DWP ministers to decide whether to scrap all of the £300m Universal Credit IT

Ministers at the Department for Work and Pensions (DWP) are to decide this month whether to immediately scrap all of the £300m Universal Credit IT systems and start again from scratch.

Computer Weekly has learned that a review by Universal Credit director general Howard Shiplee will recommend two options for the future of the IT developed so far, which go even further than previous reports have suggested.

One option would mean scrapping all the work done so far, thereby admitting it is not fit for purpose, and bringing most of the development of new IT systems in-house under the control of the Government Digital Service (GDS).

Option two would involve continuing to use some of the existing IT to support the current Pathfinder pilot projects, but developing new systems for the full roll-out – effectively delaying any decision to throw away all the work completed so far.

Whichever option is chosen, sources suggest it is likely that all the existing IT work will eventually be scrapped.

The Cabinet Office, which controls GDS, is understood to favour the first option, while the DWP prefers to continue with the current IT for as long as possible – although it is likely this will mean further delays to the roll-out.

The final decision will be made by the Ministerial Oversight Group for the troubled welfare reform programme, led by secretary of state for work and pensions Iain Duncan Smith. It is likely the decision will be made in November to allow for a revised timetable for full roll-out to be published.

The National Audit Office (NAO) said in a highly critical report on Universal Credit in September that £303m had been spent so far on IT. Of that amount, the DWP has already admitted to writing off £34m of IT work, but MPs were told last month the final figure could be much higher.

Howard Shiplee is an experienced project manager who worked on delivery of the London 2012 Olympics. He was brought in to get the Universal Credit programme back on track, and since he started in May has been working on a review of the IT.

Shiplee wrote to MPs on the Public Accounts Committee last week to say he believed “there is substantial real and intellectual value in the work undertaken by the department and its suppliers up to February 2013”.

But DWP refused to release the full results of Shiplee’s review to the committee.

A DWP spokesman said: "Our work on the development of Universal Credit is ongoing and as we said back in July, we will be announcing the next stage of roll-out later this year. Universal Credit expanded to Hammersmith last week and our plans for delivery, which will ultimately bring a £38bn benefit to society, remain on track."

Labour’s shadow secretary of state for work and pensions Rachel Reeves wrote to the Prime Minister last week, urging him to “start taking responsibility for this fiasco”.

In a statement released to accompany the letter, Reeves said, “We now learn that the only options on the table involve millions more being committed with no certainty of when or whether this project will ever be properly rolled out. This is scandalous mismanagement of taxpayers’ money.”

She added: “David Cameron has serious questions to answer about how he has allowed things to get to this stage and how his complacent, incompetent and out-of-touch government has wasted scandalous amounts of money on a half-baked plan IT now can’t deliver.”

In her letter to Cameron, Reeves referred to “one option being considered by your government involves write down costs of £119m with further running costs of £96m.” These figures were also quoted in a Guardian story last week.

But if all of the IT were to be scrapped, the NAO report suggests that the final figure for the write-off would be in excess of £300m. 

Most of that money has been spent with the four key IT suppliers for the project - HP, IBM, Accenture and BT.