Stormont gets burned again: Executive faces £18m bill for welfare reform assessment which may never be carried out

As the Executive sits down for its 'Black Thursday' crunch meeting after it was ordered to thrash out an urgent £200m cuts plan, yet more bad news emerged.

The Belfast Telegraph can reveal that an £18m contract agreed with a private company to assess benefits claimants must be paid – even though the work may never be carried out.

New Personal Independence Payments (PIPs) were supposed to replace Disability Living Allowance (DLA), but because welfare reform hasn't happened in Northern Ireland, the company – Capita – has no one to assess.

The news comes after the Treasury issued a stark warning to the Executive to make 6% in cuts by the end of the month, or it will order civil servants to take over the running of our economy instead.

Labour Party leader Ed Miliband yesterday joined the chorus calling for ministers to implement welfare reforms and avoid Treasury penalties. While he said Labour would abolish the so-called bedroom tax, Northern Ireland would have to press on with other reforms.

"The government in Northern Ireland has to continue its work getting on with the process of welfare reform, but obviously we'll be making some changes if we win the election in May 2015," he said at his party conference in Manchester.

Meanwhile, in a grim prediction, Justice Minister David Ford claimed that hundreds of serving PSNI officers will be removed from front-line duties as the cuts bite.

"We are potentially going to see an end to the recruitment of police officers that we restarted earlier this year," he said.

"We are almost certainly going to see a reversal of the policy of the last few years which put police officers out in to active front-line duty and put civilians behind desks.

"Matt Baggott was proud of the fact that 600 to 700 officers were moved from desk jobs to front-line policing. Potentially we are going to completely reverse that – and maybe make it even more.

"If we are facing this potential figure of £200m, that is the kind of issues that are going to happen."

Some of those cuts could be decided today at a key Executive meeting.

With £200m to be saved between now and April, the news that another £18m may have been thrown away will further undermine public confidence.

When the contract with Capita was put in place, it was assumed that the Welfare Reform Bill would be passed by the Assembly. But the legislation is being blocked by Sinn Fein, and the Department of Social Development (DSD) is contractually bound to pay Capita regardless.

A DSD spokesperson refused to comment on the precise value of the contract, saying it was in confidence. However, the precise figure has been revealed to ministers.

The spokesperson added: "A contract is in place with Capita Business Services Ltd to carry out the new Personal Independence Payment assessments.

"However, as welfare reform has not been implemented in Northern Ireland, the company is not yet delivering services to the agency.

"Should the Executive decide not to implement welfare reform then the commercial consequences will need to be addressed."

The changeover from DLA to PIPs is a major undertaking and could have created chaos if it was not planned for.

In Britain, PIPs became available for new claimants in June last year and would potentially affect one in 10 of Northern Ireland's working-age population because of the high rates of disability.

Sinn Fein has proposed an election on the cuts issue and there are fears that some of the smaller parties may pull out of government altogether if their departments are forced to bear the brunt of them.

In the last round of cuts in June, the two biggest-spending departments were ring-fenced. They were health, which is now held by the DUP's Jim Wells, and education, held by John O'Dowd of Sinn Fein.

"If that is repeated again this month, the remaining departments will be drained of funds," one source said.

"In those circumstances, people in the smaller parties would have to consider whether they were prepared to continue to serve as ministers."