Spending watchdog sniffs trouble with DWP's flagship IT project

Public Accounts Committee report highlights concerns about the Universal Credit System project

The Public Accounts Committee (PAC) has released a report that questions the ability of the Department for Work and Pensions (DWP) to achieve targeted cost savings of £2.7bn, citing concerns around the complex and expensive Universal Credit IT system currently being created.

The Universal Credit System, a £2bn system due for completion in 2013, has been designed to make work pay for those currently on benefits and this will be linked at a fundamental level to the HMRC real-time benefits system, also currently under development.

The report's concerns lie in whether the department will be able to meet the deadlines it has set, stating that "failure to do so could increase costs and have a knock-on effect on other budgets and cost reduction plans".

And this PAC is not a lone voice...

The Universal Credit System has come under repeated fire for resembling the unwieldy IT systems of the past.

And Joe Harley, government CIO and CIO of the DWP, conceded at a PAC hearing in March that the system is one of the biggest IT projects in the government's history.

Technology trade body Intellect also voiced concerns when it submitted a critical but confidential report on the subject to Work and Pensions Secretary Ian Duncan-Smith in June this year.

The report, which was leaked to The Observer, highlighted IT suppliers' concerns regarding what they considered to be an unrealist planned finish date of 2013, adding that a more realistic target would be 2017.

A PAC meeting held in May as part of a series examining government IT failures more generally also cast doubt on the likelihood of the project meeting its targets.

The latest PAC report, released on Tuesday, questions whether the DWP has put sufficient IT support resources behind the new IT systems that will underpin the Universal Credit System.

"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," said PAC chair Margaret Hodge.

The report is also critical of the new agile approach to the development of Universal Credit, which will see the department develop the software in incremental steps.

It conceded that ridding the process of a lengthy and detailed planning phase and simplifying the change process would reduce the risk of missing deadlines, but warned that the agile method is "likely to have introduced other, as yet unquantified risks".

Getting 80 per cent of jobseekers online is unrealistic

The report also makes clear that the PAC considers the DWP's expectations around online use of its services to be unrealistic.

To achieve its cost saving targets the department is assuming that 80 per cent of its customers will access their local job centres via the internet. It expects this target to be achieved by September 2013.

This is despite the fact that following the launch of an online service in June 2009, just 17 per cent of claimants are using it.

In addition, the report cites research showing that the poorest third of the population do not access the internet.

"Other parts of government, such as the Driver and Vehicle Licensing Agency, did increase the use of online services [when they made a portal available] but the Department for Work and Pensions is dealing with a different client group.

"Data published by the Office for National Statistics in August 2010 found that 31 per cent of the poorest in society currently do not use the internet, and these people will be the department's clients," it said.

The report also states that the department could not explain the basis of the 80 per cent target at a hearing on 5 September.

The report states that in light of the deficit, the DWP should spell out alternative actions if the assumed savings from customers are not achieved.