IBM and Accenture have proposed to create 500 new developer roles in the UK and India for work on the Department for Work and Pensions’ Universal Credit system.

The outsourcing contract, worth £525 million, is expected to be carried out next year and by having some of the development work done offshore, the DWP expects to save "both cost and time", but has created controversy.

Paul Macpherson, from the department's Universal Credit Design Technology, stated: "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. We are looking to maximise the use of offshore development in the interests of both cost and time.”

DWP also defended the decision as they insisted that no existing jobs in the UK are being sent overseas under the plans and are exploring how previously off-shored could be moved back to the UK.

The Universal Credit system will unify all current means-tested benefit systems to create one, single income-replacement benefit for all working age adults.