Flagship benefit reform savaged by MPs for failures

The Universal Credit scheme has been blighted by 'alarmingly weak' management. Picture: PA

The Universal Credit scheme has been blighted by 'alarmingly weak' management. Picture: PA

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The government’s flagship benefit reform has been savaged by MPs for “shocking” failures that have already wasted at least £140 million.

The Universal Credit scheme has been blighted by “alarmingly weak” management, with secretaries allowed to authorise purchase orders worth more than £20m. In some cases, it is unclear what suppliers have been paid for.

The cross-party public accounts committee (PAC) also voiced doubts about whether the project could be fully delivered by 2017 – branding a pilot “inadequate” and open to fraud. Universal Credit is due to replace a bundle of means-tested benefits in four years, with Work and Pensions Secretary Iain Duncan Smith insisting it can ensure people are always better off in jobs and will save £38 billion by 2023.

However, a former Olympics executive had to be drafted in earlier this year to “reset” the programme amid concerns over delays and IT issues.

The PAC report said the Department for Work and Pensions (DWP) had “neglected to implement basic procedures for monitoring and authorising expenditure”.

“We saw evidence that purchase orders with a total value of £8.7m were approved by a personal assistant to the programme director,” the MPs said.

“In another case, two purchase orders, one for £22.6m and one for £1.1m, were approved by a personal assistant to the programme director, whose delegated financial authority at the time was only £10m.

“When the department made individual payments to suppliers, these could not be linked to particular pieces of work that had been delivered.”

The MPs said some of the IT assets delivered could not be used in the programme and so must be written off. Initial estimates suggest the write-offs could amount to £140m.

PAC chair Margaret Hodge said implementation of Universal Credit so far had been “extraordinarily poor”.

“The failure to develop a comprehensive plan has led to extensive delay and the waste of a yet to be determined amount of public money,” she said.

“Some £425m has been spent so far on the programme. It is likely that much of this, including at least £140m worth of IT assets, will now have to be written off. The management of the programme has been alarmingly weak.”

Mrs Hodge said that from the outset, the department had failed to grasp the nature and enormity of the task; failed to monitor progress regularly; and, when problems arose, failed to intervene promptly.

“Lack of day-to-day control meant early warning signs were missed, with senior managers becoming aware of problems only through ad hoc reviews.”

The MPs said the project would not hit its current target of enrolling 184,000 claimants by April 2014. As a result, the later stages would have to be speeded up to meet the 2017 completion date – but that would “pose new risks”.

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