A proliferation of incompatible IT systems has contributed to the overpayment of £1.1 billion in benefits and the underpayment of a further £500 million, according to the National Audit Office.

A new report, Minimising the cost of administrative errors in the benefit system, highlighted the scale of the problem.

Launching the report, Amyas Morse, head of the National Audit Office, said: “The Department is clearly committed to reducing the cost of administrative error and it is frustrating that there has been no discernible reduction since 2007. Progress will depend on developing a better understanding of the costs and benefits of different interventions, so that they can be targeted more effectively and are able to achieve a significant reduction in the cost of administrative error.”

According to the report by the official public sector auditor: “The Department has approximately 140 core processing systems and many of the computer systems are relatively old and standalone, such that they are difficult to update and information is not readily accessible between the different systems.

“Even relatively small changes to systems can be problematic,” it added.

In a remarkable sign of the depth of the problem, the NAO asked the Department for Work and Pensions (DWP) to consider the feasibility of double-keying data being inputted.

Double keying, or rekeying of data is something most businesses are desperate to eliminate, and it was something the DWP used to do a decade ago as a way of checking accuracy of inputted data.

However, the DWP told the NAO that the changes required to allow rekeying of data “would be complex and the feasibility work to provide even a rough estimate of costs would be significant”.

The NAO noted: “Benefit processing systems are not designed in a way that allows simple changes to the screen display. To add a screen field would require significant work to ensure the processing code understands the messages being keyed in. Without these routine validation checks on the accuracy of data input, there remains the risk of transcription or typographical error.

“The department continues to work on system ‘fixes’ but until it is able to develop a solution to enable integration of its processing systems, the overall impact on administrative errors is likely to be limited. The planned implementation of Universal Credit may provide an opportunity to minimise manual intervention and improve integration.”

The NAO carried out a series of workshops, focus groups and interviews with the department staff to pinpoint their concerns, with IT leading the list in the auditors’ report. It stated:

  • 'Different computer systems were used to process benefits but they did not communicate well with each other.
  • Training was considered inadequate – learning and development for new staff was criticised for poor delivery; training facilitators lacked technical expertise; and training packages were described as being out-of-date, incomplete and did not mirror the real work.
  • Staff commented that the guidance did not always give them the help needed to get things right. Support for staff was not always readily available when they encountered problems.'

Despite this the NAO said that some efforts to identify and correct error have proved successful.

Data matching, in particular, has proved cost effective, according to the report. “Data matching activities provided the best return,” and an internal DWP report “suggested that the department could make better use of its data to prevent error, and that improving IT systems could bring about a step-change in performance,” the NAO stated.