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DWP’s state pension success due to ‘minimum IT changes’

The Department for Work and Pensions met its deadline for introducing a new state pension system by making very few changes to IT systems and delaying the development of a digital service, says the National Audit Office

The Department for Work and Pensions’ (DWP) successful go-live of its new state pension service was made possible by delaying IT changes, according to a National Audit Office (NAO) report.

The DWP originally planned to develop a digital claims service to go alongside the deployment of the new pension, but decided to put that project on hold to keep to its deadline.

According to the NAO’s report on the new service, the department “met its deadline by making the minimum necessary changes to its IT systems”.

The report said: “From July 2013, it focused on adapting existing IT systems and deferred the development of a more ambitious digital solution that offered operational efficiencies and new customer services.”

The digital claims service was originally intended to go live in April 2016, but the DWP instead focused on a digital pension statement service, which went live in February this year.

“The new digital service for making a claim is now due in April 2017, but the change of circumstances service is not expected before 2018,” the NAO report said.

The DWP’s move to put its digital service on hold means that the project so far has come in on budget. However, it also means the operational savings delivered by the new state pension have dropped from £341m to £73m.

“Some £157m of the [savings] reduction was because the department decided to introduce the new state pension using legacy systems and defer the digital services,” the report said.

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The NAO has called on the DWP to develop proposals to “evaluate the new digital services” to understand the impact they will have on savings and customer service.

NAO head Amyas Morse said that so far, the project represents value for money, but warned that the work does not end there.

“The department has yet to reintroduce its plans for the digital administration of pensions, and achieving the longer-term objectives of the new state pension will depend on how it interacts with wider reform of the pensions system,” said Morse.

“Both these key areas will need to be tackled to achieve value for money as the reforms develop.”

The DWP is also collaborating with HM Revenue and Customs to identify risks to data quality and improve the flow of information between the two departments. However, the NAO report pointed out that the flow of data is “not supported by a formal data assurance agreement”.

According to sources, the DWP has been forced to put hundreds of IT projects on hold and let hundreds of contractors go amid rumours of a massive overspend on digital and technology programmes. The department has denied it is spending above budget.

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