Auditors announce second Universal Credit IT system investigation

by Joe Curtis| 27 June 2014

National Audit Office says review will examine value for money.

The National Audit Office (NAO) is set to launch a second investigation into the Universal Credit welfare programme before Christmas, it has confirmed.

The review will focus on the Department for Work and Pensions' (DWP) progress in developing an IT system to support Universal Credit, a DWP initiative to streamline six benefit systems into one.

The report into "value for money" of the controversial welfare IT system is expected to come in late autumn, and follows an earlier review in September last year.

The last review from the watchdog criticised the Universal Credit IT system for lacking an agile approach, and its 2013/14 annual report into the DWP's accounts, released this week, said there was still "some uncertainty" over the total costs of developing the digital service.

The report added: "It is clear that the Department still has much to do to address all the concerns raised and to ensure it delivers value for money in its implementation of the Universal Credit programme.

"The Department is continuing to spend significant sums in developing the programme, as it both maintains and enhances the existing IT functionality, while simultaneously designing a new digital end-state to replace it.

"The Department will need to exert rigorous control over this expenditure, and ensure it uses the available funding effectively and does not need to impair further assets."

Last month Universal Credit received its own special "reset" category in the Major Projects Authority's annual report into Government schemes.

However, a spokeswoman for the DWP said this referred to the project getting an overhaul in December 2013 after it emerged it was unlikely to hit its original deadline of a 2017 rollout.

Universal Credit is currently deployed in 10 areas across the UK, according to the DWP, and, as of February (the latest available figures), 6,000 people were using it to claim.

The news comes in the same week that the NAO released a report estimating the cost of setting up an IT system to handle child maintenance payments has risen again to £352m.

The original cost estimate, in January 2011, was £149m, but the NAO says the overall price has jumped due to increased IT costs and time extensions, after rising initially to £275m in 2012.

The NAO report said: "The department went live without completing full testing of the systems and has experienced minor service disruptions. An internal audit report in early 2014 concluded that IT systems were not yet stable."

DWP disputed figures released this week by a thinktank showing that 86% of £1.7bn HP earned through public sector revenues last year came from a contract with the department.

The Institute for Government released the data with analysis firm Spend Network, but the DWP said the actual figure was closer to "several hundred million a year".

It comes at a time when the department has committed to increasing spend with SMBs to 25% of its overall IT expenditure.

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