DWP spending on IT contractors rockets amid Universal Credit delays

By Chaminda Jayanetti

Spending on external IT contractors by the Department for Work and Pensions has rocketed to £8m every month in a desperate attempt to get the heavily delayed Universal Credit scheme back on track.

Monthly workforce figures published by the DWP show that departmental spending on “specialist contractors” has more than doubled in just eight months, reaching £8,272,817 in April this year.

Specialist contractors are people temporarily hired from outside to work on a short-term basis as non-payroll contractors rather than employees.

According to the DWP they are working on its IT projects, with their numbers rising due to the department’s need for specialist skills in rolling out its “Digital Transformation Programme”, related to the troubled Universal Credit benefit scheme.

In just over two years the number of specialist contractors working for the DWP has risen from below a hundred in March 2014 to a record high of 556 this April, the most recent month for which data is available – with the cost to the taxpayer increasing almost six-fold.

DWP contractors

During that same two-year period the number of frontline staff fell by more than ten percent before recovering slightly in the first months of 2016, while administrative staff numbers have been slashed non-stop. Staffing levels among both categories remain far higher than the number of specialist contractors.

The rise in IT contractors has accompanied delays and cost increases in the roll-out of Universal Credit, the government’s all-encompassing new welfare scheme.

The full roll-out of the scheme was originally meant to be completed next year, but has instead been pushed back to 2021 at the earliest.

The number of specialist contractors working for the DWP is expected to be stable for the rest of 2016/17 – meaning that the cost could end up at nearly £100m this year, having been just over £60m in 2015/16.

DWP contractors 2

The DWP’s “digital by default” agenda is an extremely ambitious – and difficult – programme to try and encourage people to access benefits and welfare services online rather than in-person or over the phone. Advocates argue this will make those services more accessible, but critics dismiss it as a cost-cutting exercise that is proving more expensive than ever imagined.

The problems affecting the DWP’s digital drive are reflected in the fact that four years after its digital agenda was published, and three years after Universal Credit was launched, the department is still scrambling to hire external contractors to make its programme work.

A DWP spokesperson told Sentinel News: “In order to achieve our Digital Transformation Programme we need specialist skills which cannot be completely filled within government.

“This temporary recruitment is to fulfil business critical roles to support us in the delivery of our welfare reforms while we recruit permanent specialists.”

A spokesperson for the PCS, the trade union representing staff employed directly by the DWP, said: “There is no doubting the size of the task the DWP has in building its digital capacity, but the department urgently needs to share with us its plans for weaning itself off so many external contractors and doing this work with its own staff.

“The change to universal credit has been slow and expensive because the political rhetoric has not been matched by the necessary resources.”

6 thoughts on “DWP spending on IT contractors rockets amid Universal Credit delays

  1. The problem with the DWP is that it has forgotten that it is there to manage work and concurrently, pensions, instead it puts too much focus on managing unemployment.
    Where is the agency given to create jobs, to encourage new business, we never hear of that agency, if there is one.
    Bring on creative minds and energies for new business, please.


  2. In response to Karen, the employment side of things is dealt with through the Work Programme – essentially, the government took the decision to outsource this function entirely to, in the main, private contractors such as Serco and Ingenus. These companies have taken somewhere in the region of £500 million from public funds yet research regularly demonstrates the poor value for me received in return and there’s even been some findings that Work Programme schemes have as much impact as doing nothing at all http://www.telegraph.co.uk/news/politics/9706074/Iain-Duncan-Smiths-Work-Programme-worse-than-doing-nothing.html

    That’s probably why they’re looking to replace it with another scheme, although I imagine it will remain the gravy train that it already is. As for the huge increase in spending under Universal Credit, it illustrates some of the fatal flaws in the original brainchild of IDS and his lack of vision and understanding of the challenge in undertaking such a radical reform.


  3. If you ever study project management, you will inevitably look at examples of failed projects. The most egregious of these are inevitably large government IT projects. Very often, even as they fail, the amount of resources being invested in them sky-rockets in a desperate attempt to rescue them. They usually fail because of “scope creep” and poor communication between the client (the govt) and the project managers.

    An investigative journalist ought to have spoken to some of the contractors to get true picture of the state of the project.


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