The Department for Work and Pensions (DWP) is heading for 'meltdown' as it fails to deliver its biggest reform projects.
The shock finding is included in a report to be published next week by the public accounts committee of MPs, which covers the government's relationship with its private sector contractors.
More than half of public spending now goes through private companies, but they are not subject to freedom of information (FoI) laws meaning failures are never properly explained.
The committee, which is headed by Labour MP Margaret Hodge, believes the DWP is particularly struggling and must stop hiding behind "commercial confidentiality" as an excuse for hiding information on its many problems.
Some companies with multiple public contracts - including Serco, Capita, G4S and Atos - have agreed to release information on their public contracts, but the DWP has resisted this, meaning the public is unable to scrutinise them.
This backs up the suggestion that outsourcing is often less about efficiency, cost and private sector know-how and more about ministers distancing themselves from responsibility for their policies and departments.
DWP has been particularly bad at managing firms, with three major contracts - Universal Credit IT development, Personal Independence Payment delivery and back-to-work scheme the Work Programme - failing to meet targets.
Universal Credit in particular has seen the write off of millions of pounds, money lost to the public purse forever at a time when the government is cutting money from benefit claimants.
Hodge pointed the finger at issues with Iain Duncan Smith's leadership, saying:
"Time and again when we see failures ... it's a failure of government to manage contracts. [Departments] simply have to up their game and get a grip.
"All their programmes are on the verge of meltdown."
Universal Credit in particular had been "appallingly handled" she said.
A report on Personal Independence Payments by the National Audit Office claimed that they would cost three times more to administer than the scheme they replaced, while an internal review leaked from within DWP on Monday said that welfare reforms could not be delivered properly because of cuts to the department.