Testing of Universal Credit, due to start later this month, has been scaled back from four to one location. This follows an earlier announcement that the testing phase will be restricted to a small number of simple Jobseekers Allowance claims.

This latest announcement of delay adds to the concerns in Whitehall that the programme is heading for disaster. Leadership changes in the last few months are a clear indication of Ministerial disquiet at the way the programme has been handled. The latest development which involves deferring testing in three areas until July shows that there is so little confidence in the system that it is necessary to focus all resources in one area.

It has been suggested that another reason for reducing the testing to one area is that, initially, much of the processing will be done manually using spreadsheets.

The latest implementation plan provides for national delivery to start in October 2013, with six monthly increments. However this plan will need to be revised because Universal Credit calculations depend on salary data from HMRC’s new PAYE Real Time Information system which requires firms to provide PAYE data on or before each employee payment. Implementation of this system has been deferred from April to October. This means that testing Universal Credit cannot start until the HMRC system is up and running.

If the original six month testing plan was maintained, this would mean that national delivery would be deferred to April 2014. A delay on this scale is in line with advice given to Councils that the impact of Universal Credit in 2013/14 will be slight.

Universal Credit will simplify the benefits system, improve work incentives and reduce fraud and error. It will replace income-based Jobseeker’s Allowance; income-related Employment and Support Allowance; Income Support; Child Tax Credits; Working Tax Credits and Housing Benefit. It will involve up to 6 million households and 19 million people.