The Department for Work and Pensions (DWP) yesterday signed a seven year contract with IBM to provide application maintenace and support, worth up to £525 million.

The deal sits alongside a similar but smaller agreement with IT services supplier Capgemini.

A DWP spokesperson told Information Age that the headline cost of £525 million was flexible. "There’s no minimum guaranteed level of spending in the contract," the DWP spokesperson said. "[IBM] will be paid for the work they do. As our priorities change, so will the work."

The DWP declined to comment on the split of the 60 applications that IBM will provide under the terms of the contract, but said that they would generally cover anicillary functions such as human resources.

Like Capgemini, IBM implied that the applications in question will support the DWP’s new welfare strategy and the Universal Credit System that underpins it.

However, the DWP made it clear that IBM will have no direct involvement in that project. "We will be using existing contractors for the Universal Credit System itself," the DWP said. "The DWP don’t have any other direct contract with IBM which relate to the Universal Credit System." However, the Department does have three other contracts with IBM worth a total of £430,000 and covering maintenance and support, leased equipment and ‘software’.

The UCS was criticised by the Public Accounts Committee (PAC) earlier this month, when MPs said that the project was overambitious. Of note was the DWP’s projection that 80% of benefits claimants would make claims online by September 2013. The PAC noted that 31% of the poorest people in the UK, presumably the most likely beneficiaries of the benefits system, never use computers.