Work and Pensions Secretary Iain Duncan Smith has defended the Government's flagship Universal Credit scheme and insisted the programme would be delivered on time and in budget.
He said problems highlighted in a damning report by public spending watchdog the National Audit Office (NAO) were "historic" and he had intervened to sort them out. "It is working, and the plan is that we will roll it out within the timescale," he said.
The report said the project Mr Duncan Smith has championed had been beset by "weak management, ineffective control and poor governance".
Universal Credit is due to replace a bundle of means-tested benefits by 2017, with the department estimating it will save £38 billion in administration, fraud and error costs by 2023. It is also designed to encourage people to take up work by ensuring they will always be better off having a job.
However, pilots have been scaled back and delayed, and a former Olympics executive was drafted in earlier this year to "reset" the programme.
The NAO said the Government had not achieved value for money on its spending up to the end of April. Of the £303 million spent on IT, £34 million had been written off and the systems still had "limited functionality".
"Throughout the programme the department has lacked a detailed view of how Universal Credit is meant to work," the report said. "The department was warned repeatedly about the lack of a detailed 'blueprint', 'architecture' or 'target operating model' for Universal Credit.
"Over the course of 2011 and the first half of 2012, the department made some progress but did not address these concerns as expected. By mid-2012, this meant that the department could not agree what security it needed to protect claimant transactions and was unclear about how Universal Credit would integrate with other programmes. These concerns culminated in October 2012 in the Cabinet Office rejecting the department's proposed IT hardware and networks."
The auditors found the IT system could not identify potentially fraudulent claims, meaning manual checks were needed on claims and payments. "Such checks will not be feasible or adequate once the system is running nationally," they added.
NAO head Amyas Morse said: "The department's plans for Universal Credit were driven by an ambitious timescale, and this led to the adoption of a systems development approach new to the department. The relatively high-risk trajectory was not, however, matched by an appropriate management approach. Instead, the programme suffered from weak management, ineffective control and poor governance. Universal Credit could well go on to achieve considerable benefits if the department learns from these early setbacks and puts realistic plans and strong discipline in place for its future roll-out."