enlightening.

• Ian Duncan Smith is only interested in outcomes
• There’s a commercial market for recycled computers, everybody should be able to afford one
• 70-80% of transactions will be on-line by beneficiaries
• Most beneficiaries will be in full-time work
• LAs may be asked to work as agents for DWP
• HMRC and DWP are working closely together, but there is a bit of a conflict with DCLG housing policy and benefits caps
• Ease of use is important and wireframe design will eventually help beneficiaries (aka customers)
• LA support is essential for success and more consultation will be carried out
• Writing the letter to Heads of Revs & Bens was a mistake
• £180,000 for developing the system must also  be a mistake, it’s more likely to be             £18million.

Finally, we learn that £8.5b is lost in error, fraud and administration in the current means tested sytems.  How much this is a result of identity error, identity fraud and identity administration?  Quarkside raised the issue in February, “Identity Icebergs to sink Universal Credits“.  There’s not been a lot of action to allay fears by LAs about providing an Identity Hub which collects personal data and matches it with third party credentials.

Pan Government Arrogance

The Local Government Delivery Council (LGDC) was established in 2007 to support the Chair, in the role as one of two local government representatives on the Cabinet Office Delivery Council. The Delivery Council was the pan government body chaired by Sir David Varney, to drive the transformation of public services so these became, ‘better for the citizen, better for staff and cheaper for the tax payer’.

We now learn that the Cabinet Office’s Delivery Council has ceased and there is no longer a pan government body which includes local government representation. Fortunately, an independent LGDC has become the recognised and established body for central government agencies to engage with when they are working with or plan to work with councils to redesign services. They provide one of the few (perhaps the only?) forum where central government departments get to see what other government departments might be planning in relation to local government. Examples from recent meetings have had representatives from:

• DfT – Blue Badge programme
• Cabinet Office – Digital Britain, Id Assurance
• DfE – Employee Authentication Services
• BIS – UK Broadband programme, Post Office programme
• DCLG – Central Local Digital Collaboration
• DWP – Tell Us Once, Universal Credit
• Home Office – Single Non-Emergency Number (101)

It is good that Local Government has the opportunity to provide feedback from the front-line about the realities of providing face to face services. A neat example is the assumption that broadband is ubiquitous and that claims for benefits could be ‘driven on-line’. It was pointed out that broadband is one of the luxuries that go when a household needs to claim benefits. Another example is a department representative having to apologise to irate Chief Executives about by-passing them in a survey of redundancy costs in a specific service.

The governance of central government projects needs much wider involvement of local government experts. They need to appreciate the diversity of requirements around the country and not assume that a token consultation with a couple of representatives is sufficient. Too much of the initial strategy and architectural work is done by World Class Enterprise Management Consultants; their experience of deprivation is as limited as the policy makers from Whitehall.

Agile: Challenge for Universal Credits

The PASC MPs were earballed by DWP about how Agile development would  guarantee that the Universal Credit (UC) system will deliver all that is needed within two years, without a fiasco.  This was shortly after Martin Ferguson (SOCITM) challenged the UC change process, which has not brought in the skills and experience of local authorities.  The inquisitors did not follow up this challenge and seemed to swallow the promise of technology without really understanding why agile is different.

Twelve principles underlie the Agile Manifesto:

1. Customer satisfaction by rapid delivery of useful software
2. Welcome changing requirements, even late in development
3. Working software is delivered frequently (weeks rather than months)
4. Working software is the principal measure of progress
5. Sustainable development, able to maintain a constant pace
6. Close, daily co-operation between business people and developers
7. Face-to-face conversation is the best form of communication (co-location)
8. Projects are built around motivated individuals, who should be trusted
9. Continuous attention to technical excellence and good design
10. Simplicity
11. Self-organizing teams
12. Regular adaptation to changing circumstances

It’s a superficially attractive philosophy, but endorsement by the Institute for Government would not convince many CTOs.  What is more relevant is advice from BT, who have had some success with Agile devekopment:

“To be truly effective, the agile approach needs to reach right across the business, not just the IT organisation. You might expect that the business would be excited at the prospect of having regular deliveries of valuable functionality. However, the business also needs to move away from traditional waterfall practices and change how it engages with the IT organisation.”

Knowing what we know about the risk aversion of public sector – the reliance on Agile may be ill-founded.  Many of the twelve principles run counter to decades of bureaucratic behaviour.

Universal Credit: Doomed to failure

Whilst one must applaud the simplification of the UK’s complex system of benefits, there’s a growing body of informed opinion that the ICT system proposals are doomed to failure.  Just read this from Page 35 of the White Paper on Universal Credit.

“Recipients who have earnings from employment will have those earnings automatically taken into account. We intend to use HM Revenue & Customs proposed real-time information system to identify earnings and to calculate the net Universal Credit payment due by applying the appropriate taper to the gross payment. This means that those recipients who receive earnings through Pay As You Earn will not need to inform us for payment purposes if the amount of their earnings change. Recipients will, though, still need to tell us about other changes to their circumstances which affect their entitlement to benefit, or the conditions they must meet.“

To reassure the readers, there’s a diagram, too.  It looks so easy to design real-time systems, doesn’t it.  There are opportunities for confusion.  As reported earlier, the Cabinet Office were expecting elements to be operational by April 2012, including hundreds of local authority identity hubs.  The White Paper refers to pilots commencing in 2013 and complete roll-out by 2017.

The impact on local authorities (LAs) has been reviewed by CIPFA.  They say “There is very little recognition within the administrative proposals of the Government’s overall localism agenda and, although there has yet to be any final decision on the future role of LAs, there are few specific proposals for any involvement for LAs in the future arrangements for the assessment and delivery of the UC.”   Payment of Housing Benefit currently provides employment for thousands of LA staff.  Will these staff be transferred to DWP or be part of an outsourcing deal?

All in all, the size and complexity of the project are typical of some of the worst failures in large government computer projects.  If history is a guide, then expect the prophets of doom to be vindicated.