Universal Credit labelled a £700m flop which has had 'very little progress'

Public Accounts Committee says only 0.3 per cent of the eligible population could claim Universal Credit in October 2014

The Department for Work and Pensions (DWP) has spent £700m on Universal Credit but has managed only "very little progress", according to MPs at the Public Accounts Committee (PAC).

In a report looking into the development of the programme, the PAC's chair Margaret Hodge said that little had been achieved on the front line.

"Fewer than 18,000 people were claiming Universal Credit by October 2014, out of around seven million expected in the longer term - just 0.3 per cent of the eligible population," she said.

Last week, work and pensions secretary Iain Duncan Smith claimed that the scheme was actually "£600m under budget" and is on course to be offered to all UK job centres by 2016.

In response to MPs insisting that DWP will write off at least £140m, Duncan Smith said that there was "always a certain amount of write downs and write-offs".

But after numerous delays and issues, Hodge said she hoped that this "proves to be accurate".

But she suggested that as DWP has claimed there will be wider benefits attached to the programme such as higher employment, it would be hard to judge the programme on whether it is value for money just yet.

The IT behind the Universal Credit project, which aims to merge six benefits into a single monthly payment, has been called "completely unworkable, badly designed, and already out of date" by a jobcentre employee, who was speaking to Channel 4's Dispatches. Meanwhile, a former DWP employee told Computing that the DWP's IT strategy was hampered by employees worrying whether the tabloid press would approve of their actions.

At the time, he said that the atmosphere of worry and caution spawned a mantra within the department: "Don't risk anything, don't challenge anything and aim for final delivery".

The PAC said that the IT infrastructure continues to be of "particular concern".

"The department has spent £334m with suppliers developing its ‘live' service systems for claimants who have straightforward initial claims which do not involve all six benefits, yet it expects to re-use just £34m worth of this IT in the longer term," Hodge stated.

The jobcentre employee had told Dispatches that the systems required manual intervention, and Hodge said that this meant that they were expensive to operate.

But DWP is testing and developing a new digital service, which it hopes will deliver Universal Credit to all types of claimant in the long-term. It has since taken a ‘twin-track approach' - running the two separate systems in parallel, but Hodge believes that this is "complicated and expensive", and the PAC has urged the department to ensure it does not allow the mixed approach to continue for longer than is required.

DWP believes the live service will be the main system for the future, the Major Projects Authority told the PAC that it doubted that those systems were capable of handling the full range of claimants.

PAC recommends that DWP should set out publicly its current milestones for what it expects to achieve at different points in the programme, clearly explaining any future changes to the scope, cost and timings of these.

It also states that the department must set out clearly what it has really gained from its spending so far, including the money spent on piloting of the programme, and from the investment in live service IT systems.