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Government Outsources Universal Credit IT To India

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined
as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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The DWP signs agreement with Accenture and IBM to establish delivery centres in India

Hundreds of computer technicians in India are to develop an IT system for the government’s universal credit welfare programme, despite promises that large data projects would remain in the UK.

The work, outsourced by the Department of Work and Pensions (DWP), is worth over half a billion pounds and will be carried out ahead of the universal credit programme’s introduction next year.


According to the Guardian, the DWP signed contracts with Accenture and IBM worth £525 million last year, and the two companies will establish ‘delivery centres’ in the Indian cities of Bangalore and Mumbai. Over 500 IT specialists will be hired from the UK and India to help design and maintain the delivery system, according to internal documents.

The government claims that the programme will simplify benefits by merging income-related jobseekers allowance, housing benefit, child tax credits, income support and income-related employment support allowance into a single payment. The plans have been outlined in information published on the DWP intranet by Paul MacPherson from Universal Credit Design Technology.

“I truly believe we have an offshore capability which provides world-class expertise and we are leveraging the best resources Accenture and IBM, in particular, have to offer,” said MacPherson. “We are looking to maximise the use of offshore development in the interests of both cost and time. In relation to cost, the greater the amount of development work we can do offshore, the lower the overall blended rate for the programme. Another benefit of offshore where time is concerned is that we are able to drive more design and development hours from each working day.”

Sparked outrage

However the decision is likely to anger many who believed employment minister Chris Grayling’s pledge to keep his department’s major IT projects in the UK.  India remains a popular destination for services contracts, despite rising costs, as demonstrated by Lloyd’s Banking Group’s decision to move 593 IT positions to the country earlier this month. This sparked anger from the Lloyds Trade Union, which labelled the move “disgraceful”, especially since the group is 40 percent owned by the government.

Last month, the government announced that it was going to allow overseas suppliers to handle certain types of public data on its G-cloud, while the NHS and Computer Sciences Corporation (CSC) reached a £900 million compromise for the American firm to supply IT services despite its contribution to the failure of the £12.7 billion National Programme for IT.

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