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Iain Duncan Smith accused of misleading MPs over cost of IT failures Iain Duncan Smith accused of misleading MPs over cost of IT failures
(6 days later)
Iain Duncan Smith has been accused of misleading parliament after it emerged that the Department for Work and Pensions (DWP) could write off up to £161m spent on an IT system for ambitious welfare changes – more than four times what the minister said would be wasted.Iain Duncan Smith has been accused of misleading parliament after it emerged that the Department for Work and Pensions (DWP) could write off up to £161m spent on an IT system for ambitious welfare changes – more than four times what the minister said would be wasted.
The welfare minister also faces further embarrassing disclosures from PwC accountants who found that the universal credit system, which will allow the government to roll six welfare payments into one, has had little ministerial oversight. In one instance, a civil servant's personal assistant was allowed to sign off contracts, they found.The welfare minister also faces further embarrassing disclosures from PwC accountants who found that the universal credit system, which will allow the government to roll six welfare payments into one, has had little ministerial oversight. In one instance, a civil servant's personal assistant was allowed to sign off contracts, they found.
The disclosures emerged at a public accounts committee meeting on Wednesday when officials from the department were closely questioned by MPs.The disclosures emerged at a public accounts committee meeting on Wednesday when officials from the department were closely questioned by MPs.
Mike Driver, the finance director general of the department, confirmed that the costs could be as much as £161m, while Norma Wood, the head of the Major Projects Authority, agreed that the system would have to write off at least £140m.Mike Driver, the finance director general of the department, confirmed that the costs could be as much as £161m, while Norma Wood, the head of the Major Projects Authority, agreed that the system would have to write off at least £140m.
Margaret Hodge, the committee's chair, said she had been sent an official PwC report into the project which highlighted concerns that there was a lack of ministerial accountability. Of 25 contracts costing at least £25,000 reviewed by accountants, only 11 appeared to have been signed off by ministers, she said.Margaret Hodge, the committee's chair, said she had been sent an official PwC report into the project which highlighted concerns that there was a lack of ministerial accountability. Of 25 contracts costing at least £25,000 reviewed by accountants, only 11 appeared to have been signed off by ministers, she said.
The PwC report also found that a personal assistant to a senior civil servant had been allowed to authorise purchase orders, in contravention of strict procurement rules.The PwC report also found that a personal assistant to a senior civil servant had been allowed to authorise purchase orders, in contravention of strict procurement rules.
Hodge told the DWP's permanent secretary, Robert Devereux, that a National Audit Office report released last week was "damning" but an internal study she had been sent recently by PwC was even worse. "I think it's one of the worst I have seen in my time here … as I read it felt like it was an out-of-control project," she said.Hodge told the DWP's permanent secretary, Robert Devereux, that a National Audit Office report released last week was "damning" but an internal study she had been sent recently by PwC was even worse. "I think it's one of the worst I have seen in my time here … as I read it felt like it was an out-of-control project," she said.
Hodge accused the DWP of "sitting on" the PwC assessment for six months, and claimed it was a "damning indictment … PwC basically damns your control system."Hodge accused the DWP of "sitting on" the PwC assessment for six months, and claimed it was a "damning indictment … PwC basically damns your control system."
Labour on Wednesday night called for Duncan Smith to return to parliament to explain why he told MPs last week that his department expected to write off £34m.Labour on Wednesday night called for Duncan Smith to return to parliament to explain why he told MPs last week that his department expected to write off £34m.
Liam Byrne, Duncan Smith's shadow minister, said: "Parliament's watchdog has blown apart yet another cover-up by Iain Duncan Smith who it seems has tried to hide a write-off of over £100m on his disaster-hit universal credit project.Liam Byrne, Duncan Smith's shadow minister, said: "Parliament's watchdog has blown apart yet another cover-up by Iain Duncan Smith who it seems has tried to hide a write-off of over £100m on his disaster-hit universal credit project.
"We're now told there was no ministerial accountability and financial control was so weak that secretaries were signing huge purchase orders. Mr Duncan Smith must now publish the damning report by his auditors PwC. We must get to the truth ministers are trying to hide.""We're now told there was no ministerial accountability and financial control was so weak that secretaries were signing huge purchase orders. Mr Duncan Smith must now publish the damning report by his auditors PwC. We must get to the truth ministers are trying to hide."
Duncan Smith last week blamed civil servants for the IT failures that threatened to derail the scheme, telling the Commons: "When I arrived I expected professionalism to be able to do this."Duncan Smith last week blamed civil servants for the IT failures that threatened to derail the scheme, telling the Commons: "When I arrived I expected professionalism to be able to do this."
Devereux, the permanent secretary of his department, told the committee the programme had been poor value for money but he thought it could still be delivered by 2017, the government's deadline.Devereux, the permanent secretary of his department, told the committee the programme had been poor value for money but he thought it could still be delivered by 2017, the government's deadline.
Universal credit merges six benefits, with the claimant receiving a single monthly household payment. It requires different payments to landlords and more online claims, and merges in-work and out-of-work benefits, requiring new definitions of benefit conditions for those in work. It also requires close co-operation between the DWP systems and tax officials at HMRC.Universal credit merges six benefits, with the claimant receiving a single monthly household payment. It requires different payments to landlords and more online claims, and merges in-work and out-of-work benefits, requiring new definitions of benefit conditions for those in work. It also requires close co-operation between the DWP systems and tax officials at HMRC.
In the business case for the project, the DWP estimated substantial savings – a net benefit of £38bn by 2023.In the business case for the project, the DWP estimated substantial savings – a net benefit of £38bn by 2023.
From 2023, the estimated annual benefit was planned to be £7bn. It was initially planned that the project would be introduced nationally by October this year, but pilot projects were delayed and are now going ahead in four areas.From 2023, the estimated annual benefit was planned to be £7bn. It was initially planned that the project would be introduced nationally by October this year, but pilot projects were delayed and are now going ahead in four areas.
The NAO found the IT system could not identify potentially fraudulent claims, meaning manual checks were needed. Civil servants were also accused of having weak control of the programme and were unable to assess the value of the systems it spent over £300m to develop, the watchdog added.The NAO found the IT system could not identify potentially fraudulent claims, meaning manual checks were needed. Civil servants were also accused of having weak control of the programme and were unable to assess the value of the systems it spent over £300m to develop, the watchdog added.
A DWP spokesperson said: "The IT for universal credit is up and running well in the early rollout of the new benefit. It is to be expected that IT requirements evolve on a long-term programme of reform, but Howard Shiplee [the director general of universal credit] has been clear that he envisages using a substantial amount of the current IT for the national rollout."A DWP spokesperson said: "The IT for universal credit is up and running well in the early rollout of the new benefit. It is to be expected that IT requirements evolve on a long-term programme of reform, but Howard Shiplee [the director general of universal credit] has been clear that he envisages using a substantial amount of the current IT for the national rollout."
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