Welfare Reform Bill

My Lords, before I respond to the amendment, I want to deal with the issues about what universal credit does and some of its impacts because the noble Lord, Lord Knight, implied that it has a perverse impact on poverty when exactly the opposite is the case. The IFS noted that it is progressive and pointed out that the bottom two quintiles gain £11 and £10 per week respectively and that 80 per cent of the gainers are from those bottom two quintiles. In fact, its estimate is that child poverty will reduce by rather more than our estimate. Our estimate is 350,000 when the system is in; its estimate was 450,000. I do not want to go over the economic stuff, otherwise we will stay here all day. I want to deal with this issue. I can assure noble Lords that as part of the work to build the universal credit system we are undertaking a level of testing fully commensurate with a programme of this scale. Prior to the main go-live date in October 2013, there will be significant levels of testing specifically focused on ensuring that the various components work effectively together, including realistic business testing. For this project, we are adopting the Agile method of development, which creates and tests working IT components at an early stage. We are actually testing them now, and I shall show them to Members who can attend on 3 November. Instead of building very big sections of the IT system slowly, we are building small pieces more quickly. We are confident that this approach will provide a stable and fully proven system that will allow us to successfully deliver universal credit. I assure my noble friend Lord Boswell that the system will be sized to cater for the worst case volumes and will be robustly tested for performance at peak times. But I do not believe that it is necessary to introduce the additional step of a formal report, with the additional cost to the taxpayer and inherent time delays this would entail. Unusually, I myself sit on the programme board for this project, so I am kept absolutely up to date with developments. I am working very closely with HMRC on this and have regular meetings, so I have direct access to the officials who are responsible for the HMRC side as well as the DWP side. I commit here to keeping Parliament fully updated on this process, through informal meetings and, when there are major advances to report, Written Ministerial Statements. Clearly the first example of that is the presentation that I have arranged for all interested Peers and parliamentarians on the details of the system that is being built, which will be held on 3 November at 11.30 in the morning, next door in Room 3A. I hope that that will demonstrate how robust the Agile techniques that we are using are. I am sure that this amendment may have been triggered in part by reports that universal credit has been included on a Treasury risk register, or so-called risk register. Let me say again for the record that the universal credit programme is part of the Government's Major Projects Portfolio, encompassing 200 projects with a total value in excess of £300 billion. It is only to be expected that a project of this value and size should be subject to assurance reviews and governance procedures; nothing untoward is implied by the universal credit's inclusion on this list. I remind noble Lords that when the Major Projects Authority first looked at this project it reported a high level of confidence in what we were doing.