NAO Warns Of Rising Costs In Universal Credit Delay

Nov 26, 2014

The National Audit Office (NAO) has warned that the Department for Work and Pensions (DWP) is at risk of tacking up a multi-billion pound IT bill if Universal Credit (UC) is delayed any further.

In its latest progress report on the new benefits scheme, the watchdog claims it is too early to determine whether DWP is going to achieve value for money with its implementation of the programme.

The NAO claims that since the project was reset in early 2013, the Department has reduced delivery risks significantly by extending its timetable for introducing UC and choosing a more expensive twin-track approach.

These “twin tracks” consist of the roll-out of the “live service” which uses pre-2013 IT assets, alongside the development of the new “digital service.”

DWP has claimed the additional costs associated with this approach are justified because of the expected substantial benefits for society sooner and more safely.

However, the NAO believes that these “potential benefits” do not necessarily mean value for money, regardless of how the programme is implemented and the cost of doing so.

“DWP has reset UC on a sounder basis but at significant cost, by extending the time for implementation and choosing a more expensive approach,” said Amyas Morse, NAO head.

“It is now vital that the Department quickly establishes clear goals for delivering the programme, in  terms of cost, time and functionality, against which is can be held to account,” Morse claimed.

DWP Is Refining Its Approach, But Needs To Do More

Although DWP has developed and refined its “test and learn” approach while continuing to expand its live service, it has been criticised for being slow to produce long-term plans for future services.

The NAO has also noted that HM Treasury required the programme to produce more realistic plans before it approved the business case in September 2014.

The watchdog has also claimed that the UC digital service remains in the very early stages of development and continues to be delated.

It says that in this early state, the new benefits system will depend heavily on manual intervention and handle only a small number of claims.

Despite this, it will soon be tested with all claimant types, even the most complex.

Full Digital Service Rollout In “Challenging” Timeframe

DWP is currently intending to roll outs its fully scalable digital service in just 18 months time, a timetable the NAO says is “challenging.”

Although the Department expects siginificant savings from the digital service, the Office is concerned that there is no contingency plan in the event of further delays or even failure.

In costs, the watchdog estimates, using live service systems without any further investment could cost £2.8bn more in staff costs.

The NAO claims that in principal, DWP’s approach should allow it to learn from experience, improve the design and readiness of services and reduce risks.

However, the Department has only made gradual progress during the past year and it has yet to test the new digital approach or go through the process of integrating this will the live service.

The watchdog says DWP has continued to struggle to stabilise senior leadership roles and responsibilities, but does note it has taken a more active approach to managing suppliers and establishing financial control within the programme.

The NAO recommends that DWP ensures it has a clear basis for making decisions across the strands of the programme.


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