Order. Just before the Secretary of State develops his remarks—the exchanges will run on—I say very gently to Mr Byrne that the proper form in these matters is to stick to the urgent question in the terms submitted. It is not appropriate for a Member to refine, adjust or spin the terminology of the question. We really must stick to the terms. I am not impugning the integrity of the right hon. Gentleman—[Interruption.] No, no; I am not doing anything of the kind. What I am saying is that I think he has behaved in a mildly cheeky manner, and I hope he will not do that again.
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.
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”.
“the implementation of universal credit…is proceeding exactly in accordance with plans.”—[Hansard, 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.
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 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.
Does my right hon. Friend not feel that every time Labour Members snipe at him they simply show that they are not serious about welfare reform? Does the National Audit Office report not show that universal credit can substantially benefit society and, indeed, can benefit society by some £38 billion by 2022-23?
The reality is that this NAO report is very clear about the benefits and very clear that if we get the resets right—it gave us a list of them—and every one of those items has been done, it will save £38 billion. More than that, it will help improve the lives of the least well-off as they are delivered back into work. We should remember that I inherited from the previous Labour Government a chaotic system costing billions—and we are putting it right.
Like many Secretaries of State for Work and Pensions, I looked at something like universal credit some 12 years ago, and I was advised then that it was technically very difficult, if not impossible, to implement it at anything like an acceptable cost and that whatever the cost I was quoted, it was likely that it would end up costing an awful lot more. I have listened to the right hon. Gentleman this morning claiming that this project is on track and on budget, which I find extraordinary when the NAO says that it is anything but that. I have also listened to him blaming all those around him for letting him down, so will he tell us what advice he received when he gave this the go-ahead in 2010?
I can tell the right hon. Gentleman, whom I usually respect—and he may recall that we were facing each other across the Dispatch Box at the time when he was looking into the matter—that the advice I received then made absolutely clear that universal credit could be delivered and a timetable could be set in the Department. I take full responsibility for the delivery of universal credit, and I will not shirk that responsibility. I intend to deliver it on budget and on time.
The NAO is an historical report. It relates to the period during which I was making the changes. Those changes have now been made, and all the outside advisers and experts believe that universal credit is deliverable. The right hon. Gentleman’s party has said that it supports universal credit, and I was happy to receive that support, but Opposition Members have continually voted against it and carped about it. I think that it would be far better for him to ensure that they stay the course.
Will not 3.1 million people, including many in Brighton and many on the lowest incomes, be better off and receive a higher entitlement under universal credit?
That is absolutely true. That is why this programme is worth seeing through, and why having the nerve and decisiveness to see it through is so important. Of course there were difficulties—I do not shy away from that—but the changes that have been made by my Department, the Cabinet Office and external parties will deliver the system on time in order to benefit the very people to whom my hon. Friend has referred, while the Opposition carp and forget their own history.
I am very disappointed by the bullish way in which the Secretary of State has behaved this morning. I believe that it was the same attitude that dismissed the voices of members of my Select Committee and those of many others who suggested that the implementation of universal credit was not going as well as was being claimed. From now on, will the Secretary of State set realistic time scales for the roll-out of universal credit, will he be honest, open and transparent about the challenges posed by the introduction of such a large and complex system, and will he stop over-promising what cannot be delivered?
When I appeared before the hon. Lady’s Committee in July, I was very clear about the changes that were being made, and also about the fact that we would return to the Committee with the full roll-out timetable in the autumn once we had delivered it. That is what we were asked to do, and I will do it.
I am not being over-bullish about this. The fact is that it takes determination to drive a reform through. I have that determination, and the Department is determined to make this happen, with support and help. It is in all our interests for that to be done. We believe all those who have been charged to deliver it and who say that it can and will be delivered on time and on budget. I see no reason why that should not happen, and indeed the National Audit Office said that it was wholly feasible for it to happen.
The previous benefits system was confusing and unfair. Given that the Government are committed to resolving that problem, will my right hon. Friend tell us when a million people will be covered by the new universal credit system? That is what we should be aiming for, as a first step.
All I can say is “at the earliest”, but we want to shift as many people as possible. I would rather think in terms of how quickly we can move people from tax credit and jobseeker’s allowance to universal credit, and I hope that that will happen well before the election. I expect big volumes to be running through, but we need to take our time in order to ensure that when we roll out the IT, it works properly.
