Shake-up of welfare ‘in crisis’ says new report

The Government’s flagship welfare reform is in crisis as a damning new report reveals how it has been beset by huge delays, failing IT systems, poor leadership and wasted money.
Work and Pensions Secretary Iain Duncan SmithWork and Pensions Secretary Iain Duncan Smith
Work and Pensions Secretary Iain Duncan Smith

A scathing report published this morning by the independent National Audit Office (NAO) has concluded that Work and Pensions Minister Iain Duncan Smith’s much-heralded Universal Credit system was “overly-ambitious” and has not provided value for money for the taxpayer.

Universal Credit is due to replace means-tested benefits by 2017, with the department estimating it will save £38bn by 2023. The system is also designed to encourage people to take up work, by ensuring that they will always be better off having a job.

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Today’s report, however, reveals pilots have been scaled back and delayed, and that a former Olympics executive was drafted in earlier this year to “reset” the programme. The NAO said the Government had not achieved “value for money” on its spending up to the end of April.

Of the £303m spent on IT, £34m had been written off and the systems still had “limited functionality”.

NAO head Amyas Morse said: “The department’s plans for Universal Credit were driven by an ambitious timescale.

“The relatively high risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance.”

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Public Accounts Committee chair Margaret Hodge said: “Confusion and poor management at the highest levels have already resulted in delays and at least £34m wasted on developing IT.

“If the department doesn’t get its act together, we could be on course for yet another catastrophic government IT failure.”

A DWP spokesman pointed out that the assessment did not cover progress that had been made since April.

“Universal Credit is a major and complex reform that will transform the welfare state and we are committed to delivering it on time and within budget,” he said.

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“The report does not cover the significant developments we’ve made since April including the go-live in Greater Manchester, our progress on the IT challenge, the latest plans for expansion from October, or the fact that we brought in two of the country’s leading project management experts to lead Universal Credit.

“Under this new leadership we are making real progress.”