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Iain Duncan Smith's welfare reform is hanging in the balance

1 June 2013

9:00 AM

1 June 2013

9:00 AM

‘The Republicans are the party that says government doesn’t work and then they get elected and prove it,’ wrote P.J. O’Rourke in 1991. He might well say the same thing about the Conservatives in 2013. The much-trumpeted reform of the benefit system, the Universal Credit scheme, had a warning sign slapped on it last week by the Major Projects Authority (MPA). This was a bitter blow for Tories who want Universal Credit to succeed, not just because it is right, but because if it fails, it will discourage future governments from taking on important far-reaching reforms.

It is too early to say whether Universal Credit (which rolls six benefits into one monthly payment) will sink or swim. Its first pilots launched in April, and Whitehall insiders insist that the ‘amber/red’ warning from the MPA is hardly a surprise when you consider quite how ambitious this reform is. It was always unlikely to get a green light.

But there is an additional question about whether the government machine really is capable of delivering such ambitious policies at the moment. If Universal Credit is a flop, then it will prove our current Whitehall set-up is failing. But if it succeeds, it will be no thanks to the civil service either.

Three years into the coalition, every minister bears scars on their back from trying to push through even the smallest of changes. Michael Gove owes his success in reforming schools not to the alacrity shown by his department in signing up to his agenda, but to a superstructure of advisers that he brought in to operate above the existing officials. At the other end of the scale, Grant Shapps recently succeeded, after an impressive battle, in persuading his officials to ‘retweet’ some of his own Twitter comments about government programmes. The wheels of the Whitehall machine need plenty of oil before they start turning.


The Work and Pensions department is famed in Westminster for having particularly slow and creaky wheels. One loyal Cabinet colleague of Iain Duncan Smith says the Secretary of State was ‘extremely badly let down’ by his officials on the ‘shockingly bad’ set-up of Universal Credit.

In December the department’s chief information officer, Philip Langsdale, died suddenly. David Pitchford, who runs the Major Projects Authority, took over the Credit’s implementation for three months. Duncan Smith could have relied on his permanent secretary Robert Devereux, but he is rumoured to be on his way out, described by one Whitehall source as a ‘policy wonk, not a delivery person’.

Pitchford, by contrast, has worked as chief executive on a number of big projects, including the 2006 Melbourne Commonwealth Games. His time in the department was vital for the welfare reform programme. It meant the pilots could go ahead this April, albeit in a less ambitious form than originally planned. So once again, it takes outsiders, not civil servants, to implement reform.

Other ministers have developed their own strategies for coping with the civil service. One found himself overwhelmed by pre-meeting briefings given by officials who assumed that a minister would need someone to explain to them what a policy was before making a decision about it. He wrestled back control of his diary from officials, and banned the briefings. ‘The system works to control you, and you have to control the system,’ says this victorious minister.

In some cases, the problem is as much that the officials don’t realise that they are ill equipped, explains one senior minister. In other cases, it’s that the turnover of civil servants means no one sees the project through till the end. ‘We have got to end the situation where no one feels responsible for the final outcome of a major project,’ says Bernard Jenkin, chair of the Public Administration select committee, which scrutinises Whitehall. ‘In the private sector, it is not uncommon for individuals to make a 20-year project the be-all-and-end-all of their entire career. Compare that to the civil service.’

Some suspect that when a secretary of state sets out on a big project, permanent secretaries over-promise and fail to highlight problems. Ironically, the MPA report that caused such a fuss is also an example of good civil service reform: it means that everybody involved can confess when things aren’t going according to plan, rather than cover up. Others feel the struggle over Duncan Smith’s reforms is a sign that there needs to be a political upper tier overseeing them, either through political appointments to the civil service, or more special advisers.

One final reason for the precarious state of Universal Credit is that there has been distinct reluctance on the part of those at the top to support it. The Spectator reported in September that Cabinet Secretary Sir Jeremy Heywood was letting it be known that he was ‘sceptical’ about Duncan Smith’s mission. He wasn’t the only one. Duncan Smith has had to do battle with George Osborne as well, both over the extra cost of the project and the values underpinning it. In his biography of the Chancellor, Janan Ganesh reported that Osborne was suspicious that the Christian sense of mission behind the plan might blind those advocating it to whether it would really work. But those close to the Work and Pensions Secretary believe he has since managed to make the case to the Treasury for this reform. ‘Iain has taken George with him and we do have the support of George now on universal credit,’ says a source close to the minister. Indeed, Osborne seemed happy to praise the Credit in a speech on welfare in April.

Ministers were at one stage wary of talking about Universal Credit, but perhaps it is gaining a few more friends now. It needs them. The struggle so far might have been to persuade colleagues and officials that this is a reform worth fighting for. But now the fighting has begun, and the project is still expected to expand to new claimants in October. And that will need the Whitehall machine to fire on all cylinders, or O’Rourke will be right all over again.


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