NAO confirms plan to review Universal Credit again this year

The National Audit Office announces it will conduct a second investigation into the DWP's Universal Credit project this year

The National Audit Office (NAO) has confirmed plans to conduct a second investigation into the controversial Universal Credit programme this year – as revealed last week by Computer Weekly.

The government spending watchdog said the review will examine progress made by the Department for Work and Pensions (DWP) in "delivering its twin-track approach of expanding the current service, and developing a digital service that will be capable of delivering the full scope of Universal Credit”.

The report is scheduled to be released in Autumn 2014.

The NAO has warned that the DWP "still has much to do" to address previous concerns over the IT development for Universal Credit.

"It is clear that the department still has much to do to address all the concerns raised and to ensure it delivers value for money in its implementation of the Universal Credit programme," said the NAO's 2013/14 annual report and accounts for the DWP, also published today.

"The department is continuing to spend significant sums in developing the programme, as it both maintains and enhances the existing IT functionality, while simultaneously designing a new digital end-state to replace it. The department will need to exert rigorous control over this expenditure, and ensure it uses the available funding effectively and does not need to impair further assets."

Follow-up review

The Labour Party recently promised to pause the troubled project if it wins next year’s general election, and called on the government to bring in the NAO before the election.

Prior to that, Computer Weekly reported that NAO executive leader for digital and innovation, Sally Howes, said the organisation was likely to review Universal Credit before the election.

She said the NAO’s previous report attempted only to “describe what was taking place” in the DWP project, rather than analysing the reasons for the problems it revealed.

A statement from the watchdog today said: “The National Audit Office is undertaking a second value for money review of the Department for Work and Pensions’ Universal Credit programme. This is a planned follow-up to our first review Universal Credit: early progress, published in September 2013.”

In the 2013/14 annual report and accounts for the DWP, the NAO again highlighted the "uncertainty" surrounding the IT development for Universal Credit. 

The report said that approval from the Treasury is still required for some of the planned IT work.

"The overall cost of developing the assets to support the Universal Credit programme continues to remain subject to some uncertainty. HM Treasury has continued to approve funding for the development of the existing IT functionality so that it can support Universal Credit claims from couples and families. Further HM Treasury approvals are required during 2014," said the NAO report.

The accounts acknowledged that DWP has made progress on improving controls and governance around Universal Credit, although the new arrangements "are ongoing and their operational effectiveness is still to be proven".

IT work written off

The NAO has been highly critical of Universal Credit. Its 2013 report said that "throughout the programme the department has lacked a detailed view of how Universal Credit is meant to work".

The report revealed that as much as £40m of IT work was to be written off, with a further £91m planned to be written off over a five-year period.

A subsequent report on the DWP accounts, published in December 2013, said DWP “has to date not achieved value for the money it has incurred in the development of Universal Credit, and to do so in future it will need to learn the lessons of past failures”.

After the first NAO report, the Universal Credit project was “reset”, in favour of a new “twin-track” approach. In this method, the existing IT system would support the gradual roll-out of the new benefit, until a new “end-state” digital system is ready to replace it and the programme becomes live in 2017.

A DWP spokesman said: "Universal Credit is working well. We have rolled out to 14 jobcentres across the country and pressing ahead with roll out in the whole of the North West of England. When complete, one in eight jobcentres will offer the new service."

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