Lessons from Texas for Implementing the Universal Credit

4 May 2012

Reform roundtable seminar on the Universal Credit on Thursday 3 May 2012. Introduced by Andrew Selous MP.

It is hard to overstate the importance of the Universal Credit. The proposal will directly impact on the lives of millions of the UK’s most vulnerable households and, at a static cost of around £2 billion, have a real impact on the welfare budget. Up to this point much of the focus and debate on this programme has been on broader design issues, such as the impact on incentives to work and poverty, how to treat childcare and housing assistance, and transitional assistance and passported benefits.

Yet with the migration of families to the new system scheduled to begin in October 2013 issues of implementation must come into sharper focus. As Michael Lipsky argued public policies are not just developed in legislatures or the highest levels of the civil service but in crowded offices and daily encounters of “street level” workers. Often the practical challenges of implementation determine the success or otherwise of a programme.

With this in mind Reform held a roundtable event on possible lessons for introducing Universal Credit from similar reforms in the State of Texas. Andrew Selous MP helped set the scene by outlining the Government’s approach to implementing the Universal Credit and a member of the consortia that implemented the Texan project outlined their experiences. The event was held under the Chatham House rule.

Texas set out to create an “integrated eligibility” process for its social services programmes in 2005. The underlying philosophy was similar to the Universal Credit. By combining the application process for a number of programmes decisions could be made in a simpler and quicker way. Yet this ambitious project made a number of early mistakes and the pilot programme was suspended. The contract for the project was withdrawn and one of the members of the original consortia, MAXIMUS, was awarded a modified contract and required to turn the project around. They did this and integrated eligibility has now been implemented across the whole State.

Potential lessons from the Texan experience discussed at the event included:

Perform a detailed process analysis before selecting the delivery model, training methods, technology and staffing levels. The technology must be designed to support the business process. Robust forecasts of customer volumes and testing of assumptions around the use of different channels are required.

Have performance metrics and reporting information in place. The right monitoring systems and reports must be developed (this can be surprisingly difficult) and there needs to be strong managerial accountability and legislative oversight. Good governance and transparent processes are essential.

Focus on operations as well as technology and make sure there is direct communication with operators. There needs to be a strong focus on people operating the system. Communication between front line staff and technology staff must not break down.

Manage change efficiently within the delivery organisations. Training and onsite support is important and once people began to use the new system in Texas they were required to stick with it, rather than returning to the old.

Do not promise savings or change until the proof of concept has delivered reliable metrics. Savings promised often depend on the programme being delivered successfully; if delivery is not successful then savings may not eventuate. As well as the benefits of automation, there may be costs associated with the loss of “face time.”

Addressing the issues above would be a challenge even in the best of times. Yet the current environment poses extra difficulty. The Universal Credit must be delivered in a period when public money is tight, other important welfare reforms are taking place and concern is being expressed over labour market outcomes. The timeframe for the implementation of the Universal Credit is very tight and the Public Accounts Committee has already expressed concern over the “oversight of the interaction of benefits that are based on means-testing.”

Yet the lunch also highlighted the broad support for the goals and objectives of the Universal Credit. The policy window is open. A simpler system that works better for recipients is a valuable prize. This makes a focus on delivery issues all the more important. The Universal Credit will not work unless the delivery is right, and this requires a constructive and honest debate on the challenges of implementation.



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