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.

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Cabinet audit: what does the appointment of Andrea Leadsom as Environment Secretary mean for policy?

The political and policy-based implications of the new Secretary of State for Environment, Food and Rural Affairs.

A little over a week into Andrea Leadsom’s new role as Secretary of State for Environment, Food and Rural Affairs (Defra), and senior industry figures are already questioning her credentials. A growing list of campaigners have called for her resignation, and even the Cabinet Office implied that her department's responsibilities will be downgraded.

So far, so bad.

The appointment would appear to be something of a consolation prize, coming just days after Leadsom pulled out of the Conservative leadership race and allowed Theresa May to enter No 10 unopposed.

Yet while Leadsom may have been able to twist the truth on her CV in the City, no amount of tampering will improve the agriculture-related side to her record: one barely exists. In fact, recent statements made on the subject have only added to her reputation for vacuous opinion: “It would make so much more sense if those with the big fields do the sheep, and those with the hill farms do the butterflies,” she told an audience assembled for a referendum debate. No matter the livelihoods of thousands of the UK’s hilltop sheep farmers, then? No need for butterflies outside of national parks?

Normally such a lack of experience is unsurprising. The department has gained a reputation as something of a ministerial backwater; a useful place to send problematic colleagues for some sobering time-out.

But these are not normal times.

As Brexit negotiations unfold, Defra will be central to establishing new, domestic policies for UK food and farming; sectors worth around £108bn to the economy and responsible for employing one in eight of the population.

In this context, Leadsom’s appointment seems, at best, a misguided attempt to make the architects of Brexit either live up to their promises or be seen to fail in the attempt.

At worst, May might actually think she is a good fit for the job. Leadsom’s one, water-tight credential – her commitment to opposing restraints on industry – certainly has its upsides for a Prime Minister in need of an alternative to the EU’s Common Agricultural Policy (CAP); a policy responsible for around 40 per cent the entire EU budget.

Why not leave such a daunting task in the hands of someone with an instinct for “abolishing” subsidies  thus freeing up money to spend elsewhere?

As with most things to do with the EU, CAP has some major cons and some equally compelling pros. Take the fact that 80 per cent of CAP aid is paid out to the richest 25 per cent of farmers (most of whom are either landed gentry or vast, industrialised, mega-farmers). But then offset this against the provision of vital lifelines for some of the UK’s most conscientious, local and insecure of food producers.

The NFU told the New Statesman that there are many issues in need of urgent attention; from an improved Basic Payment Scheme, to guarantees for agri-environment funding, and a commitment to the 25-year TB eradication strategy. But that they also hope, above all, “that Mrs Leadsom will champion British food and farming. Our industry has a great story to tell”.

The construction of a new domestic agricultural policy is a once-in-a-generation opportunity for Britain to truly decide where its priorities for food and environment lie, as well as to which kind of farmers (as well as which countries) it wants to delegate their delivery.

In the context of so much uncertainty and such great opportunity, Leadsom has a tough job ahead of her. And no amount of “speaking as a mother” will change that.

India Bourke is the New Statesman's editorial assistant.