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Government writes off £34m Universal Credit IT spend

Benefit payment reforms blasted in new report by National Audit Office.

Money

IT problems forced the Government to write-off 34 million in funding for the rollout of its Universal Credit welfare payment reforms, it has emerged.

Universal Credit is the name given to the Department for Work and Pensions' (DWP) welfare payment reforms, and is being ushered in to replace six means-tested benefits.

Its aim is to simplify the benefits claiming process for people of working age, and in turn reduce the welfare system's administration costs, as well as the risk of erroneous overpayments being made.

Recent DWP estimates suggest the system could result in a "net benefit" of 38 billion by 2022-2023, against an initial outlay of 2.4 billion to implement the programme up to April 2023.

At the moment, around 425 million has been spent on the programme, with more than 300 million of this being invested in the design and development of new IT systems.

As such, around 188 million has been spent on software applications, 10 million on providing real-time information, and 6 million on a new case management module.

A further 31 million has been spent on licensing, 26 million on support from suppliers and 50 million on new hardware, telephony equipment and legacy system updates.

However, it has since emerged that the Department was forced to write-off 34 million of this IT spend in May 2013, according to a report from the National Audit Office (NAO).

As a result, the Government spending watchdog has slammed the programme, claiming it does not represent good value for money, and fears it could miss its 2017 deployment deadline.

Amyas Morse, head of the NAO, said the programme's implementation has been let down by "weak management, ineffective control and poor governance," in a statement.

"The Department's plans for Universal Credit were driven by an ambitious timescale, and this led to the adoption of a systems development approach new to the Department. The relatively high risk trajectory was not, however, matched by an appropriate management approach," Morse said.

That being said, Morse conceded the project could still go on to deliver on its aims, as long as the people in charge learn from their initial mistakes.

"Universal credit could well go on to achieve considerable benefits, if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out," Morse added.

The Universal Credit system is currently being piloted in four areas, but the scope of these preliminary projects has been smaller than initially intended.

"By the end of July, the Department had expanded the pathfinder [pilots] to four sites and had taken around 1,000 new claims," the report states.

"The scope of the pathfinder is narrower than originally planned, covers only the simplest new claims and includes limited IT functionality.

"Some processes require intervention by staff, limiting the scalability of the pathfinder model without further IT investment," it explained.

In an interview on BBC News earlier today, Work and Pensions secretary Iain Duncan Smith defended the project, and insisted it would be delivered on time and within budget.

"There are plenty of projects in the past [under the previous Government] that went into chaos and collapsed and had to be cancelled.

"I bought in outside people and lost faith in the ability of the civil servants to manage this programme, so we brought in people from outside to ensure this programme could be delivered within the scope of how it was planned, and delivered within budget."

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