Work and Pensions Secretary Iain Duncan Smith cravenly tried to bury his latest blunder during attacks on welfare yesterday under cover of the Chancellor's autumn statement.

As George Osborne prepared to take to his feet in the Commons, Mr Duncan Smith admitted that an estimated 700,000 disability benefit claimants will not be transferred to the new universal credit before 2017.

The Department for Work and Pensions (DWP) said that those on employment and support allowance will continue to receive the current service and, if appropriate, will be helped back to work by job centres.

Those unable to work due to long-term conditions will not be transferred to universal credit, the department said.

It was the latest in a string of hugely embarrassing failures for the Work and Pensions Secretary.

The National Audit Office has slammed Mr Duncan Smith for gross failures in IT and universal credit's implementation.

In September the body said that the programme suffered from "weak management, ineffective control and poor governance" and could miss its 2017 deadline for implementation.

Mr Duncan Smith had repeatedly denied there were problems with universal credit.

Yesterday's admission came as he outlined the next stage of the roll-out of the new benefit across north-west England.

In a statement to MPs, Mr Duncan Smith said the DWP would continue to develop the IT systems supporting universal credit.

Shadow work and pensions secretary Rachel Reeves said: "On the morning of the autumn statement this is yet another shambolic announcement from this out-of-touch government.

"Iain Duncan Smith has today admitted what everyone has known for months - that universal credit is massively behind schedule.

"But just a couple of weeks ago he was telling Parliament the government would 'roll out universal credit on the plan and programme already set out.'

"It's clear that David Cameron and Iain Duncan Smith have completely failed to get to grips with their flagship welfare reform and millions of pounds of taxpayers' money have been written off as a result."