Universal Credit scheme “riddled with problems”

Universal Credit scheme “riddled with problems”

The Government’s flagship programme of welfare changes has been poorly managed and is riddled with major IT problems and escalating costs, according to the government's official auditors.

The National Audit Office (NAO) has concluded that the Department for Work and Pensions (DWP) has not achieved value for money in its early implementation of Universal Credit.

It says the DWP is not yet able to assess the value of the systems it spent over £300 million to develop and has been forced to delay the national roll-out of the programme to claimants.

The introduction of Universal Credit has several implications for landlords. The scheme effectively ups the chances of landlords not receiving rent because it is the tenant, not the landlord, who gets given the money. Many landlords fear tenants, who may have limited budgeting skills, will not prioritise rent payments and will fall into arrears.

The NAO report concludes the DWP was overly ambitious in both the timetable and scope of the programme. It says the DWP took risks to try to meet the short timescale and used a new project management approach which it had never before used on a programme of this size and complexity. It was unable to explain how it originally decided on its ambitious plans or evaluated their feasibility.

The NAO has published a full report on the first 100 days of Universal Credit and gets straight to the point in its summary:

“70% of the £425 million spent to date has been on IT systems. The Department, however, has already written off £34 million of its new IT systems and does not yet know if they will support national roll-out. The existing systems offer limited functionality.”

The NAO says the DWP will not introduce Universal Credit for all new claims nationally in October 2013 as planned, and is now reconsidering its plans for full roll-out.

Instead, it will extend the pilots to six more sites with these new sites taking on only the simplest claims. Delays to the roll-out will reduce the expected benefits of reform and – if the department maintains a 2017 completion date – increase risks by requiring the rapid migration of a large volume of claimants.

The DWP, meanwhile, remains optimistic about the scheme’s success. Howard Shiplee, director general of Universal Credit, said: “We can’t underestimate the scale of the challenge. This is a fundamental transformation of the welfare system. It involved rebuilding and merging programmes currently run out of DWP, HMRC and local authorities across the country.”