Universal Credit: Has the Train Has Left the Station?

 

During last month MPs put questions to ministers about the plans for delivering the new Universal Credit (UC) – a benefit payment to people that encourages them to find and stay in work, which is planned to be delivered online. To summarise the questions and answers:

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Q: What evidence is there that costs will be lower? A: Online costs are a third of telephone costs.

 

Q: What arrangements will there be for individuals needing to provide information about personal circumstances which cannot be provided through the automated system for delivering UC? A: UC will make use of claimant information already held where possible. Otherwise the claimant will be asked to provide information about their circumstances, predominantly by online self service.

 

Q: What arrangements will there be for complex cases that can’t be dealt with through the automated system? A: In some cases, it will still be necessary to make judgements about evidence or entitlement, and those assessments will continue to be made by members of staff.

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What can we conclude? Ministers are still wedded to a set of plausible but wrong-headed beliefs: costs are associated with transactions; web transactions are cheaper, so we will force people to use the new web-based service. The government line is that UC will be rule-based and largely automated both to reduce administration costs and deliver better value for money for the tax payer. Sounds plausible, but, as regular readers know, I am confident that such a rule-based system will fail to absorb the variety of demand, and costs will be driven up.

 

It Gets Worse

 

Note the minister’s answer that UC will make use of claimant information ‘already held’. This relates to the recent announcement that every employer in the country is going to be obliged to send PAYE data electronically, every month, to HMRC. Leaving aside HMRC’s profound incompetence, in the news for extraordinary failure every month – of which more later – the question is why should this be central to delivering the UC?

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It reminds me of the rationale for the now defunct NHS computer system. Someone from Blackpool may fall ill in Birmingham; a national IT system would ensure that as soon as that ‘patient’ connected with the NHS, the person whose job it is to help would know everything the NHS knew about the patient. It begged the question: how many people fall over somewhere other than home and are disadvantaged by the lack of that information? No one knew the answer.

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In the case of UC, how many people on PAYE will be claiming UC? Does it make any sense to have everyone’s PAYE information on a database if only a few will be claiming UC? Moreover, where information about earnings and tax paid is relevant to benefit claims, what do we know about how well the current method for providing it works? In other words, what problem are we trying to solve, do we even have a problem?

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It is probable that HMRC is trying to solve another problem: PAYE has run into massive difficulties because the new lean standardised work design has not been able to cope with the variety in PAYE (these days more people move jobs and or have a number of jobs at the same time), something the accountants are understandably unhappy about. See this:

http://www.accountancyage.com/aa/opinion/2029752/hmrc-s-paye-prescription-wrong-remedy

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But to go back to the questions about demand and capability above, these are questions the IT providers wouldn’t know to ask, or would prefer not to ask in case it jeopardises their opportunity to make loads of money. More databases, more requirements for connectivity and time spent developing rules for decision-making are grist to the mill of people who build IT. The bigger this initiative gets the better.

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This project has all the hallmarks of disaster: beliefs rather than knowledge driving the design, IT wallahs claiming features as benefits (if you have databases containing everything you might need to know about people it will work) and DWP managers believing them, for everything DWP managers have been bullied into over recent years has been based in the false assumption of economy of scale.

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And lo, to cap it all, the IT providers are starting to have doubts. See the story here:

http://www.guardian.co.uk/politics/2011/jun/19/universal-credit-2013-delivery-doubt

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The IT people say, inter-alia, that there will be many ‘exceptional’ cases, indicating precisely the problem they will run into with a rules-based system.

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As regular readers will know, I have introduced the DWP’s UC project-team leaders to Vanguard clients who have explained how they had to rip out IT systems where they have been found incapable of absorbing variety. My clients tell me the visits have gone ahead, but we see no evidence that the issues have been understood. In every case the clients moved to a human contact first-point resolution design, there is nothing in recent pronouncements that reflects this thinking. But this is the essence of low-cost high-quality service design.

