Universal Credit blasted again by MPs as millions lost

Thu, 07/11/2013 - 13:28 -- nick

The government's Universal Credit system has been blasted again by MPs.

The Public Accounts Committee (PAC) within the House of Commons called the scheme "extraordinarily poor" and said oversight by the Department for Work and Pensions (DWP) had been "alarmingly weak".

The Committee believed that much of the £425 million spent to date has been lost forever and will need to be written off.

Universal Credit, the brainchild of DWP head Iain Duncan Smith, is an attempt to simplify the benefits system by rolling together in-work and out-of-work benefits, ensuring work pays and claims can be managed online.

But the IT system has proved to be a money pit, swallowing hundreds of millions of pounds and still not working as it should.

The MPs have slated the DWP, saying the lack of oversight by the department had allowed the team developing it to become isolated and develop a "fortress mentality".

Such little control of spending was in place that even now the DWP does not know exactly how much money has been lost.

It is relying on those external companies that received the money to tell it how much they spent, a shocking failure open to abuse.

The PAC also accused the department of promoting a culture "which promoted only the telling of "good news"", including suppressing an internal report which was critical of the scheme.

The current pilot project is not testing the system properly, only dealing with small numbers of claimants and the simplest claims, and needs to expand greatly if it is to be valuable.

This means that a far longer pilot is needed to ensure Universal Credit is ready to be used by all.

Perhaps most troubling, the PAC is "not yet convinced that the Department is in a position to present revised plans for approval by ministers, the Cabinet Office and HM Treasury that resolve the problems".

Margaret Hodge, the Chair of PAC, called Universal Credit "an unmitigated disaster of epic proportions".

The DWP responded by saying:

"This report doesn’t take into account our new leadership team, or our progress on delivery. We have already taken comprehensive action including strengthening governance, supplier management and financial controls.

"Since we have last spoken to the PAC, we have also launched Universal Credit in Hammersmith, which will expand to further areas later this month and the Claimant Commitment is rolling out to Jobcentres across the country.

"We don’t recognise the write off figure quoted by the committee and expect this to be substantially less. The head of Universal Credit Howard Shiplee has been clear that there is real potential to use much of the existing IT. We will announce our plans for the next phase of UC delivery shortly."

The lack of confidence of the PAC in the DWP's ability to present reasonable plans suggests this announcement is unlikely to improve the scheme.

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