Driver said that the remaining IT assets will now be written off over a five-year period, as opposed to the 15-year period that the department had originally planned. He said that the 15-year period "was too long" and he was talking to the National Audit Office (NAO) about how DWP could apply accounting practices going forward.
Taxpayer, not the IT supplier, carries the risk
When Shiplee was asked by MPs why penalty clauses had not been included in the contracts, to impose fines on the suppliers if they failed to deliver on targets, he said: "You would find it very hard to find vendors in the market place to do this work at full risk. So the department took up the risk."
The DWP also took most of the blame for write-offs and writing down of assets, Shiplee said. The code that had been produced was of good quality, he said, but it didn't reflect the needs of the project anymore because the specifications had changed so much.
"This software isn't something that gets done on the back of a cigarette packet, it's very complicated," said Shiplee.
However, DWP is now looking at how the suppliers can take some of the risk.
"There's no perfect contract - [but] we are doing some early work, while we agree what we want them [the suppliers] to do, on getting a fixed price or target cost arrangement, which will put a reasonable amount of risk on the suppliers," said Shiplee.
He said that this will be happening early in the New Year.
Universal Credit is not digital by default
Shiplee also told the committee that although the digital by default "mantra" was adopted as an approach at the beginning of the Universal Credit project, this "went away a long time ago".
He believes it would be "inappropriate" to use this approach and that it would "take some time to get totally online".
"There's nothing wrong with having an aspiration, but perhaps it was an aspiration too far at the time," he said.
According to Duncan Smith and Shiplee, a totally online and digital approach failed because of the security implications. They told the committee that Universal Credit needed to replicate practices in the banking industry, where when details needed to be verified, people have to go and present themselves in a branch.
However, MPs were told that the second generation Universal Credit system was being built for smartphones, as the pathfinder revealed that this is how people were mostly interacting with the service.
DWP is also planning, it was revealed, to move couples onto Universal Credit in the New Year, with children and families joining the new system in the autumn. At present Universal Credit can only handle the simplest of claims from single applicants.
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