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Insiders tell me that DWP leaders, in response to rising doubts, claimed that the new system will be able to handle 70% of UC claims. Following much ‘pushing back’ on that number, it has been revised down to 50%. Here we go…

When I met with the DWP, I told them I was confident that people who have employed the Vanguard Method to re-design benefits services would be able to develop a Universal Credit service in seven months – not seven years – and with little spend on IT. The offer is still on the table. They promised to come back to me after visiting my clients, who knows if they will?

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This is one to watch, the list of IT providers and sums to be ‘invested’ have yet to be disclosed.

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HMRC: An Accountant Laments

 

An accountant who has good relationships with people in HMRC tells me he has learned what happens to letters he sends to the tax man. Wherever they are sent, they actually all go off to a central location for batching and sorting. Or, as he says, ‘mis-sorting’. To quote him: ‘… even if you have just spoken to a tax official, and know his name and address, and even if you highlight his name and address on the envelope, your letter will only end up in a log jam somewhere miles away. Of course this is breeding deep frustration in those people who work in the local tax offices. Imagine having to tell your clients, as they do, that it will take six weeks before your letter can be dealt with.’

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Yes, HMRC people despair about their system, how motivated must they feel?

 

He continues: ‘… we are aghast at such an inefficient development and wonder how on earth their management can have thought of such a bad idea.’

 

My bet is they got it from the lean tool-heads. Tool-heads like post-rooms as they remind them of factory environments. HMRC managers treat academic tool-head reports as support for their wrong-headed thinking, if only they knew how much they have been duped.

 

And More

 

A reader writes:

 

‘Just sat with my accountant reading him your HMRC stuff. He tells me that one of his clients has just been fined for a late return of tax, they submitted on the 28th – the deadline was, of course, the 31st. They appealed and were told in writing that they should have forecast HMRC’s workload and got it in earlier! They turned down the appeal.

The second appeal was successful.’

 

And More

 

Another reader writes:

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‘One for the HMRC Emaciated – I mean Lean – pile. I missed paying my Company’s PAYE one month in the last tax year so at the end of the year when I declared the total PAYE for the year I was a little bit short. So early in May I got a demand for the balancing payment plus a few pounds interest. I duly paid up around the middle of May.

Today, in the middle of June I get a further demand for the payment. I check my company bank account and yes it has been paid to the right account and with right tax reference. So I ring HMRC. 15 minutes later after umpteen ‘we are experiencing high call volumes’ messages (I wonder why?) I get through. The money I paid has gone into this tax year 2011-12 instead of 2010-11. But as I didn’t get the payment request for last tax year until this year and paying online doesn’t allow me to specify the tax year it inevitably went into the current year.

Their system isn’t designed against demand. The nice (but obviously tired and bored) gentleman at the other end knew what the problem was…’

 

It Makes Workers Sick

 

Being tired and bored easily escalates to being ill or simply wanting to get away from work, so HMRC sickness rates are up. Management’s response? A new absence management programme! Managing symptoms, not causes, a complete waste of time.

http://local.stv.tv/east-kilbride/news/19084-tax-office-staff-walk-out-over-sick-leave/

 

It Makes Citizens Sick Too

 

Charlotte Pell wrote an excellent essay on the human consequences of the thinking behind UC and other Whitehall-inspired factory projects. You can read it here:

http://www.opendemocracy.net/ourkingdom/charlotte-pell/call-centre-welfare-coalition-plans-to-dehumanise-state

 

A reader alerted me to a blog that describes how public services fail to meet the demand of users and has created an industry of people who are employed to deal with the failure:

http://www.cles.org.uk/yourblogs/a-million-little-betrayals/

 

Big Society is Big Business

 

The UC is an example of government’s continued obsession with ‘big’ industrialised design; it is to believe wrongly that big is cheaper. Lots of similar examples pervade current government initiatives, here are some:

The Department for Culture Media and Sport is seeking bids from suppliers to equip the country with broad band. Any who want to supply have to meet a ‘turnover threshold’. In simple terms this will cut out small enterprises ensuring that only the big will be able to bid.

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We see the same with housing services; it gives preference to big companies in the same way: revenue as a criterion for tendering. Remember Connaughts?

