MPs accuse DWP of 'shocking absence of control' over Universal Credit suppliers

Gurjit Degun
7 November 2013

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MPs have accused the Department for Work and Pensions (DWP) of a “shocking absence of control” over its suppliers on the Universal Credit programme.


It comes after an investigation by the Public Accounts Committee into the DWP’s implementation of Universal Credit, which aims to simplify the welfare system.


The committee found the DWP neglected implementing basic procedures for monitoring and authorising expenditure. It said in some cases secretarial staff approved multi-million pound orders.


The investigation revealed a personal assistant to the programme director approved purchase orders with a total value of £8.7 million. And in another case, another personal assistant to the programme director approved two purchase orders for £22.6 million and £1.1 million, respectively – even though the director’s approval authority was only £10 million.


The report added individual payments to suppliers could not be linked to particular pieces of work that had been delivered.


It added: “Some of the IT assets that have been delivered cannot be used in the programme and so must be written-off; while initial estimates suggest the write-offs could amount to at least £140 million, we heard evidence that the precise extent is as yet unknown because the department’s impairment review is not yet complete, relying so far on supplier self-assessment.”


The committee recommended the DWP must complete its own impairment review “as a matter of urgency”; implement suitable payment controls; and demonstrate it is getting value for money through future negotiations with suppliers.


Margaret Hodge, Labour MP and chairman of the PAC, said: “There has been a shocking absence of control over suppliers, with the department failing to implement the most basic procedures for monitoring and authorising expenditure.


“In some cases multi-million pound orders were approved by secretarial staff. Individual payments could not even be linked to particular pieces of work that had been delivered.”


Responding to the report, a statement from the DWP said: “This report doesn’t take into account our new leadership team, or our progress on delivery. We have already taken comprehensive action including strengthening governance, supplier management and financial controls. We don’t recognise the write off figure quoted by the committee and expect this to be substantially less.”

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