Thursday, 15 November 2012

The Next Big Government Disaster

The idea behind the Universal Credit is beguilingly simple. Beginning next year all tax credits, housing benefits, jobseekers allowance and income support will be abolished and replaced with a single scheme, which will act as a top up to what low income people already earn, effectively bringing everybody up to a guaranteed minimum income. It will also reduce the amount of benefit which people lose by taking work, theoretically increasing the incentives to take low paid work. Sounds great, right? It’s got ‘Whitehall debacle’ written all over it.

There are two major reasons for this. Firstly, it depends on a very large and very complicated IT system, and the civil service record of delivering these projects is appalling, as the failed £12.7 billion NHS computer system attests. The IT requirements for the Universal Credit are even more ambitious. It will require real time, monthly data from every single one of the country’s 1.3 million employers, many of whom are not even aware of the scheme. So far, only 1,400 employers have been signed up, and this is supposed to go live within a year. Already the IT firms involved have indicated that they think the timescale is unrealistic, and senior civil servants associated with the project are being removed.

Secondly, any changes to benefits inevitably produce winners and losers, and a scheme of this scale will produce a great many losers. 17% of working households are currently in receipt of tax credits of some form. That’s 3.3 million working households, the kind of people that ministers insist they want to help. I suspect that it won’t take a great deal of investigative journalism to find examples of people who do the right things having their benefit cut by bureaucratic fiat. More to the point this will be happening to people we know, which makes it politically toxic. It’s exactly the sort of bread and butter issue which cuts through to the public, and could damn the government in the way that the 10p tax fiasco damned Gordon Brown.

You could argue that so far all I’ve done is point out that this is a very ambitious scheme being implemented by people with a poor track record, and that with good leadership and management it could work out fine. This scheme is being led by Iain Duncan Smith. I shall leave you with an assessment of his leadership capabilities which was given by an anonymous former colleague of his to Prof Tim Bale, and published in his authoritative history of the modern Conservative Party:

“I can’t think of a good thing to say about Iain. I mean I really can’t. He’s not a bad bloke. He’s not stupid but he couldn’t be a Cabinet minister. He’d be a liability because he’s got these instincts which drag him off without really thinking about things. He’s not very bright. He’s not very loyal either”.

Feeling confident about this yet? 

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