The battle of Whitehall

It’s the government’s flagship welfare reform, designed to streamline the benefits system while encouraging people back to work. And yet universal credit, championed by Iain Duncan Smith, the Work and Pensions Secretary, is mired in controversy and confusion. Already its introduction has been delayed—the planned national launch this spring was downgraded to a pilot and there is speculation that it may not meet its new deadline of 2017. Last week, the National Audit Office claimed that the setbacks to the £2.4bn project, which merges six benefits and tax credits into a single payment, have already cost the taxpayer £34m.

What may be most significant, however, is that universal credit has become the focus of deep and growing tension between politicians and their civil servants. It’s the fiercest battle in the war between ministers, who see Whitehall as “the enemy within,” and mandarins, who fear their political masters are trying to undermine their credibility and independence. Politicians are convinced that problems with the implementation of the policy are the fault of incompetent Sir Humphreys. Officials are equally convinced that this is a case study in political buck-passing. It’s a clash between high-minded political idealism and mandarin pragmatism, with wider implications for the running of an administration looking for transformatory ideas.

There is genuine bad blood between the two sides. A senior Tory says: “The Americans went to the moon in a decade. We are just trying to introduce some changes to the benefit system. Is it too much to ask the civil service to deliver that?” That is not how it is seen in Whitehall. According to one well-placed insider: “They are setting up the civil servants as the fall guys but it’s not their fault. The real problem is that ministers haven’t a clue how to manage these projects.”

As David Cameron begins to worry about the possible political fallout of a policy that is bound to have losers, Number 10 has sent in the hit squads to keep an eye on the civil servants. David Pitchford, Executive Director of the government’s Major Projects Authority, was parachuted into the Department for Work and Pensions to “reset” the introduction of universal credit. It is an indication of the lack of trust between ministers and mandarins that the Cabinet Office insisted he report not to the Permanent Secretary but to the Secretary of State. Then a team of hotshot “geeks” from the government’s Digital Service—young programmers in hoodies who are transforming Whitehall’s computer systems—were sent in to deal with the technological glitches that Downing Street fears could lead to another disaster.

The tension has gone right to the top. Some time ago, IDS was furious to find that Jeremy Heywood, the Cabinet Secretary, had been raising questions about universal credit. He thought it was “quite inappropriate” for the most senior civil servant to get involved. There have also been a number of run-ins between the DWP and the Treasury, which has always been more interested in saving money than souls. Welfare reforms prompted a row that ended in the Work and Pensions Secretary threatening to cut off a Treasury official’s balls. He is said to have been particularly frustrated by Nicholas Macpherson, the Chancellor’s Permanent Secretary, whom he believes is sceptical about universal credit because he helped create tax credits under Gordon Brown.

This is partly a clash of cultures. IDS is a man on a mission. He is convinced that universal credit—which he devised in opposition through his think tank, the Centre for Social Justice—has the power to “change lives.” For him it’s about morality rather than austerity—the aim is to make work pay by smoothing the path from benefits into a job. This is not just a technocratic reform of the sort favoured by Whitehall. According to one ally he has been “banging his head against official intransigence” that veers from lack of will to outright deception. It is no coincidence he has forged an unlikely alliance with Francis Maude, the Cabinet Office minister (his arch-enemy when he was Tory leader) who is evangelical about civil service reform.

The struggle now going on over universal credit is not just about the future of welfare, it’s also about the balance of power in Whitehall. There are implications for the future of the civil service, with ministers becoming ever more determined to improve performance and mandarins equally committed to resisting politicisation. Let’s hope the vulnerable people who depend on benefits do not get caught in the crossfire.