Parliament’s Public Accounts Committee (PAC) has said the Department for Work and Pensions (DWP) needs to upgrade its IT systems to overcome problems in paying the state pension.
It has published a report on the underpayment of pensioners – particularly widows, divorcees and women who rely partly on their husbands’ pension contributions – that includes an emphasis on the failures of legacy systems to ensure a smooth process.
This comes after the National Audit Office issued a report in September that was critical of the DWP’s performance and highlighted the underlying shortcomings of IT systems.
The PAC report says the payment system is not fit for purpose, with an underlying Pension Service Computer System that dates back to 1988 and needs to be accompanied by manual processes. This has been made worse by the adding of new functionality and the introduction of additional systems – so that case workers now need to access four – that have themselves become out-of-date.
This has created a complex process that is prone to human error in the transfer of data and makes it difficult for DWP to monitor the risks.
In addition, customer information in the legacy system is difficult to obtain, taking several weeks to scan, and demographic data such as income distribution or ethnic background is not available. This makes it impossible to identify whether particular groups are more vulnerable to administrative errors.
Need for improvements
In response, the PAC recommends the department should urgently consider whether there are cost-effective ways to upgrade its IT systems and improve administrative processes to ensure the quality and timeliness of management information and reduce the risk of repeated errors.
In prioritising what IT infrastructure to upgrade, it should factor in the opportunity cost of not upgrading old systems, including the cost and errors of underpayments to the citizen.
The report contains a series of other criticisms of DWP, including that it has been complacent about the level of underpayments, it has not given people enough information to assess if they have been underpaid, and that it has often moved experienced staff on correcting the mistakes.
Paying in spades
Chair of the PAC Dame Meg Hillier MP said: “For decades DWP has relied on a State Pension payment system that is clunky and required staff to check many databases, and now some pensioners and the taxpayer are paying in spades.
“Departments that make errors through maladministration have a duty to put those it wronged back in the position they should have been. In reality, DWP can never make up what people have really lost, over decades, and in many cases it’s not even trying. An unknown number of pensioners died without ever getting their due and there is no current plan to pay back their estates.
“DWP is now on its ninth go at fixing these mistakes since 2018, the specialised staff diverted to fix this mess costing tens of millions more to the taxpayer and predictable consequences of delays in new pension claims. And there is no assurance that the errors that led to these underpayments in the first place will not be repeated in the correction exercise.
“This is a shameful shambles. The PAC expects DWP to set out the step changes it will make to ensure it is among the last.”
Image from iStock, Galeanu Mihai
