Recommendations & Conclusions
31 items
2
Recommendation
Twenty-Sixth Report - The Department fo…
Rejected
The Department risks allowing high levels of fraud and claimants disengaging with its compliance processes to become normal. The Department has repeatedly claimed that there is an increasing propensity to fraud in society in general since the pandemic. It believes that this is in part driving the record levels of …
Government response. The government disagrees, stating that there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process and should not be receiving benefit. They also state that they continually review all of its customer …
HM Treasury
3
Recommendation
Twenty-Sixth Report - The Department fo…
Rejected
The success of the Department’s strategy to bring down fraud and error is dependent on highly uncertain assumptions. The Department has set out its strategy to tackle fraud and error in Fighting Fraud in the Welfare System. This includes a £613 million investment in counter-fraud activities. The plan is dependent …
Government response. The government disagrees with the recommendation, stating that setting out detailed contingency plans for various scenarios is unnecessary and could distract from the delivery of its existing plan to reduce fraud and error.
HM Treasury
4
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
The Department has not set out in sufficient detail how it will assess whether it is achieving what it wants from its investment in fraud prevention measures. We have previously found that the Department lacks the ability to demonstrate that its counter-fraud activities are having the intended impact and are …
Government response. The government agrees and reports savings of £2 billion achieved in 2021-22 through counter-fraud function. They acknowledge that the NAO has yet to endorse this framework but is committed to working together ahead of the 2022-23 ARA to ensure this …
HM Treasury
5
Recommendation
Twenty-Sixth Report - The Department fo…
Rejected
The Department’s lack of transparency over its use of data analytics risks eroding public trust in the benefit system. The Department’s strategy to bring down fraud and error will depend increasingly on the use of data analytics and machine learning to identify potentially fraudulent claims. It has trialled a model …
Government response. The government disagrees with the recommendation, stating that the recommendation does not fall within the remit of the Social Security Advisory Committee.
HM Treasury
6
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
The Department’s efforts to correct the systemic underpayment of State Pension are too slow to meaningfully put things right. The Department now estimates that 237,000 pensioners have been underpaid a total of £1.46 billion in their State Pension. Despite these underpayments going back as far as 1985, the Department’s overall …
Government response. The government agrees and states that work is underway in HMRC, supported by the department, to understand more about the scale, potential causes, and options to correct historical errors relating to Home Responsibilities Protection (HRP). They also mention a list …
HM Treasury
1
Conclusion
Twenty-Sixth Report - The Department fo…
Acknowledged
On the basis of a Report by the Comptroller and Auditor General (C&AG), we took evidence from the Department for Work & Pensions (the Department) on its 2021–22 Annual Report and Accounts and the level of fraud and error in the benefits it administers.1
Government response. The government agrees and says it has committed to the target implementation date and will keep the Committee up to date on the progress of this via the existing TM25 recommendation.
HM Treasury
7
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
We challenged the Department to explain why benefit fraud remained so high and had not yet returned to pre-pandemic levels. The Department could not tell us when it expected fraud and error to return to pre-pandemic levels, nor could it tell us when Universal Credit overpayments were likely to reach …
Government response. The government disagrees with the Committee’s recommendation and states that the OBR is the government’s independent forecaster, and the department is working with OBR to review its baseline assumptions, and to ensure fraud and error is more visible within the …
HM Treasury
8
Conclusion
Twenty-Sixth Report - The Department fo…
Accepted
We have repeatedly recommended that the Department should set targets for fraud and error reduction across the benefits it administers, most recently as part of our examination of the Department’s 2021–22 Annual Report and Accounts.12 In its response the Department reconfirmed its intention to set an overall target for fraud …
Government response. The government agrees with the Committee’s recommendation, previously given, to set a target and work with the National Audit Office (NAO) to develop commentary, with a target implementation date of Summer 2023, and will keep the Committee up to date …
HM Treasury
9
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
We asked the Department when it expected to be able to set a target for reducing fraud and error. It referred to its letter to the Committee of May 2022 and reiterated it still did not believe that it was able to set a target because of the uncertainty in …
Government response. The government agrees to set a target for reducing fraud and error and will work with the National Audit Office (NAO) to develop commentary.
