NAO warns of spiralling Universal Credit costs if digital switch is delayed

The National Audit Office has today issued a report giving an update on the government’s Universal Credit programme, warning that delays in the digital development of the scheme and reliance on outdated IT systems could increase costs by £2.8 billion.

The NAO had previously criticised the scheme for “weak management, ineffective control and poor governance“.

The NAO commented that there are currently no contingency plans in place, in the event of any further delays to the digital service roll out, which according to the report is already six months behind schedule.

Work and Pensions Secretary Iain Duncan Smith has said that the programme is being considered in a “careful and controlled” way, with a gradual rollout. Currently only 17,850 people are using Universal Credit as part of a pilot scheme, increasing to half a million by 2016 and finally the Department of Work and Pensions is targeting a full 7 million person rollout in 2017.

In its report, the NAO said that as little as a further delay of six month could result in a £2.3 billion loss from missing out on getting people back into work.

Furthermore, if the nationwide rollout has to utilise existing IT systems, rather than the planned new digital programme, NAO’s report suggests a cost of £2.8 billion.

Margaret Hodge, Labour chairwoman of the Commons Public Accounts Committee, said the DWP is “throwing good money after bad” and “still not getting it right” on Universal Credit.

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