Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698925135832.pdf (United Kingdom)
OFFICIAL SENSITIVE UCPB271020 – Paper No.

BTL 02 6.

The majority of the financial impact of Covid-19 has been reflected within operational running costs.

This can be seen in the 2020/21 running costs projections (see Annex 1).

However, there will be a further financial impact on UC as a consequence of Covid-19, although these are currently impossible to quantify.

7.
7.

For example, prior to Covid-19, the Department forecasted Managed Migration (MM) to be complete by September 2024, with the final stage of delivery clearing migration of 100k cases a month.

However, the Harrogate pilot for MtUC has been paused due to the Covid-19, therefore slowing down short term MM to UC.

No decision has yet been made on the future of the programme.

8.

Similarly, the Government has currently increased Standard Allowance (SA) by £20 until 31 March 2021.
The Secretary of State has written to the Prime Minister proposing permanent solutions in alignment with poverty alleviation although no decision has yet been taken.

9.

A permanent change in the SA in UC may have a positive impact on the Natural Migration (NM) onto UC, thereby increasing the speed of uptake of UC from legacy benefits.

This may counteract the slow down caused by the pause of the MtUC programme noted above, although it is currently impossible to quantify.

Increased Controls 10.


Having reflected on the increased Programme costs reported by NAO, and the inherent uncertainties on the future delivery timescales of UC, we have introduced a number of new elements to our control environment.

11.
11.

The Change Portfolio Board (August 2020), approved three areas where stronger controls and improved practice have been applied to DWP Change Programmes: a) Robust costing of decisions: Changes to the programme need to be impacted to the Full Business Case, including sensitivity analysis to volume / variable factors and across all future years of the life of the programme (not just the future two/three years).

The cost driver information should be documented and retained.
Approvals should be consistent with the Department’s delegation levels; b) Develop and apply controls for financial variation from the approved business case; and c) All Programmes are recommended to update their whole life costs twice per year (Spring and Autumn) and if required, to update the published business case.

The forecast will be approved at the Programme Board before it is updated in Hyperion.

12.

The UC Programme are implementing these controls.


A new dashboard product and the refreshed Finance Programme Board Report have been implemented to report the whole life position of the programme.

Programme Board will be fully sighted by sign off of forecast updates.

2 of 4 OFFICIAL SENSITIVE UCPB271020 – Paper No.

BTL 02 Financial Impact 13.


Whilst there remains so much uncertainty in the UC and legacy benefit environment, our best working assumption is that DWP remains on track with the previous MtUC plans.

Our financial forecast therefore remains consistent with the one shared with NAO (with the addition of 2025/26, 2026/27, depreciation and 2020/21 Covid-19 impact).

14.
14.

When CSR20 has concluded and we have some certainty on Ministerial decisions, the agreed demand volumes will be modelled (internally and externally with HMRC and LA).

The forecast refresh will then be subject to the programme governance prior to being included in the programme full life cost.

Summary 15.

This paper is sighting board members on the current whole life forecast position, actions being taken to strengthen the financial framework and the current uncertainties the programme face.
Decision / Recommendation Not applicable – for information only.

3 of 4 Annex 1 – Full Life Programme – Financial Case Costs OFFICIAL SENSITIVE UCPB271020 – Paper No.
BTL 02 Pre 19/20 20/21 Total Costs £m - based on Autumn 19 volumes 25/26 23/24 21/22 24/25 22/23 Programme Mgt Move to UC Investment Running Costs Savings Depreciation Total 1,441 45 1,486 1,645 (842) 266 2,554 147 30 176 864 (670) 13 384 151 22 173 1,383 (700) 13 869 150 69 220 844 (700) 16 380 157 166 323 906 (773) 24 480 142 192 334 1,030 (840) 23 547 61 79 139 1,065 (954) 23 273 24 5 29 1,075 (968) 23 159 26/27 Total FBC 22 1 23 1,095 (923) 20 215 2,294 609 2,903 9,906 (7,370) 421 5,861 1,771 291 2,062 10,655 (9,806) 357 3,268 Note: The current forecast of £5.8bn compares to the FBC Financial case £3.2bn.
This includes depreciation, inflation and runs through the whole life of the programme.
Annex 2 – NAO Report FBC - Economic Case Costs FBC Economic Case (restated) Programme Mgt Move to UC Investment Running Costs Savings Total Pre 1,382 69 1,450 1,747 (842) 2,356 Total Costs £m - based on post Autumn 17 volumes 24/25 22/23 21/22 20/21 23/24 19/20 Total 147 56 203 851 (770) 284 94 79 173 1,094 (977) 290 93 70 163 1,099 (1,085) 177 20 3 23 1,139 (1,089) 73 2 - 2 1,154 (1,101) 55 2 - 2 1,139 (1,139) 1 1,739 276 2,016 8,223 (7,003) 3,236 Note: This was a restated economic case which formed the basis of the NAO questions and excludes depreciation, includes embedded inflation & ran to 2024/25, not the full life of the programme.
This is not to be confused with the £3.2bn FBC Financial Case in Annex 1 above.

Annex 3 – Extract from NAO Report Topic Programme Timetable Programme implementation costs Programme running costs Total Programme Costs FBC 2024-25 MM complete Mar 2022 MM complete Sept 2024 Current forecast 2024-25 £2.0bn £1.2bn £3.2bn £2.9bn £1.8bn £4.6bn 4 of 4