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We see the same with procurement of ‘local’ services like drug treatment. ‘Commissioned’ services are aimed at large providers. Worse, ‘commissioning’ specifies what is to be done. A sure-fire way to ensure the service fails to meet the variety of demand and so will fail to achieve purpose.

The Voluntary Sector Campaigns…

 

The National Coalition for Independent Action (NCIA) is a network of individuals and organisations who believe there is a need to defend independent voluntary and community activity. They collate evidence on the dangers of commissioning, localism and ‘big society’ initiatives, arguing that ‘localism’ and ‘big society’ plans will increase government control, erode accountability and equality and make it more difficult for communities to thrive. They have lots of reports on their web site. Maybe, if you are interested, you should start with the summary paper:

http://www.independentaction.net/wp-content/uploads/2011/06/NCIAprivatisation-10page.pdf

 

The Cost of CBL

 

Regular readers will know that Steve Bundred, ex chief executive of the Audit Commission, saw Choice-Based-Lettings (CBL) as an innovation, whereas I wrote a whole chapter in the public-sector book about how wasteful and unfit for purpose it is. A housing association in the North has been studying their CBL service. Aside from learning how it fails to achieve the purpose, they have learned it is costing them £1.8 million per year to run! Currently there are 300 organisations running CBL across the country. You can do the maths. Why won’t the minister simply announce it can be scrapped? Because the minister doesn’t know what these people know and he is surrounded by others who think they know better. Sometimes I wish I were the minister, I’d save a fortune in my first week.

 

How to Feel Better

 

Much of the foregoing can make one feel a bit miserable. I have found the best way to get a fast fix of happiness is to visit people using the Vanguard Method to change their services. Last month I popped into a council in the West Midlands where I met people who had re-designed planning services (‘development control’) and adult social care. What gives you a buzz is their enthusiasm. While they too are astonished at the results, what they want to talk about is how it has changed their thinking and how proud they are to deliver a service that works. Local people had been complaining loudly about the planning service and they have noticed the enormous change.

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I also called in on a private-sector client that originally had a plan to repatriate telephone calls from India which included extra costs for more UK resources (people) to cope with the anticipated volumes. They used the Vanguard Method and now handle all calls in the UK with less than the original resource. It is a lesson in why this change needs no plan. They have also involved the regulator in re-thinking regulatory control to make the experience better for customers (as well as more efficient) and the culture of improvement is palpable.

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And as I listened to Dan Pink in New York two weeks ago, I reflected on how motivated people are when they work in a systems design. Pink is a latter-day Alfie Kohn, who wrote a brilliant book ‘Punished by Rewards’. In short, what we know about motivation is that people need autonomy, mastery and purpose to perform in a highly motivated way. Pink’s ‘take-away’ – (so what do you do about it?) amounted to giving employees a day a month to innovate. When you see what’s going on in the Vanguard designs people are innovating every day.

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You Couldn’t Make This Up

 

Some numpty consultants have been flogging a new scheme for dealing with unhappy customers. The idea is simple: if a customer trawling through the IVR (‘press 1 for this, 2 for that’) is someone who is calling because their issue was not dealt with properly the first time, they can select an option that puts them through to a ‘solutions’ team (‘if you are calling because we failed to resolve your need on a previous call, please press 2’).

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In every case where I have seen it employed, the size of the ‘solutions’ team is growing. Someone should shoot the numpties.

 

The Vanguard Method and Policing

The minister for policing has agreed to open an event on the Vanguard Method in policing. When he saw what the police force was achieving on the ground he was impressed. The date is September 13th, location probably Birmingham. If you want to register your interest please contact Maria: office@vanguardconsult.co.uk

 

Some Dates for Diaries

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I shall be speaking in:

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Sydney, Australia, August 30th.
Melbourne, September 2nd.
Wellington, NZ, September 5th.
Helsinki, September 28th.
Copenhagen, September 29th.
Antwerp October 3rd.
London October 12th.
Munich, October 18th.
Manchester November 8th.
Stockholm, November 15th.
Gothenburgh, November 16th.
Norway, November 17th.
London November 30th.

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For information on any of the above please contact Maria: office@vanguardconsult.co.uk