New UK benefits structure depends on "high risk" IT projects

A House of Commons spending watchdog has warned that plans to shake up the benefits system while slashing £2.7bn off running costs depend on the "high risk" development of new computer systems.

Public Accounts Committee chair Margaret Hodge said: "The transition to Universal Credit, for example, will depend heavily on the development of a new IT system with HMRC [HM Revenue & Customs] to a very tight timetable.

"This committee's experience is that such projects are rarely delivered to time, budget and specification, and any delays could put the department's ability to deliver savings at risk."

A committee report said that Universal Credit, intended to simplify the system and encourage more of those relying on state support into employment, depends on the Department for Work and Pensions (DWP) and HMRC successfully co-ordinating the introduction of the new system handling real-time data on the income of every adult "to a very tight timetable".

It said cutting running costs also depends on the "optimistic expectation" that 80 per cent of claimants will communicate online by September 2013 even though only 17 per cent currently do so, and 31 per cent of the poorest never use IT.

The report warned: "Both of these areas are high risk, and any delays are likely to impact on planned cost reductions. There are insufficient contingencies in place and services could be adversely affected if things do not go to plan.

"Too often this committee has highlighted examples in other government departments where IT systems or projects have gone off track and emerging problems have gone unchallenged by staff."

The MPs pointed out: "We have reported previously, for example, on the difficulties with the introduction of new information systems, such as the new PAYE system, the Single Payment Scheme for farmers and electronic patient records in the NHS."

The DWP claimed 86 per cent of its "customers" already use the internet, 67 per cent have access to it in their homes and 40 per cent are "ready, willing and able" to use online Jobcentre services.