'£34m wasted' on welfare reform

Government attempts to set up its flagship Universal Credit scheme have not achieved "value for money" and have already wasted £34 million, according to a damning report by the National Audit Office.

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Labour: Universal Credit a 'Titanic-sized IT disaster'

Labour's Shadow work and pensions secretary Liam Byrne has described the Universal Credit scheme as a "Titanic-sized IT disaster" and accused the Work Secretary Iain Duncan Smith of a cover up.

Mr Duncan Smith swore blind this benefit shake-up was fine.

Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds.

– Liam Byrne, Shadow work and pensions secretary

Liam Byrne will speak about this on Daybreak later this morning

Universal Credit scheme suffers from 'poor governance'

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. Instead, the programme suffered from weak management, ineffective control and poor governance.

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.

– Amyas Morse, head of National Audit Office


Hodge: No confidence that Universal Credit will deliver

Public Accounts Committee chairwoman Margaret Hodge has said that today's report shows that the Department for Work and Pensions has embarked on a scheme "with little idea as to how it was actually going to work".

Confusion and poor management at the highest levels have already resulted in delays and at least £34 million 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.

This damning indictment from the NAO [National Audit Office] gives me no confidence that we will see the £38 billion of predicted benefits between 2010-11 and 2022-23.

Vulnerable benefit claimants need a secure system they can rely on.

– margaret hodge, chairwoman, public accounts committee

Main conclusions of NAO report on Universal Credit

These are the main conclusions of the National Audit Office (NAO) report on the early progress of the £2.4 billion Universal Credit scheme, which is due to be rolled out nationally by 2017:

  • Department for Work and Pensions "took risks" in order to meet ambitious targets
  • Scheme has not achieved value for money with at least £34m of the £425m spent so far having been "written off"
  • Timescale for national roll out is no longer feasible without increasing risks
  • Programme has suffered from "weak management, ineffective control and poor governance"
  • Current IT system for processing claims has "limited functionality"

What is Universal Credit?

Universal Credit the government's flagship scheme for reforming the welfare system and attempting to ensure that people are always better off in work than on benefits.

The scheme is designed to make welfare simpler by combining the following benefits into a single monthly payment:

  • Income-based Jobseeker’s Allowance
  • Income-related Employment and Support Allowance
  • Income Support
  • Child Tax Credits
  • Working Tax Credits
  • Housing Benefit

Work Secretary Iain Duncan-Smith has said the scheme will save the government £38 billion by 2023, although it has also come in for criticism from MPs and campaigners.

Read a longer definition here

Report: Universal Credit scheme has wasted £34m

Government attempts to set up its flagship Universal Credit scheme have not achieved "value for money" and have already wasted £34 million, according to a critical report released today.

The Department for Work and Pensions in Whitehall, London Credit: Kirsty Wigglesworth/PA Wire

National Audit Office (NAO) said the project championed by Work and Pensions Secretary Iain Duncan Smith had been beset by "weak management, ineffective control and poor governance".

The auditors found that the IT system that was being used to process the benefit claims could not identify potentially fraudulent ones, leading to a possible delay in its delivery by 2017.

Universal Credit is due to replace six separate means-tested benefits. The Department for Work and Pensions has estimated it would save £38 billion in administration, fraud and error costs by 2023.


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