Universal Credit

Wednesday 21st December 2011 Lords Chamber

Question

11:21

Asked By

[Lord Touhig]

To ask Her Majesty’s Government what conclusions the review body considering major government information technology projects came to following its review of progress on the universal credit programme.

[The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud)]

Following the recent review of the universal credit programme, the Major Projects Authority made a number of recommendations, which are being taken forward, with a further review to take place in spring 2012.

The Major Projects Authority will publish information on the progress of the Government’s high-risk and high-value projects, referred to collectively as the government major projects portfolio, alongside the first annual report at the end of this financial year.

[Lord Touhig]

After a conversation I had with the Minister yesterday, I thought he might be painting a much rosier picture. Can the Minister confirm that work on the IT project for universal credit is so far behind schedule that it will not be possible to use it when the credits are piloted in April, and that an interim solution will have to be used that will put a burden on business and industry? How much will that cost companies the length and breadth of Britain?

[Lord Freud]

My Lords, I am pleased to confirm that the project is on time and on budget. The second paragraph of the MPRG letter states:

“Let me congratulate you on the significant progress that has been made”.

I think that the noble Lord is referring to a particular aspect of the RTI HMRC project where we have gone with what we call an interim solution to providing information on people's earnings per month in a way that will allow companies to have a stepping stone into what we call the strategic solution, which we plan to introduce in 2016. The gains to companies of that process are estimated at £300 million a year.

[Lord Maclennan of Rogart]

Can my noble friend indicate what up-to-date information the Government have received on the feasibility of full implementation by their target date of October 2013, when all employers are expected by the Government to be on the real-time information system, coinciding with the start of universal credit?

[Lord Freud]

Yes, my Lords, simplifying the process, the RTI pilots will start in April next year with a group of 300 volunteer software developers, employers and pension providers. In the autumn of next year, we will have integration testing, with a view to having the full migration of everyone from April 2013 to October 2013.

[Lord McFall of Alcluith]

My Lords, can I bring to the Minister’s attention the Cabinet Office document, Major Project Approval and Assurance Guidance? Paragraph C.15 says that the assessors designate projects as either “noteworthy and positive” or “noteworthy and cause for concern”. Under which category does universal credit come? Can the Minister place copies of these designations in the House of Lords Library so that we can trace these issues and save the taxpayer many billions of pounds, as we could have done in the case of HMRC over the past few days?

[Lord Freud]

My Lords, basically our categorisation in the latest plan is that urgent actions are still required. We are tending towards the problems appearing to be manageable with the actions in hand. That is the position that we are in, which will probably be no surprise at this stage in the project.

[Lord McKenzie of Luton]

My Lords, can the Minister confirm that the major projects review to which he has referred encompasses not only the universal credit component but the HMRC RTI component, which is a vital part, as the noble Lord has explained? What further assurances can he give us that continuing HMRC job cuts will not deflect progress, especially given this week’s news from the Public Accounts Committee about the need to deploy resources for urgent action to resolve uncollected tax of £25 billion from large companies?

[Lord Freud]

My Lords, there are two processes: the assurance of the RTI programme and that of the universal credit programme. The RTI programme went through its latest assurance rather earlier than the UC assurance process, which was reviewed between 9 and 11 November. The review said that the engagement between the DWP and HMRC represented an exemplar of how these things should be done. I am looking through this project very closely, as noble Lords can imagine, and one area that I am pretty confident about is that the relationship between these two departments is right and working well.

[Lord Knight of Weymouth]

My Lords, for the universal credit system to work, the tax and benefit systems need to be successfully merged, as do the IT systems at the DWP and HMRC. The Minister talks about a good relationship, and he is very happy with his relationship with HMRC. However, can he really give us confidence that HMRC, as an unaccountable ministerial body capable of writing off £25 billion of taxpayers’ money, is going to be able to produce a real-time information system that talks seamlessly to the DWP IT system so that universal credit can work?

[Lord Freud]

My Lords, an extremely thorough process of review and assurance is taking place on a rolling six-month basis, and it is clearly a process that we rely on to monitor from the outside whether we are doing the right things. Currently, as I said, both these programmes are on time and on budget. You cannot predict the future but that is a very good, solid base on which to look into the matter.