Damning NAO report reveals Universal Credit has become Universal Chaos

by Liam Byrne | 05.09.13 | in: Uncategorized, Universal credit, Welfare reform, Work and Pensions

Today’s NAO report reveals the extent to which Iain Duncan Smith has lost his grip on Universal Credit, in the face of years of warnings for DWP to get their multi-billion pound scheme back on track.


The damning report lays bare the chaos surrounding the government’s flagship welfare reform.


  • Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work
  • 2017 roll our date now in serious doubt amidst a series of delays
  • IT systems scrapped at the cost of millions, and DWP unable to say if its new IT system will support national roll out
  • Serious concerns over vulnerability to fraud
  • A series of warnings ignored – including from the Major Project Authority
  • DWP now unlikely to deliver financial savings promised


Liam Byrne MP, Labour’s Shadow Work and Pension Secretary, said:


“The truth is finally out. Universal Credit is a titanic-sized IT disaster which Iain Duncan Smith has tried to hide with cover up after cover up.


“Mr Duncan Smith swore blind this benefit shake-up was fine. Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds. Incredibly three years on, out of touch ministers still don’t know how things are supposed to work. It is exactly this lack of discipline that has left the social security bill spiraling up and up.


“The Conservatives welfare revolution has now finally collapsed.  It is now mission critical that David Cameron and Iain Duncan Smith swallow their pride and agree to the cross party talks we proposed in the summer. We cannot risk another day.”




The report states that:


  • Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work [para 18]]
  • “The Department has delayed rolling out Universal Credit nationally” and the 2017 roll out date is in serious doubt [para 2.14: The reset team in early 2013 considered different scenarios for rolling out Universal Credit, including completing migration later than October 2017. The current senior responsible owner is looking at different options for the timing of full roll-out”]
  • Wasted time and money on failed management and IT mean failure to bring down the costs of social security [2.23 In its December 2012 business case, the Department estimated that Universal Credit would generate benefits to society worth £273 million by 2014-15. The delay in national roll-out will reduce the value of these benefits;
  • The Department does not yet know to what extent its new IT systems will support national roll-out.
  • “the Department has not achieved value for money” (para 23) and has already written off £34 million in IT assets due to poor management (para 2.20). “Remedial work to make good or replace the IT assets could further increase the Department’s IT budget, which had already increased by 61 per cent (£241 million) between its May 2011 and December 2012 plans” (para 2.21)
  • There are serious concerns about fraud under the new scheme: “The Department’s current IT system lacks the ability to identify potentially fraudulent claims” (para 2.17).
  • In practice the Department did not have any adequate measures of progress. Major Projects Authority and supplier-led reviews in mid-2012 identified a ‘fortress’ mentality within the programme team and a ‘good news’ reporting culture (paragraph 3.23), Inadequate financial control over supplier spending. (paragraphs 3.24 to 3.26), Ineffective departmental oversight. The the Department has never been able to measure its progress effectively against what it is trying to achieve. (paragraphs 3.11, 3.27 and 3.38).
  • DWP repeatedly ignored warnings to get Universal Credit back on track The Department was warned repeatedly about the lack of a detailed ‘blueprint’, ‘architecture’ or ‘target operating model’ for Universal Credit. [Yet] Throughout the programme the Department has lacked a detailed view of how Universal Credit is meant to work. From mid-2012, it became increasingly clear that the Department was failing to address recommendations from assurance reviews. Although the nature and emphasis of its recommendations changed over time, the key areas of concern raised by the Major Projects Authority in February 2013 had appeared in previous reports. From mid-2012, the underlying concerns about how Universal Credit would work meant that the Department could not address recommendations from assurance reviews; it failed to fully implement two-thirds of the recommendations made by internal audit and the Major Projects Authority in 2012. (paragraphs 3.33 to 3.35).


The report is damning about the overall project management:


“The Department has delayed rolling out Universal Credit to claimants, has had weak control of the programme, and has been unable to assess the value of the systems it spent over £300 million to develop. These problems represent a significant setback to Universal Credit and raise wider concerns about the Department’s ability to deal with weak programme management, over-optimistic timescales, and a lack of openness about progress.”

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