DWP partners with IBM for benefits merger

The Department for Work and Pensions (DWP) has signed a nearly £1m deal with digital design specialists from IBM to support plans to merge Housing Benefit and Pension Credit. This initiative aims to unify these benefits, allowing pension-age recipients to claim a single, streamlined benefit. The merger plan, first outlined in 2011 by the then coalition government, has faced multiple delays over the years. However, the new Labour administration, upon taking power this summer, announced its intention to expedite the merger and consolidate the administration of Pension Credit and Housing Benefit as quickly as operationally possible. To support this digital unification, the DWP entered into an initial four-month engagement with IBM on 7 November. IBM’s iX unit, which specialises in online customer experience, will work with the department through a discovery procedure to explore the best strategic solution for bringing together the administration of Housing Benefit and Pension Credit. The contract outlines that IBM iX will offer “digital transformation – strategy and experience design services” to the DWP. According to service specification documents published on GOV.UK, the engagement will start by collaborating with key stakeholders to understand the desired scope and outcomes.

Benefits merger streamlining government services

This process will involve working directly with customers and employees to create a comprehensive map of the services offered. Highly-skilled service design practitioners will lead these activities, delivering outputs such as insights, service blueprints, outcome measures, and prioritised enhancement backlogs. During the initial four-month period, DWP will spend £479,340 on IBM’s services. If the department opts for a 12-week extension, the spending could rise by an additional £478,800, bringing the total potential spending to nearly £960,000 by May 2025. Housing Benefit is currently being phased out and largely replaced by Universal Credit. Only pension-age claimants and those living in supported, sheltered, or temporary housing can still apply for Housing Benefit. The government hopes that merging the benefits will boost uptake of Pension Credit, as ministers claim many eligible claimants are missing out on an average of £3,900 per year. This merger aims not only to simplify the process for claimants but also to ensure that more eligible individuals receive the benefits to which they are entitled.