Dire performance problems at Jobcentre Plus (JC+) are being caused by the government's commitment to cut staff numbers before IT-enabled procedural changes have had time to settle in, according to a leaked internal memo from JC+ chief executive Lesley Strathie.

Former minister for employment and welfare reform Margaret Hodge (reshuffled to another department last week) wrote to Strathie at the end of March expressing concern that last summer's debacle will recur, citing 'a large volume of correspondence' from fellow MPs highlighting problems with benefits processing.

The JC+ customer management system (CMS) is central to government plans to centralise benefits processing and cut headcount. But before the introduction of contingency measures last September a combination of staffing and IT issues were causing huge backlogs of benefits applicants unable to get through to JC+. In August one regional call centre only answered eight per cent of more than 150,000 incoming calls. Some claimants were left waiting for two months for payments to start and in one area crisis loan applications doubled, putting even further pressure on processing capacity.

The contingency measures introduced to avert the crisis, including a reversion to clerical processing, have helped cut queues. But, despite a major software upgrade and reassurance from the Department for Work and Pensions (DWP) in January that all CMS-enabled contact centres would be back to the full computerised process by March, national figures seen by Computing expose significant on-going problems.

The latest data, for the last week in April, show that more than half of all attempts to automatically 'push' data from CMS to legacy processing systems still fail, more than half of callback deadlines are missed, and only 26 per cent of follow-up appointments for Jobseeker's Allowance are booked within the four-day target. The result is further delays for people claiming benefits, says JC+ sources.

Sources close to the technical programme claim the woeful performance is down to political and procedural issues rather than specific technology problems.

Strathie's reply to the minister also points the finger at political targets. An equivalent, successful, centralisation programme in the Pension Service benefited from a sufficiently 'favourable financial climate' to allow new centres to be run in parallel with the old system to avoid difficulties, she says.

Under the Treasury-led Efficiency Review DWP is committed to reducing staff numbers by 40,000 by 2007/8 and around half of the cuts have already been made. The result is not enough staff, sufficiently trained, to cope with the upheaval of the centralisation programme and the new way of working that it requires.

'In order to meet the government's [Efficiency Review] target we need to make headcount reductions before we have modernised our business processes,' says the letter.

Strathie's letter claims last year's problems will not recur because the centralisation programme, of which CMS is a key part, has been phased to avoid the summer. But she acknowledges that further contingency plans are being developed and there will be on-going problems in the months ahead.

In a report in March, the House of Commons Work and Pensions Committee described CMS service levels as suffering a 'catastrophic failure' last summer. The committee also recommended staff cuts be put on hold until the issues had been successfully resolved.

Hodge was replaced by Jim Murphy, former Cabinet Office minister with responsibility for egovernment, in last week's reshuffle.