The dire reports about failures in the flagship welfare reform programme published in Publicnet during the last few months now have the official stamp of approval. The NAO report published today reveals the scale of the disaster and the magnitude of the challenge to redeem the situation.

Universal Credit will simplify the benefits system, improve work incentives and reduce fraud and error. It will replace income-based Jobseeker’s Allowance; income-related Employment and Support Allowance; Income Support; Child Tax Credits; Working Tax Credits and Housing Benefit.

The article in the Daily Telegraph by Howard Shiplee, director of the universal credit programme, see Publicnet 4 September 2013, describing the failures of the project, can now be seen as a pre-emptive move to soften the impact of the damming NAO report.

The report identifies the causes of failure in the project as weak management, ineffective control and poor governance. It reveals that £34m has been written off because of failed IT programmes. The effect of these failures may result in the national launch, planned for 2017, being delayed says the NAO. A national roll out planned for next month will now be restricted to six areas.

Ministers have claimed that universal credit will cut benefit fraud by £200m a year, but continuing concerns have been expressed about the security of the system. Ross Parsell, Director of Cyber Security, Thales UK estimated that with 1.56 million people claiming Jobseeker’s Allowance at a minimum of £56.25 a week, just that element of welfare presents a £4.56 billion fraud risk over the course of a year.

The NAO report now reveals that the IT system could not identify potentially fraudulent claims, meaning manual checks were needed. Such checks will not be feasible or adequate once the system is running nationally.

Amyas Morse, head of the National Audit Office, said: “The Department’s plans for Universal Credit were driven by an ambitious timescale, and this led to the adoption of a systems development approach new to the Department. The relatively high risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance. Universal Credit could well go on to achieve considerable benefits if the Department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out.”