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Select committee inquiry

DWP Accounts- Fraud and error in the benefits system

Closed

Public Accounts Committee · Opened 26 August 2021 · Closed 21 January 2022

Inquiry on parliament.uk ↗

What the inquiry looked at

“Fraud and mistakes in benefit payments rose again in 2020-21 to the highest level on record . The need to relax checks to ensure the record number of new Universal Credit claims in the Covid19 crisis could be processed and paid was a major factor in this increase, but the National Audit Office has qualified its opinion on the regularity of DWP’s accounts for 33 years running, due to material fraud and error. DWP has identified four of the largest causes of fraud and error within Universal Credit that it needs to tackle: incorrectly reported self-employment earnings, savings, living arrangements and housing costs. It has also identified several organised criminal attacks during the pandemic, with fraudsters targeting Universal Credit in particular and making claims in other people’s names. The Department is owed £5 billion in benefits overpayments, placing additional strain on its resources and causing uncertainty and hardship to claimants. It is not sure how much of its estimated loss of £8.4 billion in 2020-21 it will recover, as it has attempted to recover only 10% of the estimated loss in the last 5 years. DWP estimates that 132,000 pensioners have been receiving less State Pension than they are entitled to due to ongoing control failings. The Department has now set aside £1 billion to reimburse people who have been underpaid their State Pension over the past 30 years. The Committee will return to the issue of state pension underpayments in a later inquiry. The Committee will question senior officials at DWP. If you have new evidence on fraud and error in the benefits system, please submit it here by 6pm on Tuesday 7 September 2021.”

The committee's words, from the inquiry page on parliament.uk ↗.

What the government said

The government responded on 21 January 2022. The deadline was 17 January 2022.

Summary written by Accountability Index from the government's response.

The government agrees with some of the Committee's recommendations on fraud and error in the benefits system and disagrees with others, including on annual recovery targets, a six-year plan for Universal Credit overpayments and a review of closed claims.

  • On fraud and error reduction targets, it agrees with the recommendation, with a target implementation date of spring 2022, but will set an overall target only and "will not propose a target for every benefit or risk area".
  • It disagrees that fraud and error was at a record high before the pandemic, saying published statistics show the rate "was falling prior to the pandemic as Universal Credit was expanded".
  • It disagrees with setting an external annual recovery target, citing "the level of uncertainty and variables" affecting debt recovered, and says it has an internal forecast for 2021-22.
  • On the 433,000 closed claims, it disagrees with the recommendation to review them, assessing that recovery "would not represent value for money", though resource choices "are regularly reviewed".

Read the government's response ↗ Read the report ↗ Report an error

How the inquiry ran

Each dot is a dated item listed on this page, from the inquiry's opening on 26 August 2021 to its close on 21 January 2022. The dashed mark is the deadline Parliament records for the government's response.

  1. Oral evidence 9 Sep 2021
  2. Report 17 Nov 2021
  3. Government response 21 Jan 2022
  4. Correspondence 2 letters

What it recommended

The committee's recommendations are not listed here yet. Read them in Twenty-Fifth Report - The Department for Work and Pensions’ Accounts 2020–21 – Fraud and error in the benefits system ↗ on parliament.uk.

Evidence

Oral evidence sessions 1

Who gave evidence 3 witnesses

  • Bozena HillyerDirector for Counter Fraud Compliance and Debt, Department for Work and Pensions
  • Neil CoulingDirector General Change and Resilience, and Universal Credit SRO, Department for Work and Pensions
  • Peter SchofieldPermanent Secretary, Department for Work and Pensions

Correspondence 2 letters