Esther McVey has been forced to issue an embarrassing apology to MPs after a public row with Whitehall's spending watchdog.
The Work and Pensions Secretary said she had "inadvertently misled" the Commons by claiming that the National Audit Office (NAO) had called for the roll-out of the Universal Credit benefit to be accelerated.
But she defended her claim that a highly critical NAO report had failed to take into account recent changes made to the flagship benefit.
In a highly unusual step, the head of the NAO publicly rebuked the Cabinet minister over her response to its report.
In an open letter to Ms McVey, Auditor General Sir Amyas Morse said elements of her statement to Parliament on the report were incorrect and unproven.
He said it was "odd" that she had told MPs that the NAO report did not take into account the impact of recent changes to the administration of the welfare benefit, when it had in fact been "fully agreed" by senior officials at the Department for Work and Pensions only days earlier.
A Downing Street source said Prime Minister Theresa May continues to have full confidence in Ms McVey as Work and Pensions Secretary.
In its report on June 15, the NAO highlighted the hardship caused to claimants by delays in receiving payments under UC.
It concluded that the new system - being gradually introduced to replace a number of benefits - was "not value for money now, and that its future value for money is unproven".
Quizzed about the report's findings in the House of Commons on July 2, Ms McVey told MPs it was "unfortunate that the NAO was unable to take into account the significant changes recently implemented in Universal Credit" which addressed "many of the concerns" raised in its report.
Despite the report's recommendation that the programme should not be expanded until it was clear it could cope with additional claimants, Ms McVey said the NAO had expressed concern that UC was "rolling out too slowly" and should "continue at a faster rate".
In his letter, Sir Amyas told Ms McVey: "Our report was fully agreed with senior officials in your Department. It is based on the most accurate and up-to-date information from your Department. Your Department confirmed this to me in writing on Wednesday June 6 and we then reached final agreement on the report on Friday June 8.
"It is odd that by Friday June 15 you felt able to say that the NAO 'did not take into account the impact of our recent changes'.
"You reiterated these statements on July 2 but we have seen no evidence of such impacts nor fresh information."
Sir Amyas added: "Your statement on July 2 that the NAO was concerned Universal Credit is currently 'rolling out too slowly' and needs to 'continue at a faster rate' is also not correct."
Ms McVey returned to the Commons on Wednesday to issue her apology.
"I mistakenly said that the NAO had asked for the rollout of Universal Credit to continue at a faster rate and to be speeded up.
"In fact, the NAO did not say that."
She added: "What I meant to say was that the NAO had said that there was no practical alternative to continuing with Universal Credit."
But she stood by her claim that the NAO had not been able to examine the impact of recent changes.
"The impact of these changes are still being felt and therefore, by definition, couldn't have been fully taken into account by the NAO report," she told MPs
Shadow work and pensions secretary Margaret Greenwood said Ms McVey was either "incompetent" or had lied to MPs and should quit.
She said: "The NAO report is damning about the roll-out of Universal Credit, the Government's flagship welfare programme.
"If she didn't read it properly, that's incompetence. If she did read it properly and knowingly misled Parliament, then she should resign."
Mark Serwotka, the general secretary of the PCS public service union, said: "The apology from the minister will do nothing to convince those using Universal Credit, or our members who administer it, that the scheme works.
"The fact that the Auditor General has felt the need to make a public statement that the minister's claims that Universal Credit is working are not 'proven' is a damning indictment.
"Our members want to work in a humane social security system which helps claimants get the support they need. All the evidence shows Universal Credit will not achieve that and that's why the Government must cease its roll-out."
AMYAS MORSE'S REBUKE OF ESTHER MCVEY IN FULL
Here is Auditor General Sir Amyas Morse's letter to Work and Pensions Secretary Esther McVey.
I wrote to you on 27 June asking to meet to discuss my report on Universal Credit and your comments, but I have not yet been able to see you. Following your second set of statements in the House about the report I am now reluctantly writing an open letter to you to clarify the facts.
"Our report was fully agreed with senior officials in your Department. It is based on the most accurate and up-to-date information from your Department. Your Department confirmed this to me in writing on Wednesday 6 June and we then reached final agreement on the report on Friday 8 June. It is odd that by Friday 15 June you felt able to say that the NAO "did not take into account the impact of our recent changes". You reiterated these statements on 2 July but we have seen no evidence of such impacts nor fresh information.
I'm afraid your statement on 2 July that the NAO was concerned Universal Credit is currently "rolling but too slowly" and needs to "continue at a faster rate" is also not correct. While we recognise regrettable early delays to Universal Credit, my recommendation made clearly on page 11 of the report is that the Department must now ensure it is ready before it starts to transfer people over from previous benefits. This will avoid the Department's performance declining further as it faces higher claimant volumes. I also recommended the Department learns from experiences of claimants and third parties, as well as the insights it has gained from the roll-out so far.
I'm also afraid that your statement in response to my report claiming Universal Credit is working has not been proven. The Department has not measured how many Universal Credit claimants are having difficulties and hardship. What we do know from the Department's surveys is that although 83% of claimants responding said they were satisfied with the Department's customer service, 40% of them said they were experiencing financial difficulties, and 25% said they couldn't make an online claim. We also know that 20% of claimants are not paid in full on time and that the Department cannot measure the exact number of additional people in employment as a result of Universal Credit.
I would still very much like to meet to talk about the report and to discuss the independent investigation we are currently undertaking on Motability, a matter that I know is important to you.
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