UK government overspends on IT welfare payments system

The UK’s Department for Work and Pensions [DWP] has been criticised for overspending on an IT project that is designed to reform the way welfare payments are handed out and could be completely overhauled.

The National Audit Office [NAO] called the Universal Credit plan “overly ambitious in both the timetable and scope of the programme” with £34 million of taxpayer money already written off on the IT portion of the project.

“The Department took risks to try to meet the short timescale and used a new project management approach [agile] which it had never before used on a programme of this size and complexity,” the NAO report stated.

“It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility. Given the tight timescale, unfamiliar project management approach and lack of a detailed plan, it was critical that the Department should have good progress information and effective controls. In practice the Department did not have any adequate measures of progress,” said the same NAO report.

The DWP’s Universal Credit project is designed to automate benefit payments and tax credits for the 12 million people that receive them. Reports indicate the DWP spent £303 million on contracts for IT systems given to them by Hewlett Packard, IBM, Accenture and BT. Accenture is understood to have been the main beneficiary winning contracts worth around £110 million.

NAO’s report also claims the IT system is not capable of identifying fraudulent claims made through the welfare system and the estimated spending on the project has mushroomed from £396 million in May 2011 to £637 million now.

The report follows Universal Credit’s new project director Howard Shiplee stating the project needs a thorough overhaul with the software requiring a complete redesign. After two years in development, systems to identifying fraudulent claims that are “incredibly critical” to the project are yet to be completed and important calculator software has only just been ordered from Accenture.

Iain Duncan-Smith, the Cabinet Minister that leads the DWP, has stated the project is on track and will be delivered within budget by 2017 and the “new leadership” is helping them to make “real progress” with Universal Credit.

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