Online security risks could sink the government's proposed reforms to the welfare system, according to parliamentary under-secretary of state for welfare reform, Lord Freud (pictured).
However, Freud told MPs on the Work and Pensions Select Committee that the department wanted to make sure that the system was "utterly robust", by adopting security systems developed in the major banks. He added that the government was also talking to Amazon to learn how it maintained the security of its online estate.
The government's flagship reforms to the welfare system, called Universal Credit, are intended to commence rollout next year – with pilots in April 2013 followed by a full rollout in October. The aim of the reform is to consolidate six benefits, including Jobseeker's Allowance and Housing Benefit into one.
However, much IT work still needs to be done, including testing of the links between the new benefits system computer and the computers that the tax office, HMRC, uses to calculate personal tax.
"We're testing that bridge, the mechanics of the bridge with dummy data, and we will be getting live feeds for our trial in April," said Freud.
The link between the two government organisations' computers is essential to ensure that both the right amount of tax and benefits are paid – and to reduce the risk of fraud.
The government also needs to work out how free school meals and council tax benefit payments will be integrated into Universal Credit.
The benefit is also intended to be applied for entirely online – not using paper forms – for efficiency, with an initial target that 50 per cent of claims will be made over the internet from launch.
However, fewer than one-fifth of claims for Jobseeker's Allowance are currently made online.
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A discussion of the "risk perception gap", its implications and how it can be closed