NAO slams Universal Credit for 'not achieving value for money'

4 September 2013

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5 September 2013 | Will Green

The National Audit Office (NAO) has censured implementation of the Universal Credit welfare reforms, which it says have “not achieved value for money”.

In a scathing report, Universal Credit: early progress, the NAO said the Department for Work & Pensions (DWP) was “unable to assess the value of systems it spent over £300 million to develop” and had to write off £34 million of new IT assets.

The NAO said: “Over 70 per cent 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.”

In its report, the NAO says the DWP was “overly ambitious”, “took risks” to meet a short timescale and was forced to delay rollout of the programme, which was due to start in October.

“In practice, the department did not have any adequate measures of progress,” the report said.

Amyas Morse, head of the NAO, said: “The department’s plans for Universal Credit were driven by an ambitious timescale and this led to the adoption of a systems development approach new to the department. The relatively high-risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance.

“Universal Credit could well go on to achieve considerable benefits if the department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out.”

A DWP spokesman said: “We are committed to delivering Universal Credit on time by 2017 and within budget and, under new leadership, we have a plan in place that is achievable.

“The report does not cover the significant developments we’ve made since April, including the go-live in Greater Manchester, our progress on the IT challenge, the latest plans for expansion from October, or the fact that we brought in two of the country’s leading project management experts to lead Universal Credit.”

Howard Shiplee, former director of construction for the 2012 Olympics, is leading the project.

Universal Credit – costing £2.4 billion to implement – will replace six means-tested benefits that cost £67 billion in 2012/13. According to the NAO, the DWP calculates it will save £38 billion over the 12 years to 2022/23 and then £7 billion annually thereafter.

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