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September 25, 2011


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Universal Credit has more than an IT problem. It involves central govt taking over (in some fashion) rebates operated by Local Authorities now - Housing Benefit and Council Tax Benefit. That's going to be a very big problem to chew.

It is the accumulation of withrawals of multiple independent credits/benefits that leads to the edge case 90+% Marginal Deduction Rate Cameron and the press sometimes highlight. To get round this you have to merge the systems so a top 70% or so Marginal Deduction Rate can be implemented.

So the Universal Credit in principle is a good idea, but implementing it another matter. I'm sure Brown&co considered this when introducing Tax Credits, but wisely decided this was too big a problem to tackle at that time.


IT itself isn't the problem - hundreds of multinational corporations use it every day with varying amounts of success. The problem lies in the procurement and project management of it.

If Universal Credit is a failure, it's low-paid workers who'll suffer. It mustn't be allowed to fail.

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