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Universal Credit IT system ‘vulnerable to fraud’, warn MPs

The project underpinning the government’s welfare reforms has hit a number of challenges

MPs have warned that the implementation of Universal Credit could leave the public sector 'vulnerable to fraud', as concerns are raised about detection systems still being in the early stages of development, despite the national rollout beginning this year.

A report issued by the Communities and Local Government Committee is the latest setback for the government's flagship £500 million IT project, which has experienced a number of challenges in recent months.

Universal Credit will merge benefits such as jobseeker's allowance, income support, housing benefit, child tax credit, and working credit. The IT system supporting the project will require real-time data on the earnings of every adult, from a new Pay as You Earn (PAYE) system being developed with HM Revenue & Customs.

However, MPs said that they had heard concerns about the readiness of ICT systems underpinning the reforms, "specifically that the systems for fraud detection within Universal Credit were still at early development even though implementation is now advanced".

Over the years local authorities have developed advanced independent detections systems to tackle benefit fraud, and the report highlights that some councils are not satisfied that the IT systems supporting Universal Credit will have the same capabilities.

For example, Thanet District Council was concerned that "the system would not work from local authority property databases and so it would not be able to detect automatically, as local systems did now, when multiple individuals made a housing benefit claim for the same property".

MPs were also told that experienced staff, which play a fundamental part in detecting fraud, would be likely to leave their posts before their jobs disappeared because of uncertainty about their prospects.

Waverley Council argued that fraud would increase during the transition period to Universal Credit due to local authorities making staff redundant or moving them elsewhere, removing skills and resources usually allocated to combatting fraud.

The Committee said: "We welcome assurances from the government that the new IT system for Universal Credit will incorporate local housing data to enable effective housing benefit fraud detection.

"However, it is worrying that the system still seems to be at the development stage. It is incumbent upon DWP to ensure that its system is read in time for the changes."

It added: "The government should ensure that local authority housing departments are provided with the administrative funding they need to manage the transition to Universal Credit and prevent staff leaving prematurely."

It was revealed yesterday that the Department for Work and Pensions had hired Howard Shiplee, executive director at construction company Laing O'Rourke, to lead delivery on the troubled Universal Credit programme. Shiplee is the fourth person to head up the project in just six months, after a string of temporary hires and departures from the position.

It was also recently revealed that only one of the four planned pilot areas for Universal Credit will go live in April as planned, which has raised doubts about the success of implementation so far and whether timelines will be stuck to.

Ashton-under-Lyne will be the only Jobcentre in the country to trial the new system from 29th April, with Wigan, Warrington and Oldham only going live in the beginning of July. A progressive national rollout is planned from October, with the project due to complete by 2017.

Computerworld UK also revealed last month that although DWP had originally planned to roll out all of the technology to these pilot areas to calculate claimants' Universal Credit benefit, sources close to the project have said that Job Centres will actually be manually carrying out the final calculations.

A claimant will only be able to book an appointment at a job centre in the selected areas using the new system, but when they come to claim Universal Credit in person, the calculations of the benefit will be carried out on spreadsheets.


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