Universal Credit

Liam Byrne Excerpts

Thursday 5th September 2013 Commons Chamber

[Mr Liam Byrne (Birmingham, Hodge Hill) (Lab)]

(Urgent Question): Will the Secretary of State confirm that the facts in the National Audit Office report about universal credit, set out this morning, are true?

[The Secretary of State for Work and Pensions (Mr Iain Duncan Smith)]

I start by reminding the House of the importance of universal credit. Universal credit is a major and challenging reform to transform—

[Mr Duncan Smith]

We would never accuse the right hon. Member for Birmingham, Hodge Hill (Mr Byrne) of being less than cheeky—or, for that matter, of ever attempting to spin anything—but I stand by your judgment, Mr Speaker: a cheeky spinner he is.

Universal credit, I remind everybody, is an important and challenging programme to provide major benefits for claimants and the country as a whole, with a clear financial set of incentives that will get an estimated 300,000 additional people into work and make 3 million claimants better off. However, all major programmes involve difficult issues and difficult decisions, week in, week out. In 2011, I added to the programme and the original schedule—as the right hon. Gentleman knows, because we saw each other and I told him about this—the need for a pathfinder, which I said would start rolling out in April.

I added that provision because I was concerned that we needed to ensure that we tested the IT throughout. By the way, I have done that for every programme—from disability living allowance to the personal independence payment, and everything else. We need to make sure that we are right, and I was concerned that the existing programme was not quite right.

In the summer of 2012—or rather, before that, in early 2012—I instigated an independent review because I was concerned that the leadership of the programme was not focusing in the way that it needed to on delivering the programme as it had been originally set out. The internal report showed me quite categorically that my concerns were right: the leadership was struggling, a culture of good news was prevailing and intervention was required. That was very much backed up by the National Audit Office.

As a result, I changed the leadership team in October 2012 and brought in the brilliant Philip Langsdale, who had successfully delivered Heathrow terminal 2. He was one of the great IT brains in the UK. He made it very clear that the programme was deliverable, and that it needed to be reset so that it could be delivered on time and on budget. When he sadly died, I went to my right hon. Friend the Minister for the Cabinet Office and Paymaster General and asked for David Pitchford—in the short term, while we looked for a replacement—who headed the Major Projects Authority in January. My right hon. Friend agreed to that, and the Cabinet Office helped us to put together the reset programme that had been started by Philip Langsdale.

I accepted the findings of the report absolutely in review, and have made certain that in the last few months we have been working to deliver the programme. It has been handed over to Howard Shiplee, who has now taken over. He wrote recently in The Daily Telegraph that he believed the programme was deliverable on time and on budget. The important thing about Howard Shiplee is that he is the man who delivered the Olympic park under budget and early. His clear indication is that he believes that we might do similar things here. He has made that very clear.

I should also like to remind the House that universal credit is not just succeeding but progressing. It is progressing because we have already started to roll out the pathfinders. I was in front of the Select Committee in July, when I explained that those pathfinders were already teaching us some important lessons. We are expanding those into six new jobcentres and dealing with them. Also, from October, around 100 jobcentres a month will begin using the claimant commitment with new jobseekers. That commitment will act as a contract between the jobseeker and the state. We are already seeing that this is driving people into work. Universal credit is not just about IT. It is massively about cultural change to get people back to work and to ensure that those who do go to work, particularly the poorest, benefit the most.

The NAO concludes on the programme:

“It is entirely feasible that it goes on to achieve considerable benefits to society”.

Every recommendation that the NAO has made in the report has already been made. The key lesson that I take is simply this. The previous Government crashed one IT programme after another, and no Minister ever intervened to change them early so that they delivered on time. We are not doing that. I have taken action on this particular programme. This programme will deliver on time and will deliver within budget.

[Mr Byrne]

Our bible, “Erskine May”, states clearly on page 201 that Ministers must give accurate and truthful information to the House,

“correcting any inadvertent error at the earliest opportunity”.

On 5 March this year, the Secretary of State told my right hon. Friend the Member for East Ham (Stephen Timms) that

“the implementation of universal credit…is proceeding exactly in accordance with plans.”—[Official Report, 5 March 2013; Vol. 559, c. 827.]

We now learn from the National Audit Office that the month before that statement was made, the Department began a 13-week reset programme. Four weeks earlier, the Department reduced case-load forecasts for next April by 80%. Five months before, the Department had largely stopped developing systems for national roll-out. It is inconceivable that the Secretary of State did not know about that, because the reset programme was organised by the man he personally brought into the Department. Furthermore, in a letter to me last month, the Secretary of State told me:

“I closely monitor the progress of this ground-breaking programme”.

The NAO must agree its facts with the Department. Paragraph 13 of the NAO’s report states:

“The Department is now reconsidering the timing of full rollout”,

and that plans have changed three times in four months. This morning, the National Audit Office told me that the NAO and the permanent secretary have agreed that statement, yet it flatly contradicts what the Secretary of State has said to this House. To hit his deadline at the end of 2017, he must now move more than 200,000 people a month on to the new system—the population of a city the size of Derby.

The Public Accounts Committee will no doubt consider next week the changed timetable, the IT shambles and the write-offs, the lack of counter-fraud measures, the shambolic financial control and the ineffective oversight. What I want to say to the Secretary of State, however, is this: he has let this House form a picture of universal credit, which the nation’s auditors say is wrong. The most charitable explanation is that he has lost control of the programme and lost control of the Department. He must now correct the record. He must now apologise to the House and convene cross-party talks to get this project back on track. The quiet man must not become the cover-up man.

[Mr Duncan Smith]

I must say that that was suitably pathetic, coming from the right hon. Gentleman. He knows very well—he has been in to see me on a number of occasions; I would like to say what he said, but it was unmemorable in every single case—that the reality is that this programme, as I said at the beginning, will be delivered in time and in budget. There is no major change to that. What I have done, and I did early on, is something that the right hon. Gentleman never did and Labour has never done. When I got concerned about the delivery schedule, I made changes and intervened, bringing in the right people to do that. I stand by that, and I will not take lessons from the right hon. Gentleman and his party. Let me just remind them of what happened when they were in office.

The benefit processing replacement programme was scrapped at a cost of £140 million, and no one apologised. The Child Support Agency wasted £500 million before the programme was scrapped—no Minister intervened; no Minister changed it. The Labour Government wasted £3 billion on benefit overpayments. The tax credit system was delivered at one go on one day and it collapsed, costing billions, with £30 billion lost in fraud. The programme that delivered the health service IT changes cost £13 billion when it was cancelled with no apologies.

The lesson that I have learned and that we Government Members learn, in conjunction with my right hon. Friend the Minister for the Cabinet Office and Paymaster General, is that we check these programmes while they are progressing and if changes need to be made, we make them. In making those changes, I stand by the fact that the purpose is to deliver this programme—on time and on budget, which is something that the Opposition never did in the whole of their time in government.