I have made the changes that I have made in order to ensure that the system is delivered safely. I could have just let it run. I could have accepted the word of some people that it would be all right on the night. However, I did not. I took the job of making sure that we knew whether it was all right, and I have made the changes that are necessary for the delivery of the programme.
I will not give that estimate now, because I intend to make a clear statement in the autumn about how and when we will roll this out. All I can tell the hon. Lady is that there will be significant volumes, and that I intend to close down jobseeker’s allowance and tax credit well before the election.
Is my right hon. Friend aware that the Public Administration Committee will produce an important report tomorrow about civil service reform? It comes as no surprise that the Comptroller and Auditor General has said that his programme lacked “an appropriate management approach”, adding:
“Instead, the programme suffered from weak management, ineffective control and poor governance.”
These are problems that afflict all Departments, and have done so for many years under the last Government as well as this one. Will my right hon. Friend support the civil service reform so determinedly championed by my right hon. Friend Mr Maude, to ensure that we secure the change in Whitehall that we need?
First, let me say that I am a complete supporter of my right hon. Friend the Minister for the Cabinet Office and Paymaster General on the civil service reform plan, and I have been from day one. The truth is that if the Opposition were in thinking mode they would have agreed with that as well. The reality is that today’s NAO report shows there were problems in the running of this programme. I intervened when I discovered that and changed it, but I never expected to have to do that. When I arrived, I expected the professionalism to be able to do this properly. So my view is that I have intervened in the right way. All the other programmes of IT change are working and are well run—and they are well run by the Department. This one was not. We have made the changes necessary.
The Secretary of State does, however, still need to explain why he came to this House in March and said the programme was proceeding according to plan when, in fact, he knew at that point that a month previously he had had to rip up those plans and reset the whole programme. Why did he do that? Why did he not give a more candid account to Parliament in March?
The plan is, and has always been, to deliver this programme within the four-year schedule to 2017. At the time I came to the House, I believed that to be the case, and I am standing here today telling the House—whether Opposition Members like it or not—that that is exactly what the plan is today. We will deliver this in time and in budget, and I have to say the changes were made deliberately to ensure that.
May I invite my right hon. Friend to welcome the shadow Secretary of State’s conversion to caring about the use of taxpayers’ money, and in doing so would he like to remind the House how many of the Government’s welfare cuts and changes the right hon. Gentleman has opposed? May I also urge my right hon. Friend to adopt the cross-party talks the shadow Secretary of State urges, because whatever advice he gives, my right hon. Friend will know to proceed in exactly the opposite direction?
I am always willing to see the shadow Secretary of State; he has been in three or four times, and I will be very happy to see him again if he wishes. Honestly, however, my hon. Friend is right: the Opposition have opposed every single welfare change. We will be saving £80 billion as a result of our welfare reforms, and we have already, last week, seen the lowest number of households without work since the last Government were in power. We have seen fewer people economically inactive, and we have seen a fall of over 300,000 in the number of those out of work or economically inactive.
I had a conversation with the late Philip Langsdale before he took up his post, and I must say I had the most profound respect for the man. He took over the post because of previous project management failures. May I remind the Secretary of State that it was he who signed off the contract that led to those project management failures? Rather than simply blaming civil servants—although I agree with the Chair of the Public Administration Committee about the need for change—why does the Secretary of State not accept the blame himself?
I am not blaming civil servants—[Interruption.] No: I made decisions that led to the removal of some of those who were charged with the responsibility of delivering this. Today’s NAO report is very clear that that culture of secrecy and of good news did not help run those departments. That does not run all the way through every programme. We are delivering DLA PIP and that programme has been modified and changed because they have brought forward all the concerns. It is the same with the CMEC CSA changes and the cap changes. All of those IT programmes have been dealt with in my office in conjunction with them in the proper way. This one was not. I am simply saying that Philip Langsdale—the hon. Gentleman is right that he was a brilliant man—said to me at the beginning that this one did not tell the truth.
Does my right hon. Friend agree that all this debate about the minutiae of a complex transformation and simplification of what, by any measure, is a very complicated benefits system, risks losing sight of the bigger picture, which is that universal credit will mean that work always pays, and that whatever the costs of developing the system, they will be a small fraction of the billions of pounds that will be saved in the long run?
My hon. Friend is right about that. I remind the House that under the previous Government, in the six years preceding the election, tax credits cost £180 billion-plus because of the shambles and the mess they were in. They lost huge sums through tax fraud and evasion, and we are putting that right. Our welfare reforms, including universal credit—all opposed by the Opposition—will change it, and they are already having an effect. Not one of our reforms has been supported by Mr Byrne, who has carped and voted against every single one.
