Delays in processing the Government’s new Personal Independence Payments (PIPs) has led vulnerable people facing ‘real distress’ and financial difficulties, according to a damning new report.

A report from the National Audit Office found that the new system had led to a backlog and delay in processing claims, which is costing over three mores time to administer than the previous allowance.

It also said the Department for Work and Pensions had failed to test if it could handle a large volume of claims when it introduced the new system in April 2013.

The report found that by October 2013, the department had only made 16% of the decisions it had expected to finalise. As a result, claimants are experiencing long delays to benefit decisions, with 92,000 people having outstanding claims in October 2013.

Amyas Morse, head of the National Audit Office, said today: ‘It is too early to conclude on the Personal Independence Payment programme’s overall success and all major programmes run the risk of early operational problems. However the Department did not allow enough time to test whether the assessment process could handle large numbers of claims.

‘As a result of this poor early operational performance, claimants face long and uncertain delays and the Department has had to delay the wider roll-out of the programme. Because it may take some time to resolve the delays, the Department has increased the risk that the programme will not deliver value for money in the longer term.’

Margaret Hodge, chair of the Committee of Public Accounts, said she was ‘shocked’ to learn of the report’s findings: ‘I was shocked to learn that, not only will Personal Independence Payment claims cost almost three and half times more to administer than Disability Living Allowance, they also take double the amount of time to process.

‘The current backlog and delays in processing claims are simply unacceptable and will no doubt cause real distress for vulnerable claimants. Without the Department for Work and Pensions sharing details of how long claims should and do take, claimants are left facing uncertainty and potential financial difficulties whilst waiting for a decision.

‘Once again we see the Department under-performing - and we have little faith that costs will not increase down the line as it tries to get things under control.’

The watchdog is calling on the DWP to set out a clear plan for informing claimants about the likely delays while it works with providers to improve performance.