Vague deadlines for the project mean it’s difficult to keep focus, says Milton Keynes Council.
Universal Credit is "storing up enormous problems" for the future, according to Labour, as councils struggle to prepare themselves for an uncertain roll-out schedule.
Shadow employment minister Stephen Timms blasted the Government's handling of the welfare reform IT system, accusing the Coalition of shrouding it in secrecy at a roundtable today.
He said: "The delivery plan has been completely implausible from the start. That is storing up enormous problems, some of which have already become apparent but some of them haven't.
"It's a very difficult change to deliver and that is the central failure, that [work and pensions minister Iain Duncan Smith] didn't understand [this]."
The benefits reform is meant to simplify six benefits systems into one but it has been plagued with IT problems from the start, so much that Duncan Smith was forced to reset the project in December 2013.
Instead of being on track for a countrywide roll out in October that year, the project was overhauled with a new IT system, and is unlikely to become available before 2017, according to the Department for Work and Pensions, which has not revealed any new targets for it.
Just 6,000 people across the UK were using Universal Credit as of February, and Milton Keynes Council today admitted staff were not prepared for the impact of the reform programme because of the uncertain timeframe.
Anne Jordan, welfare reform programme manager, told CBR: "It's something that's looming away over the horizon. It's difficult to keep the focus. People keep preparing for Universal Credit but it keeps going further away.
"We're gearing up for it now without any [set] budgets and trying to get people to manage their budgets, because you don't want to just be hit with Universal Credit, but we're doing it in a hazy environment really."
The accusations follow news that the National Audit Office (NAO) is set to launch a second investigation into the system come the autumn, as it tries to determine its value for money.
The Treasury has also not signed off on the project, drip feeding it money instead as it reaches targets.
A DWP spokeswoman previously told CBR: "Universal Credit is a vital reform that will ensure we have a welfare system that means people are better off in work than on benefits.
"The facts remain that Universal Credit is on track to roll out safely and securely against the plan set out last year. It is already transforming people's lives and is available in a growing number of areas, including 24 Jobcentres, and last week expanded to claims from couples.
"The Treasury has been fully engaged - they have approved the rollout plan and have approved all funding to date."
If Labour comes into power next spring the party will put a three-month pause on the project as it tries to determine what needs to improve.
In December 2013 NAO said that IT issues cost taxpayers £91m more than the £41m estimated by the DWP.
And in November the Public Accounts Committee estimated that the project has wasted much of the £425m then spent on it.