Universal Credit IT write-offs will reach £500m, claims Hodge

Public Accounts Committee chair said existing systems are ‘not fit for purpose' and ‘simply cannot cope'

The next government will have to write off over £500 million invested in ICT for Universal Credit, Public Accounts Committee (PAC) chair Margaret Hodge has claimed.

The Department for Work and Pensions (DWP) had spent £612 million on Universal Credit as of April 2014 according to its annual accounts, though it did not specify how much of that is on ICT. The DWP has said it expects to spend £2.4 billion to 2023 on the project.

A report published by the PAC in November last year found that the department had spent £425 million by April 2013, £303 million of which was for IT development. Of that £303 million, the department admitted it was writing off £40.1 million, with a further £91 million to be written off over a five year period.

ComputerworldUK asked the DWP for the latest figures of ICT and overall spending on Universal Credit but did not receive a response.

In a BBC Radio 4 programme called 'Inside Welfare Reform', Hodge (pictured) said existing ICT systems for Universal Credit are "not fit for purpose" and "simply cannot cope".

She added: "I believe, though I haven't got officials to admit to this, that after the general election we will probably be writing off in excess of half a billion pounds on investment in IT that has failed to deliver."

The Department for Work and Pensions (DWP) dismissed the claim as "nothing but speculation" when contacted by ComputerworldUK.

The DWP is working on two systems for Universal Credit simultaneously - one that underpins the existing pilots, and an 'end-state' digital solution that will eventually replace the original system.

The enhanced digital service is due to start being tested in a limited postcode area in Sutton by the end of this year, according to the DWP. It will test the full scope of Universal Credit for all claimant types.

'No ownership'

During the programme, Hodge criticised leadership of the programme as "outrageously weak". Universal Credit is now on its seventh boss in two years.

She said: "Consistency of leadership is vital. I don't think there has been ownership of the project by the senior officials in the DWP."

Hodge also described management of the IT suppliers to the project as having been "abysmal".

The PAC chair echoed claims aired last night that the IT system for Universal Credit is "completely unworkable, badly designed" and already "out of date".

In a Channel 4 Dispatches programme, a whistleblower said that the IT is unable to handle complicated cases and so they have to be done manually.

The DWP dismissed the claims and insisted "there is absolutely no evidence that cases cannot be dealt with".

The government's flagship welfare project to merge six benefits into a single monthly payment was due to launch in October 2013 with one million people claiming the benefit by April 2014.

However last week welfare minister Iain Duncan Smith admitted the original implementation dates have been abandoned.

Duncan Smith said he 'hoped' rollout would be complete by 2020, with all new claimants claiming the new benefit by 2017. However he said: "Arbitrary dates and deadlines are the enemy of secure delivery."

The National Audit Office is currently conducting a follow-up study into Universal Credit, due to be published imminently.