Select Committee on Work and Pensions First Report

3  Overall assessment

15. We remain cautious about this request for Section 82 expenditure. When we took evidence from those DWP officials involved in the project they gave an account of their expertise in carrying through projects of this type.[18] However, as the Comptroller and Auditor General observes, there is considerable uncertainty inherent in the early stages of a major IT project, for example:

  • "The actual extent to which existing [computer] code can be reused may be greater or lesser than [assumed] which may result in the actual costs incurred during development being more or less than estimated."[19]
  • "While Pension Credit is the most recent, relevant project to which Employment and Support Allowance can be compared, there can be no guarantee that the out-turn of the two projects will correspond in profile as assumed."[20]
  • "If development of the new IT system turns out to be more difficult than the Department currently expects, this could have a knock-on effect on the costs of the whole project and could also threaten delivery by the target date."[21]

16. We do not believe that there are grounds for the House to reject this request for Section 82 approval. The ESA is an important new benefit and we do not wish to stand in the way of measures that we are told by DWP will ensure its orderly and timely implementation. However our cautious approval has caveats. We asked in our previous Report for a detailed out-turn Report, and we will study this closely. We reserve the right to ask the officials concerned to come back before us if we are not satisfied and it is within our purview to seek a debate on the floor of the House as part of an Estimates Day if we are unhappy with the way the authorised expenditure has been used. We also intend to keep a watching brief on the ESA project as a whole as it proceeds, as we have considerable concerns about the 8% increase in total estimated project costs that has already taken place.

17. We stated in our last Report that we would at this stage recommend whether the debate on the final Report should take place in a Delegated Legislation Committee or on the floor of the House. We recommend that the debate on this final Section 82 Report takes place in a Delegated Legislation Committee. We hope that the membership will include at least two members of the Work and Pensions Committee.

18   Work and Pensions Committee, Fifth Report of Session 2005-06, Power to incur expenditure under Section 82 of the Welfare Reform and Pensions Act 1999: new Employment and Support Allowance IT System, HC (2005-06) 1648, para 55 Back

19   Appendix 2, para 7 Back

20   Appendix 2, para 8 Back

21   Appendix 2, para 10 Back

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