Andrey Popov - Fotolia

Hundreds of IT contractors let go and projects put on hold as DWP denies rumours of overspend

Hundreds of digital and technology projects are under review at the Department for Work and Pensions - but department denies rumours of budget overspend

Hundreds of IT projects have been put on hold at the Department for Work and Pensions (DWP) and hundreds of contractors let go, amid rumours of a massive overspend on digital and technology programmes, according to Computer Weekly sources.

Multiple sources said that more than 300 IT contractors have recently been told to leave – some with just one day’s notice – and as many as 500 projects are under review, on hold or set to be scrapped.

Computer Weekly has been told that an audit of DWP’s accounts at the halfway point in the financial year revealed a significant overspend in DWP Digital, the department’s IT team. Some sources claimed figures as high as £250m, although a DWP spokesperson denied this.

The department said it uses contractors and third-party suppliers to provide flexibility for projects that are being continually revised and improved.

“We routinely review our work to ensure that we focus our resources on the most viable options and deliver the best value for the taxpayer. This year we are on track to deliver record digital transformation on a scale larger than most FTSE 100 companies,” said a DWP spokesperson.

The spokesperson added that it is “untrue that there is a project overspend”, but Computer Weekly sources said staff were told that project reviews and contractor lay-offs are being done to bring spending back in budget.

Use of contractors

Computer Weekly understands that IT contractors working at DWP locations around the UK were informed last week they were being let go to cut costs.

In briefings led by DWP chief digital and information officer Mayank Prakash, and Mohammed Din, deputy IT director for digital workplace, contractors were told that as many as 500 of DWP’s 530 digital and IT projects were being reviewed.

Projects affected include a move to migrate applications away from existing HPE datacentres to the Crown Hosting Service set up by the Cabinet Office, and moving legacy systems off ageing Fujitsu VME mainframes. Several IT suppliers to DWP are also believed to be affected.

Sources also suggested that several thousand Microsoft Surface Pro laptops are “sitting in cupboards” waiting to be deployed as part of a major desktop overhaul.

Over the past two years, DWP’s use of external contractors has mushroomed. In September 2014, the department employed 192 non-payroll consultants – largely but not exclusively IT experts – at a cost of £3.3m per month. By August 2016, that number had grown to 667, paid £8.3m per month, according to figures published on

DWP has increased its use of temporary IT staff to support the many digital projects it has underway, including the controversial Universal Credit welfare reform programme.

All on track

Prakash took over as the head of DWP Digital in September 2016, after former DWP director general of business transformation Kevin Cunnington moved to take over as chief of the Government Digital Service. Cunnington’s team was moved into the DWP Digital operation under Prakash.

There appear to be no lay-offs among permanent DWP staff, who are being retained to work on continuing projects where contractors are no longer available.

Sources said that, earlier this month, Prakash informed staff that projects were going well and that all was on track.

The difficulties at DWP come as Cunnington revealed plans to weaken GDS’s spending controls – the process whereby department require approval from GDS for digital projects above £100,000 in value.

In an interview with Computer Weekly, Cunnington said: “Nowadays, we are more comfortable that departments have created their own capability.”

UPDATE - 13/9/2017: A freedom of information request submitted by Computer Weekly showed the DWP Digital half-year overspend to be £60m - read more details here.

Read more about IT at DWP

Read more on IT for government and public sector