One of the most damning criticisms in the National Audit Office report relates to the lack of a proper fraud detection system as part of universal credit. When Lord Freud, the Minister with responsibility for welfare reform, came before the Select Committee on Communities and Local Government earlier this year, he said that a new fraud detection system would be put in place. Why did the Secretary of State allow this programme to run for so long without an adequate fraud detection system being part of it?
That is exactly one of the reasons why we intervened back in 2012—the system they were trying to integrate was not going to work correctly. That was already evident by the end of 2011 and early 2012. The problems were such that when I introduced the independent inquiry, it told me categorically that this was not going to work, so we have changed it and reset it. In conjunction with the Cabinet Office, we have seen that there is a better way to do this, and we believe that the integrated fraud programme will deliver results in the new roll-out.
When the Select Committee visited the north-west we saw universal credit working, albeit in a limited manner, and being well received by the staff working with it. It was having a positive impact on the claimants they were working with. Surely, however, it is right not to roll out this programme so fast and risk millions of people not getting the benefit that they are expecting to get. So may I urge the Secretary of State to say to the House that he will not rush this and that he will get it right before it is rolled out to more people?
I agree, and I must say what the problem has been throughout all this. When I introduced the pathfinder, which said that there would a delay in the way we rolled this out, Labour criticised us for delaying the roll-out. Then, later on, it criticised us for not doing it properly. The reality is that we are doing this properly. We will not do it against artificial timetables, but it will be done in the overall four-year timetable and it will be effective.
The Secretary of State has told us today that he had serious concerns in the summer of 2012. He also told us that he then changed the leadership in October 2012. Does he recall what he said to this House in September 2012? He said:
“For what it is worth, I take absolute, direct and close interest in every single part of the IT development. I hold meetings every week and a full meeting every two weeks, and every weekend a full summary of the IT developments and everything to do with policy work is in my box and I am reading it. I take full responsibility and I believe that we are taking the right approach.”—[Hansard, 11 September 2012; Vol. 550, c. 154.]
Culture of secrecy and good news, or what?
I do not resile from any of what I said; that is exactly the way in which we have tried to manage it. But of course, someone is only as good as the information given to them. I must say to the hon. Gentleman that by September 2012 I had already started the reset process and brought in Philip Langsdale. He was coming into the office and we were going to make those changes. The reality is that this will be delivered on time and on budget. That was my view then and it is my view today. The key thing is that those charged with the responsibility of doing that have the skill to do it.
Is my right hon. Friend aware that his transformative scheme has enormous public support, as it will revolutionise dependency by reducing it in this country? Does he note, as I do, that in office the socialist Opposition swallowed any number of camels and are now straining at a gnat?
My hon. Friend is absolutely right. As I said earlier, the Labour party has opposed every single reform since we came into government. Those reforms are set to save some £80 billion, and universal credit is part of that. At no stage have the Opposition told us what they would do instead. When they said that they would support universal credit, they voted against it. This is a party in opposition that is so opportunistic that it catches itself in the morning disagreeing with itself in the evening.
Since the Secretary of State took personal responsibility for this failure, we have seen a delay in the time scale for the universal roll-out of universal credit, a reduction in the number of pathfinder programmes, which has gone way down, and claimants being reduced to the simplest to pass through the system. When he gives us the time and the budget, as he undoubtedly will again, could they at least be accurate? I say to him that when it comes to spinning it takes one to know one—but his spinning will not create humour in the country. It could be catastrophic for benefits claimants.
The hon. Lady, not for the first time, is completely wrong. The pathfinder was exactly as we set it down. It was always going to deal with single people at the beginning and we have rolled it out as we said we would. I stand by the fact that this pathfinder is the right thing to do. I introduced it back in 2011 and it will help us enormously to develop the IT. That is the way we are doing it and that is the way we will do it.
Having visited the pathfinders with the Select Committee on Work and Pensions, I can reassure my right hon. Friend that both the claimants and the front-line staff were enthusiastic about universal credit and how it is working. Is my right hon. Friend also aware that the Select Committee commented that the Government are making significant progress in making work pay?
My hon. Friend is exactly right. All our reforms—reducing the workless numbers and ensuring that the economically inactive are going back to work, saving money for the Exchequer and for taxpayers—are in play. Every one has been opposed by the Opposition and we have had no answer about what they would do instead. As my right hon. Friend the Minister for the Cabinet Office and Paymaster General has said, they dance around on all the issues and the truth is that they have no policy. The welfare party is bankrupt.
