Iain Duncan Smith insists welfare reform is not 'a debacle' despite delays and multi-million pound software write-off

The computer system for the flagship welfare reform was not yet ready for couples who make a claim, Iain Duncan Smith, the Work and Pensions Secretary, admitted on Monday.

He also announced that the Government had written off more than £40m worth of software designed for the new Universal Credit, while a further £90m of equipment would be worthless in five years’ time.

In a bruising session with MPs, Mr Duncan Smith said his reforms remained on track despite a series of delays and set-backs.

He denied that the launch of Universal Credit, which is due to replace six benefits and tax credits with a single payment, had turned into a “debacle” and insisted the scheme was “doable”.

It has been introduced for a handful of claimants in the North-West of England and is due to be rolled out across the region by the end of next year.

But MPs on the Commons work and pensions select committee heard that claims by couples had to be handled manually because the computer system could not cope.

It was currently designed for single adults and had not been configured for couples or for claimants with children.

Howard Shiplee, the former London Olympics executive drafted in this year to “reset” the troubled scheme, told the MPs that problems arose if a single claimant met a new partner and moved in with him or her.

“As the potential for claimants to change circumstances, for things to change … the more complicated it becomes.

“Therefore the next stage is to work on couples. That will be a complicated issue. Couples come together, they divide, they have children, things happen.

“This sort of software is not something you get on the back of a cigarette packet. It’s complicated.”

Mr Duncan Smith hit out at “bogus nonsense” published over the money wasted on IT costs, but confirmed that £40.1m of software had already been written off, £6m more than previously stated. Another £90m of software would be used over the next five years, but have no value by 2018.

However, Mr Duncan Smith insisted the scheme’s assets were worth £152m. The Department for Work and Pensions also claims that universal credit could ultimately boost the economy by up to £38bn over ten years by moving claimants off benefits.

The Work and Pensions Secretary disclosed last week that his 2017 target for the full introduction of Universal Credit is set to be missed - with around 700,000 claimants facing a longer wait.

Labour said official figures from the Office for Budget Responsibility showed only a tiny fraction of the numbers due to be using the new system by the next general election in 2015 would be transferred on time.