10:35

The open letter from the National Audit Office to Esther McVey, the work and pensions secretary, amounts to a remarkable rebuke. The NAO regularly publishes reports highlighting problems with government policy, but those reports are agreed with the relevant departments (meaning criticisms tend to be relatively muted) and it almost never personalises matters (identifying particular ministers for blame).

Yet the open letter from Sir Amyas Morse, head of the NAO, accuses McVey of wilfully misleading parliament. This is against the ministerial code and by rights it ought to be a sacking offence. (Damian Green lost his job as first secretary of state for less.) McVey will almost certainly be called to the Commons to explain herself, but don’t assume she will definitely have to go. Ultimately the prime minister decides what to do with ministers accused of breaking the ministerial code and, with everything else going on at the moment, a ministerial resignation is probably the last thing May wants.

But this is serious. In his letter Morse describes McVey as a repeat offender. He says he is publishing his open letter because, when he wrote to her with concerns about what he was saying about the NAO’s recent report on universal credit, she repeated some of her misleading claims during DWP questions in the Commons on Monday.

Morse says McVey misled MPs in three respects.

1 - McVey said the NAO report did not take account of the most recent changes to universal credit, when it did. Morse says the report was “fully agreed with senior officials in your department” and that it was “based on the most accurate and up-to-date information from your department”. But McVey said on 15 June that it did not take account of recent changes, and she repeated this claim in the Commons on Monday. Morse says it is “odd” she felt able to say this.

2 - McVey said the NAO wanted UC to be rolled out more quickly, even though that was wrong. On Monday McVey told MPs: “[The report] says that it needs to continue to go forward and it needs to continue at a faster rate.” Morse says this is “not correct”. He goes on:

While we recognise regrettable early delays to universal credit, my recommendation made clearly on page 11 of the report is that the department must ensure it is ready before it starts to transfer people over from previous benefits.

3 - McVey said the NAO said universal credit was working, when it does not accept this interpretation. Morse says:

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 departments’ customer service, 40% of them said they were experiencing financial difficulties, and 25% said they couldn’t make an online claim.

I’m handing over to my colleague Peter Walker now. I will be back after lunch.