Under the section of the report containing the key findings, paragraph 18 states:
“Throughout the programme, the Department has lacked a detailed view of how Universal Credit is meant to work.”
Will the Secretary of State explain how that happened? Does it not show that he lost control of the project from the very beginning?
The original plan to have an “Agile” process meant that by 2011 the plan would be formulated and could be delivered against. In 2011, I was concerned about the failure to deliver—that was meant to be part of the process—and that is why I instituted the changes in 2012. We will have that plan ready. It will be announced to Parliament, it will be stuck to and it will deliver in time and on budget, so the NAO is right and I fully agree with it.
We understand that the aim is to give support to the right people at the right time in the right way and to help make their lives better. Will my right hon. Friend remind us of the additional benefits of the reduction in administrative costs and in fraud and error?
The costs overall and the savings are enormous. The total benefits to individuals and in fraud and error will total up to perhaps £38 billion. The point is that those savings are real savings. Yes, there is a problem about some wasted money in this programme that is quite unacceptable, but set against the big savings the key point is that it is a big and important programme.
The good thing about the pathfinder is that it has allowed us to test the RTI system. The hon. Lady will find, if she wants to visit any of the sites, that we are getting a phenomenally good feed from the RTI about the payroll. In some areas, they have already discovered that some people claiming jobseeker’s allowance are earning a salary at the same time. They have been able to deal with that, hugely due to the fact that the RTI system is working. I recall that many Opposition Members said that the RTI software would not work, but they were wrong.
Order. I am afraid that that is not a question for the Secretary of State. I decide whether an urgent question should be granted or not. I am fully conscious of what other parts of the House are doing and the judgment I have to make is whether the matter should be aired on the Floor of the House today. The answer is yes. That, to be honest, is the end of the matter.
I was delighted to hear my right hon. Friend say that he thought that the cultural change afforded by the introduction of universal credit was even more important than the financial savings that it will offer. In my part of the world in the black country, we have a higher than average rate of workless households. Will he talk to his officials about ensuring that some of the pathfinder pilots that he has in mind take place in the black country?
As the Secretary of State considers the operation of universal credit, will he look at the effect on people living in areas with high private sector rental costs who find that a wholly disproportionate amount of their benefit goes on such rents, rather than keeping body and soul together? We need not only to look at that, but to control private sector rents.
I believe that universal credit will help in that regard because the idea is that, as people go back to work, they will be better off for every hour they work than they were on benefits, which should make them more able to afford to live. The vast majority of benefits under universal credit will go to the bottom 20% of earners, so it should be a net benefit to the poorest in society.
May I urge my right hon. Friend to reject the shadow Secretary of State’s offer of cross-party talks, not only because of Labour’s failure on IT, benefit fraud and the tax credits system, but because Labour Members fundamentally do not believe in the welfare reform that this country desperately needs?
I will not reject the offer of Mr Byrne because I am an optimist. On the road to Damascus, there is always a chance that such an individual may change his view and realise that what we are doing is the right thing. I will do my level best to persuade him that everything that he has done so far is wrong and that there is a better way—marked “coalition”.
The Secretary of State’s problem is that we have been here before. We were told on every occasion that everything was fine and that “Agile” programming—whatever that is—would solve all the IT problems, but now we find that “Agile” was all wrong. The problem for the Secretary of State is that he still wants to deliver this by 2017, despite the fact that he is already way behind his original timetable for delivery by then. If he accepts that there are all these problems and statements such as it is
“unlikely that Universal Credit will be…simple or cheap to administer”,
would it not be better to delay the final implementation date?
The hon. Lady is right and I agree that we have been here before: the national health IT collapse costing £13 billion; the Child Support Agency failure and £120 million crash programme; and a £7.1 billion IT project that failed. The difference is that, unlike those programmes under the Labour Government, I acted to ensure that changes were made early to deliver the programme on time and on budget.
Order. I appreciate that there is much interest, but 25 Members have questioned the Secretary of State and we must move on—[Hon. Members: “Aw.”] The House is used to a situation in which virtually everyone gets in, because that is the way I like to play it—I must say, especially to new Members, that it did not used to be like that at all—and it usually is that way, but I have to make a judgment about the time available, and we have the business question, a statement on legal aid and debates under the auspices of the Backbench Business Committee to follow. These matters can be rehearsed again in the future—and doubtless they will be.