IBM signs £525m DWP contract to provide Universal Credit systems

The Department for Work and Pensions (DWP) has signed a seven-year contract with IBM worth £75m per year to provide systems, which will include the delivery of its flagship Universal Credit programme.

IBM will provide services across 60 applications in the department's business technology estate for up to £75m per year. These will include a customer information system, resource management, fraud referral and intervention management - with some of the systems to be used for the delivery of Universal Credit.

The company is to facilitate the sharing of data with other government departments and help move government services online. IBM will also manage the department's finance and HR applications. The DWP may extend the contract by up to three years, potentially bringing the total contract value up to £750m.

The department is to sign a total of five contract lots to help the DWP meet its "transformation" agenda, which includes making significant budgetary cuts. The department has also signed a seven-year contract with Capgemini for up to £10m per year for the provision and maintenance of business applications. Capgemini said it did not have details about the specific systems this will include, but said they would not involve the delivery of Universal Credit.

"We are replacing a number of commercial contracts for our business systems that will support the delivery of services to the public. We're pleased that savings will be achieved over the duration of these new contracts," said a DWP spokesperson.

The full details of the department's Universal Credit contracts have not yet been announced, but the DWP is facing mounting concerns that the IT systems underpinning Universal Credit will not be delivered. MPs recently told the department that its tight deadlines for the project are "unrealistic", while reports suggest that project has moved to the top of George Osborne's warning list of projects that could fail.