The government has been slammed for having to write off £34m on IT systems that do not deliver the necessary functionalities for the Department for Work and Pensions (DWP) Universal Credit Scheme.
A report by the National Audit Office (NAO) found that of the £425m spent on the IT systems for the scheme, millions has been lost.
“Over 70 percent of the £425m spent to date has been on IT systems. The Department, however, has already written off £34m of its new IT systems and does not yet know if they will support national rollout,” it said.
“The existing systems offer limited functionality. For instance, the current IT system lacks a component to identify potentially fraudulent claims so that the Department has to rely on multiple manual checks on claims and payments.
“Such checks will not be feasible or adequate once the system is running nationally. Problems with the IT system have delayed national rollout of the programme.”
The report also gave a breakdown of the areas where spending had been made for the deployments of the technology systems.
“In total, IT investment costs were for core software applications (£188m) including a payment management component (£11m), an interface with real-time information (£10m) and a case management module (£6m),” it said.
“The Department also spent £31m on licences, £26m on support from suppliers and £50m on hardware, telephony equipment and changes to old systems.”
The report detailed some of the payments made to technology giants for their role in the installation of the technology to run the UCS programme. Unsurprisingly, and against the government's mantra of spending with SMEs, huge sums have been paid to traditional vendors.
BT received £16m for telephony services, HP was paid £49m for hardware and legacy systems software and contractors. Meanwhile IBM was paid £75m for software design and development and Accenture a whopping £125m for similar work.
Despite the stinging criticism from the NAO, the DWP defended the project and claimed it was making improvements to its IT systems.
"The report does not cover the significant developments we’ve made since April including the go live [of the Universal Credit Scheme] in Greater Manchester, our progress on the IT challenge, the latest plans for expansion from October, or the fact that we brought in two of the country’s leading project management experts to lead Universal Credit," a spokesperson said.
The review is just one of many from the NAO criticising the government's technology spending. Earlier this year it slammed the Broadband Delivery UK framework for failing to generate competition or guarantee it was securing value for money.
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