Universal Credit has "not achieved value for money", warns NAO

More bad news for Duncan Smith as the National Audit Office says there are "considerable weaknesses" in the department's financial controls over the programme.

Conveniently for Iain Duncan Smith, this year's DWP accounts were not published to coincide with his appearance at the work and pensions select committee yesterday; some may say it's now clear why.

In the accounts, which have now been released, the National Audit Office states that Universal Credit has "not achieved value for money", noting that the DWP has written off £40.1m of assets developed for the programme "as it will never use them" and that "it also now expects to write down £91.0 million of the remaining assets to nil value by March 2018, due to the considerable reduction in their expected useful life." The head of the NAO comments: "While this is the appropriate accounting treatment, it should not detract from the underlying issue that the Department has spent £91.0 million on assets that will only support a limited service for 5 years, with clear consequences for public value." In addition, it notes that there were "considerable weaknesses" in the department’s financial controls over Universal Credit and that the "size and complexity" of the programme "stretched the Department’s capacity and capability". 

Here's the statement Margaret Hodge, the head of the public accounts committee, has issued on the "truly shocking" figures. 

In 2012-13, the Department for Work and Pensions had to write-off £40.1m for assets that were developed for the implementation of the universal credit system but which they will now never use. They now tell us they will also have to write-off another £91m of assets over the next five years.

Whilst these figures are truly shocking, I do not think we have heard the end of this matter and would not be surprised if further write-offs emerge over the coming period. It is deeply depressing that DWP has chosen to pour more money into the existing IT system in what seems like a short-term fix, rather than showing the confidence and foresight to come up with a solution that will truly stand the test of time.

Even for those people who transfer to the new benefit, the online system is currently not able to deal with issues like frequent changes of circumstances, claims if a couple splits up, or conditionality.

In more bad news for IDS, the report also shows that the amount of money lost to fraud and error in the benefits system has risen from £3.2bn (2% of the total budget) last year to £3.5bn (2.1%). Of this total, £700m (0.4%) was lost due to official error, £1.6bn (0.9%) to claimant error and £1.2bn (0.7%) to fraud. 

Incidentally, it's worth noting that the latter figure is lower than the amount lost last year due to benefit underpayments: £1.4bn (0.9%). But don't expect the DWP to publicise that in its briefings. 

Iain Duncan Smith speaks at the Conservative conference in Manchester earlier this year. Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

Photo: Getty
Show Hide image

The campaign to keep Britain in Europe must be based on hope, not fear

Together we can show the world a generous, outward-facing Britain we can all be proud of.

Today the Liberal Democrats launched our national campaign to keep Britain in Europe. With the polls showing the outcome of this referendum is on a knife-edge, our party is determined to play a decisive role in this once in a generation fight. This will not be an easy campaign. But it is one we will relish as the UK's most outward-looking and internationalist party. Together in Europe the UK has delivered peace, created the world’s largest free trade area and given the British people the opportunity to live, work and travel freely across the continent. Now is the time to build on these achievements, not throw them all away.

Already we are hearing fear-mongering from both sides in this heated debate. On the one hand, Ukip and the feuding Leave campaigns have shamelessly seized on the events in Cologne at New Year to claim that British women will be at risk if the UK stays in Europe. On the other, David Cameron claims that the refugees he derides as a "bunch of migrants" in Calais will all descend on the other side of the Channel the minute Britain leaves the EU. The British public deserve better than this. Rather than constant mud-slinging and politicising of the world's biggest humanitarian crisis since the Second World War, we need a frank and honest debate about what is really at stake. Most importantly this should be a positive campaign, one that is fought on hope and not on fear. As we have a seen in Scotland, a referendum won through scare tactics alone risks winning the battle but losing the war.

The voice of business and civil society, from scientists and the police to environmental charities, have a crucial role to play in explaining how being in the EU benefits the British economy and enhances people's everyday lives. All those who believe in Britain's EU membership must not be afraid to speak out and make the positive case why being in Europe makes us more prosperous, stable and secure. Because at its heart this debate is not just about facts and figures, it is about what kind of country we want to be.

The Leave campaigns cannot agree what they believe in. Some want the UK to be an offshore, deregulated tax haven, others advocate a protectionist, mean-hearted country that shuts it doors to the world. As with so many populist movements, from Putin to Trump, they are defined not by what they are for but what they are against. Their failure to come up with a credible vision for our country's future is not patriotic, it is irresponsible.

This leaves the field open to put forward a united vision of Britain's place in Europe and the world. Liberal Democrats are clear what we believe in: an open, inclusive and tolerant nation that stands tall in the world and doesn't hide from it. We are not uncritical of the EU's institutions. Indeed as Liberals, we fiercely believe that power must be devolved to the lowest possible level, empowering communities and individuals wherever possible to make decisions for themselves. But we recognise that staying in Europe is the best way to find the solutions to the problems that don't stop at borders, rather than leaving them to our children and grandchildren. We believe Britain must put itself at the heart of our continent's future and shape a more effective and more accountable Europe, focused on responding to major global challenges we face.

Together in Europe we can build a strong and prosperous future, from pioneering research into life-saving new medicines to tackling climate change and fighting international crime. Together we can provide hope for the desperate and spread the peace we now take for granted to the rest of the world. And together we can show the world a generous, outward-facing Britain we can all be proud of. So if you agree then join the Liberal Democrat campaign today, to remain in together, and to stand up for the type of Britain you think we should be.