Iain Duncan Smith. Photo credit: Brian Minkoff - London Pixels / Foter / CC BY-SA

The Government must use the “hard lessons” it learnt from welfare reforms which caused “significant financial and human costs”, says the National Audit Office (NAO).

In a new report published today, the NAO criticised the Department for Work and Pensions (DWP) “important and high profile failings” in implementing an unprecedented number of welfare reforms and employment programmes.

The report says the Government “relied too heavily on uncertain and insufficiently challenged operating assumptions, and did not have a sufficient understanding of its portfolio of programmes or overall capacity.”


It adds that the DWP has a “high-level vision but needs to think more strategically when considering how reforms will work in practice.”

“The Department has thought too late about the management information and the leading indicators it needs to understand progress and performance”, says the NAO. “This meant the Department took several weeks to identify backlogs in Personal Independence Payment claims.”

Auditors credited the Government for responding well “to uncertainty”, but added that it “should be able to set out plans with specific timetables, costs and impacts and reflect where flexibility is needed.”

“They should also have clear processes for revising plans against changing circumstances or expectations”, says the NAO.

The NAO criticised the DWP’s initial handling of the Universal Credit. The NAO says the department “held too rigidly to fixed deadlines and now has adopted a more flexible approach. It will need to reconcile this approach with the requirement to monitor progress against milestones.”

In implementing a significant welfare reform programme, the DWP “relied too heavily on reacting to problems and has not been able to anticipate possible failings or establish the principal ways in which performance and progress can be measured”.

The NAO called on the Government to “plan more openly for the possibility of failure, and build an integrated view of portfolio risks and capacity”.


Amyas Morse, head of the National Audit Office, said: “Any large portfolio of reforms will run into problems. The Department has shown a resolute approach to dealing with them. However, we think it has relied too much on dealing with difficulties as they emerge rather than anticipating what might go wrong.

“As a result it has had to learn some hard lessons with significant financial and human costs. It is important that the Department use these hard lessons to improve how it manages change and anticipates risk.”

Gillian Guy, Chief Executive of Citizens Advice, said: The Government must learn from the mistakes of previous changes to welfare.

Citizens Advice has found that delays and problems with the delivery of reforms such as Employment and Support Allowance increased hardship and anxiety for many people.  Last year we helped people with almost two million benefit issues, more than any other type of problem.

“As Ministers look to make further savings from the welfare budget it is important they fully understand the impact proposed reforms have on people’s lives.

The Government must be certain that further cuts won’t just shift costs away from the welfare budget and into other areas such as health and social care.

” Changes to benefits can have a far-ranging impact on people’s lives, so any reforms need to delivered at a safe and steady pace.”