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Universal Credit IT system could lead to MORE FRAUD, MPs warn

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The number of benefit cheats in the UK could rise thanks to yet more IT problems with the government's new Universal Credit system, MPs warn.

A communities and local government committee report published on Wednesday cast more doubt over the "readiness" of the Department for Work and Pensions' Universal Credit system - which aims to overhaul Britain's dole office by merging six benefit handouts into one regular payment that can be claimed and managed online.

The massive welfare overhaul is due to go fully live by October 2013.

Rounds of testing in four job centres were supposed to start this month, but that plan has now been scaled back. Ashton-under-Lyne's dole office will begin accepting claims for Universal Credit on 29 April. Wigan, Oldham and Warrington Jobcentres won't be part of the trial until July this year.

The DWP had previously said [PDF] it needed six months to test the system with the four Cheshire and Greater Manchester dole offices before the national rollout of the Universal Credit system begins this autumn.

MPs are now seeking urgent assurances from the government that the benefit system won't have a fundamental weakness that could be exploited by fraudsters once UC comes in.

The committee's chair Clive Betts said:

We heard evidence that ICT systems for fraud detection within Universal Credit were still at an early stage in their development. This is extremely concerning given the advanced state of implementation.

The government must act to provide assurance that the benefit system will not be left vulnerable to fraud either during or after the transition. And it must do so urgently.

The parliamentary report flagged up concerns from local authorities about the compatibility of their IT systems with Universal Credit.

Thanet District Council told the panel of MPs that it was worried that UC "would not be able to distinguish between genuine and fraudulent claims." Because, as the council understood it, "the system would not work from local authority property databases and so it would not be able to detect automatically, as local systems did now, when multiple individuals made a housing benefit claim for the same property."

The DWP claimed in response to the report that benefit fraud under the Universal Credit system would be cut by £200m a year. A spokeswoman added: "We are confident that our IT systems will be strong enough to protect us from the threat of fraud."

The committee was also told by work and pensions parliamentary under-secretary Lord Freud that a new fraud detection service - dubbed IRIS - was to be built into Universal Credit that would have a "similar database" to that used by councils for spotting housing benefit cheats.

While the MPs welcomed that a fraud detection system would be put in place, they expressed concerns that it was still at the "development stage". The panel warned:

It is incumbent upon DWP to ensure that its system is ready in time for the changes.

The Register asked the DWP to tell us more about the Greater Manchester and Cheshire pilots for Universal Credit - given that only one dole office is set to take the system live at the end of this month. Iain Duncan Smith's department insisted it wasn't behind schedule with testing, however.

Our plan has always been to test Universal Credit in a safe and controlled way during Pathfinder to ensure we get it right for the start of the national rollout in October.

We plan for Ashton-under-Lyne to be the first Jobcentre to accept claims for Universal Credit from 29 April with Wigan, Warrington and Oldham Jobcentres trialling the new Universal Credit claimant commitment on the same date and taking claims for Universal Credit from July.

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