Universal credit is designed to help working age people looking for work
The government's flagship welfare reform has been badly managed, is "overambitious" and poor value for money, the spending watchdog has said.
The National Audit Office said risks were taken with the universal credit to hit targets, IT systems had "limited functionality" and an unfamiliar project management approach was used.
A national rollout of the new benefit has been delayed due to IT glitches.
Ministers said the idea was "brilliant" but acknowledged it had had a "reset".
Under the government's plans, six key means-tested benefits - jobseeker's allowance, employment support allowance, housing benefit, working tax credit, income support and child tax credit - are to be combined into a single payment which ministers say will ensure that claimants are always better off in work and also reduce fraud.
The transformation, championed by Work and Pensions Secretary Iain Duncan Smith, requires the merging of complex computer systems in benefits offices, HM Revenue and Customs and local councils — which the government insists can be done.
All new claimants were supposed to receive the universal credit from next month as part of a phased implementation plan but this has been delayed following a number of pilots earlier this year.
'Poor governance'Instead, new claimants at six "hub job centres" in England, Wales and Scotland will receive the new benefit from October.
The watchdog said the scope of the project and the timetable for its introduction was too ambitious and while there was still potential for it to bring "considerable benefits", it urged the government to scale back its plans and make them more realistic.
Among the problems the watchdog identifies in its report are:
- Officials were "unable to explain" the reasoning behind the timescales or their feasibility
- There were no "adequate measures" of progress
- Computer systems lack the function to identify potentially fraudulent claims, relying instead on manual checks
- £34m investment in IT systems has been written off
- The Department for Work and Pensions lacked IT expertise and senior leadership
- Delays to the rollout will reduce the expected benefits of reform
Expenditure on IT systems has accounted for more than 70% of the £425m spent to date but the report suggested officials do not yet know whether the infrastructure in place will support a national rollout.
ORIGINAL TIMETABLE
- From October 2013 to April 2014 about half a million new claimants were due to receive universal credit instead of jobseeker's allowance, employment support allowance, income support, housing benefit, working tax credit and child tax credit.
- At the same time, another half a million existing claimants and their families were due to be transferred to the new credit when their family circumstances change significantly, for instance if they get a job or have another child.
- From April 2014 a further 3.5 million claimants and their families were due to move to universal credit.
- And from the end of 2015 to the end of 2017 a further three million people are due to be moved over, focusing on housing benefit claimants
While steps were taken at the end of last year to get to grips with some of the problems, the watchdog said the "underlying issues" had not been addressed and there was no "detailed view" about how the system was supposed to work.
"The relatively high risk trajectory was not, however, matched by an appropriate management approach," said Amyas Morse, the head of the National Audit Office.
"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 rollout."
'Missteps'The project suffered a tragic setback earlier this year when Philip Langsdale, the Department for Work and Pensions' chief information officer, died only four months after taking over responsibility for it.
The man drafted in earlier this summer to take over the running of universal credit has admitted there have been "missteps".
"It's clear to me there were examples of poor project management in the past, a lack of transparency where the focus was too much on what was going well and not enough on what wasn't and with suppliers not managed as they should have been," Howard Shiplee told the Daily Telegraph - while claiming things had been "put right".
"I'm not in the business of making excuses, and I think it's always important to acknowledge in any project where things may have gone wrong in order to ensure we learn as we go forward," the former London 2012 executive added.
Labour accused ministers of trying to cover up a "Titanic-sized IT disaster" while trade unions said the watchdog's report was a "damning indictment" of the state of the project.
"Mr Duncan Smith swore blind this benefit shake-up was fine," said Labour's welfare spokesman Liam Byrne. "Now we learn he has completely lost control of his department at a potential cost of hundreds of millions of pounds.
"The Conservatives welfare revolution has now finally collapsed. It is now mission-critical that David Cameron and Iain Duncan Smith swallow their pride and agree to the cross-party talks we proposed in the summer. We cannot risk another day."
Ministers insist universal credit is already delivering results and will still be introduced for all claimants by the final deadline of 2017.
"Universal credit is a brilliant policy, designed to ensure that work always pays and that hard-working taxpayers see their money being spent judiciously," Cabinet Office minister Francis Maude said.
"I am delighted that since the new year, my Cabinet Office teams have been able to support the Department for Work and Pensions to reset the programme and back Iain Duncan Smith's crusade to reform welfare."
Source: BBC News - Business http://www.bbc.co.uk/news/uk-politics-23963867#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa
