Work department 'lacks clear plan'
A powerful spending watchdog has raised concerns about Whitehall's ability to introduce fundamental reforms of the welfare system while cutting departmental running costs.
Under the Government's deficit reduction plans, the Department for Work and Pensions (DWP) has to find savings of £2.7 billion by March 2015.
It plans to meet half of that by the end of this financial year but the cross-party Public Accounts Committee (PAC) raised fears the department "lacks a clear plan" to deliver the target.
Although officials told the committee they were "confident" the changes could be delivered effectively, the PAC warned of "high-risk" areas that could thwart that ambition. It cites the plans to introduce a Universal Credit - merging a number of benefits into a single payment - which it said was dependent upon new IT services.
The committee also warned that the department was assuming running costs reductions "from an optimistic expectation" that 80% of job seekers would use online services when less than a fifth do now.
It said any delay in either area was "likely to impact on planned cost reductions". There are also insufficient contingency plans in place if reforms do not go to plan, the report said.
Margaret Hodge, who chairs the PAC, said: "The department does not yet have a clear plan for delivering these savings and we are concerned about its ability to do so effectively. The transition to Universal Credit, for example, will depend heavily on the development of a new IT system with HM Revenue and Customs to a very tight timetable.
"This committee's experience is that such projects are rarely delivered to time, budget and specification, and any delays could put the department's ability to deliver savings at risk."
A DWP spokesman said: "Our commitment to securing cost reductions is clear. We've already exceeded the target set in the June 2010 Budget to reduce our running costs by £535 million in 2010/11 and we have a transformation programme in place to make sustainable cost reductions over the rest of this Parliament.
"We've learned from our experiences in the past in delivering IT services and Universal Credit will be delivered on time in 2013. We will respond formally to the PAC report in due course."