IT development underpinning Universal Credits comes under fire from MPs and experts

The delivery of the government's flagship Universal Credits (UC) initiative is coming under fire as observers are casting an increasingly critical eye on the IT systems underpinning the politically sensitive project.

MPs on the Public Accounts Committee (PAC) told the Department for Work and Pensions (DWP) in a report this week that dependence on tight deadlines for IT systems deployment for UC were "unrealistic".

UC, the DWP's flagship programme, is due to go live in 2013. The IT systems underlying the policy are being developed using an agile methodology, which relies on a more iterative method than traditional IT project roll-outs. But doubts have been raised that an agile approach may have been adopted as a contract add-on rather than as a central tenet of the project's strategy.

Margaret Hodge, chair of the PAC committee, said the transition to UC will depend heavily on the development of a new IT system to a very tight timetable. "This committee's experience is that such projects are rarely delivered to time, budget and specification, and any delays could put the department's ability to deliver savings at risk," she said.

The DWP has to cut its running costs by £2.7bn by 2015, at the same time as implementing fundamental reform of the welfare system through introducing UC.

The committee also expressed concerns about the extent to which cost reductions depend on the DWP's optimistic assumption that, in future, 80% of Jobcentre Plus customers will deal with their claims online, even though at the moment only 17% do so, especially when 31% of the poorest in society never use IT, said Hodge.

The committee is absolutely right to be concerned for all of reasons outlined, said Robert Morgan, partner at outsourcing advisory Burnt Oak Partners. The DWP's interdependence with HM Revenue & Customs also does not bode well for the project, given the department's history in failing to deliver large IT projects, he added.

"It's hard to think which mad man might [agree to this contract] looking at the terms and conditions. It's also an absolutely huge transformation project," said Morgan.

"This is set up to fail not just because of the budget reduction restrictions, or the wild assumptions that it can move from 17% of users to 80%, but also by virtue of the fact this is a moving environment, involving living, breathing people. The DWP's remit is unlike any other department's. Pensioners dying because they don't get their benefits on time is the sort of thing that can bring down a government."

Hodge said in the committee report: "Too often this committee has highlighted examples in other government departments where IT systems or projects have gone off track and emerging problems have gone unchallenged by staff."