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The Department for Work and Pensions (DWP) plans to get 80 per cent of Jobseeker's Allowance claimants transacting online by September 2013, but has no clear plan of how to achieve this, says the public accounts committee.

In its report titled Reducing Costs in the Department for Work and Pensions (40-page/364KB PDF), the committee says that Jobcentre Plus plans to become a smaller organisation and to rationalise its existing offices to correspond with the increase in online applications.

But by last April only 17 per cent of new claims for Jobseeker's Allowance were made online. The document points out that other parts of government, such as the DVLA, had increased the use of online services, but the DWP is dealing with a different client group.

Data published by the Office for National Statistics in August 2010 said that 31 per cent of the poorest people in the UK do not use the internet, and they will be the DWP's clients.

When the DWP officials gave evidence to the committee, they were not able to explain the basis for the 80 per cent target, but subsequent written evidence says that 86 per cent of Jobseeker's Allowance claimants already use the internet, and 67 per cent have access in their homes.

"Without a detailed plan for meeting the target it is not clear that this initiative will generate sufficient efficiency savings," the committee warns.

The 80 per cent target is a key way in which the DWP intends to cut its running costs by £2.7bn by March 2015. It intends to achieve over half of this reduction in 2011-12.

The report says this is a considerable challenge, particularly at the same time as implementing fundamental reform of the welfare system.

In preparation for the single Universal Credit, the DWP is developing IT by improving existing software in small incremental steps. Although this approach does not require a lengthy and detailed planning phase, and aims to simplify the change process and reduce the risk of missing deadlines, it is likely to have introduced other, as yet unquantified, risks, the committee warns.

Universal Credit needs real-time data on the earnings of every adult, and requires the department to develop a new IT system alongside HM Revenue and Customs' development of its own IT system to provide data on earnings to the DWP.

The two departments intend to have the Universal Credit IT system delivered for testing by April 2013, prior to implementation six months later. Failure to meet this timetable, however, could increase costs and have a knock-on effect on other budgets and cost reduction plans, the report warns.

Margaret Hodge, chair of the committee, said that the transition to Universal Credit will depend heavily on the development of a new IT system with HMRC 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," she said.

Commenting about the overall savings target, Hodge said that the DWP "does not yet have a clear plan for delivering these savings and we are concerned about its ability to do so effectively".

This article was originally published at Guardian Government Computing.

Guardian Government Computing is a business division of Guardian Professional, and covers the latest news and analysis of public sector technology. For updates on public sector IT, join the Government Computing Network here.

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