06 September 2006 | Rebecca Ellinor

The Department for Work and Pensions today confirmed it has scrapped an IT system designed to streamline the processing of benefit payments.

But it refused to state the cost of axing the £138.5 million programme and instead claims that it has saved public money by halting its development.

"If we had carried on with this programme, it would have cost a huge amount more," a spokesman told supplymanagement.com

"Here is a programme where we took a rigorous approach in applying best practice, in terms of constantly reviewing programmes, to make sure they are working and efficient. We conducted an internal review, it wasn't someone from the outside telling us to look at it."

He said the review was carried out because "some technical issues had started to arise and because the overarching priorities of welfare reform had changed".

"As a result of that, we took the decision that we would formally close the Benefits Processing Repayment Programme," he said.

The "technical issues" refer to problems with the development of the IT system and "changed priorities" refer to a new benefit introduced in the welfare reform green paper - the Employment Support Allowance or ESA. The spokesman said processing the ESA would not be compatible with the system under development.

He added that not all the money was wasted because certain parts of the programme would continue to be developed.

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