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Lord Freud: Universal Credit £40 Million IT Write-Off ‘Deeply Regrettable’

Speaking in the House of Lords, Welfare Reform Minister Lord Freud described the write-off of a failed £40 million IT system as “deeply regrettable”.

He also insisted that the decision to “reorganise” Universal Credit, which led to the government’s flagship welfare reform being ‘reset’, was taken by the Secretary of State for Work and Pensions, Iain Duncan Smith MP.

Lord Freud told peers:

“We all know that, when you have a £2.5 billion programme with a high IT content, there are elements that you write that you do not need.

“In the private sector that can be a third of a programme. Clearly, any write-off is always deeply regrettable, but one has to put those things into a context.

“We remain within our budget of £2.5 billion — not £12 billion — and we are looking at an overall net benefit of £35 billion from this programme. The NAO (National Audit Office) has said that it is taking a regular interest in the programme; we will continue and will see more reports on it from the NAO.

“However, as regards the way in which we are doing it, it is somewhat misleading to think of this as a twin-track system, because we have a single plan for universal credit.

“We are finding what works through the rollout we have; it may be small, but you do not need huge numbers to find out what works. It is important that we do this testing.

“At the heart of the programme is what we call the “test and learn” process, in which we take what is happening and assess and measure it against other things, aiming to find out how it works. That informs what we call the end-state build, which is thoroughly under way and is in agile.

“The first Warrington programme was trying to be agile, which I think is the best way; this end-state solution — the fully digital one, the interactive digital one — is being done on an agile basis.

Lord Freud also commented on Universal Credit being classed as ‘reset’ by the Major Projects Authority:

“What does reset mean? What happened, as noble Lords will remember, is that Ministers, the Secretary of State in particular, took a decision that the programme was not going properly and took a view to stop it and reorganise it — reset it.

“It is not a new category; it is a description of a process. If one is in charge of a programme, rather than blundering on with it regardless, I would hope noble Lords would agree that it is the job of the Ministers in charge to take that kind of decision, work out how to rebase it — reset it — and make sure it is done safely and securely, which is what we are aiming to do. That is everything that we are doing.”

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