Much of the existing software developed for the Universal Credit system is to be discarded and a new system will be developed ready for full live running by the end of 2017. This latest development will result in writing off a further £6.m bringing the total written off so far to £40.1m.
The new system being developed will use open source to store and access data and it is likely to be a cloud-based service. It will be cheaper to build and operate, with reduced licence fees.
This new approach emerged from a project review paper presented to ministers by the Universal Credit programm director, Harold Shiplee. The report presented options for taking the work forward by continuing to fix the existing system, or by going back to the drawing board and devising a web-based system, but this would involve writing off £119m spent on development to date.
The new programme design incorporates both options with the development of a digital approach while at the same time using the existing system to develop processes and procedures. This ensures that learning from the Pathfinder system will be incorporated into the new system. The Pathfinder will function alongside development of the digital approach and as it continues to reveal the unexpected, the learning will be fed to the system developers.
The Pathfinder has become a prototype with value for learning and training and like all prototypes it has a limited lifespan. Because the use of the prototype will end in three years, the residual £91m development costs will be written off over five years, starting from the project launch, rather than the standard fifteen years.
The objective of universal credit to roll six benefits into one and dispense £70 billion of benefit spending each year, remains unchanged. The economic benefit over 10 years is estimated at £38 billion.
The Pathfinder, which started in Greater Manchester in April, will continue to expand and cover 10 areas by April 2014. By the end of next year, Universal Credit will start to expand to cover more of the north-west and expansion will continue for the following two years. By 2017 all but 700,000 claimants will be able to use the system. This revised timescale represents a delay of two years compared to original projections.