HM Treasury
10
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
The Department has repeatedly linked the high level of benefit fraud since the pandemic to an increase in the propensity to commit fraud in society more generally. It told us “there is no doubt” that underlying fraud in society is going up, and that the fraud and error in the …
Government response. The government disagrees with the committee's recommendation and believes there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process. They are seeking to understand better how it might change benefit policy, process, …
HM Treasury
11
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
The Department’s fraud and error statistics show that the biggest growth area for Universal Credit overpayments in 2021–22 was claimants ‘failing to provide evidence or engage with the process’. This category applies to cases where the claimant had given up their benefit entitlement rather than fully engage in the Department’s …
Government response. The government disagrees with the committee's recommendation and believes there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process. They are seeking to understand better how it might change benefit policy, process, …
HM Treasury
12
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
We asked the Department whether it had considered explanations for failure to engage other than deliberate dishonesty, such as concern about the impact on employment or housing if a claimant appeared to under investigation. It stressed that the labelling of claimants who fail to engage as fraudsters was only for …
Government response. The government disagrees with the Committee’s recommendation and asserts there is a well-established and accepted methodology for dealing with customers who do not co-operate with the benefit review process and should not be receiving benefit, classifying them as customer fraud, …
HM Treasury
13
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
We asked the Department how it ensured that vulnerable claimants were taken into account, in particular when it uses data analytics and machine learning. The Department told us that it was considering and testing for vulnerability “at every stage”.23 It acknowledged that that its data analytics tools focused on characteristics …
Government response. The government is committed to ensuring that all the right assurances and governance is in place for its data and analytics functions, in relation to its fraud and error response and considering the best method on reporting this information to …
HM Treasury
14
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
We observed that some claimants may struggle to understand the Department’s communications and use its services. We questioned the Department on how it might improve its customer service to make it easier for claimants to engage, especially where they have less experience of understanding of the benefits process. It acknowledged …
Government response. The government disagrees with the committee's recommendation, stating that there is a well-established and accepted methodology for dealing with customers who do not co-operate with the benefit review process.
HM Treasury
15
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
In May 2022 the Department published its strategy to reduce fraud and error following the pandemic, which is set out in Fighting Fraud in the Welfare System. The three main strands of this are:26 • £613 million investment in counter-fraud measures during the Spending Review period. Most of this will …
Government response. The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud …
HM Treasury
16
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
We questioned the Department on the challenges it may face in implementing its strategy. The Department told us that it will achieve the planned increase in frontline counter-fraud staff to 9,500 full-time equivalents by July 2022. It explained that its plan to review over two million Universal Credit cases will …
Government response. The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud …
HM Treasury
17
Conclusion
Twenty-Sixth Report - The Department fo…
Rejected
We have previously recommended that the Department should communicate to Parliament what additional powers or changes to legislation it needed to improve controls on specific fraud and error risks.30 The Department set out the new powers it believes it requires in Fighting Fraud in the Welfare System, which includes greater …
Government response. The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud …
HM Treasury
18
Recommendation
Twenty-Sixth Report - The Department fo…
Rejected
During our examination of the Department’s 2020–21 Annual Report and Accounts we concluded that the Department was taken by surprise by the significant increase in the levels of Universal Credit fraud attributed to misreporting of self-employment earnings during the pandemic.33 The Department accepted that it needed to more and claimed …
Government response. The government disagrees, pointing to its existing plan to reduce fraud and error, the £613 million investment received through Spending Review 2021 and Spring Statement 2022, and the plan to legislate for additional powers. They also reference HMRC sharing information …
HM Treasury
19
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
We have previously found that the Department lacks the ability to demonstrate that its counter-fraud activities are having the intended impact and are cost-effective. As part of our inquiry into the Department’s 2019–20 Accounts, we recommended that the Department needed to be able to monitor and report on the impact …
Government response. The government published an estimate of £2 billion in savings from counter fraud efforts in the 2021-22 ARA and is committed to working with the NAO to ensure agreement on the framework for the 2022-23 ARA.
HM Treasury
20
Conclusion
Twenty-Sixth Report - The Department fo…
Accepted
We asked the Department how long it would be before it could set a target for fraud and error reduction. It told us that it could not say when it would have enough clarity 32 Qq 70–72 33 Committee of Public Accounts, Department for Work and Pensions Accounts 2020–21 – …
Government response. The government agrees with the Committee’s recommendation, previously given, to set a target and work with the National Audit Office (NAO) to develop commentary, with a target implementation date of Summer 2023, and will keep the Committee up to date …
HM Treasury
21
Conclusion
Twenty-Sixth Report - The Department fo…
Acknowledged
The Department told us it had included numbers in its Annual Report and Accounts for the savings from its efforts to reduce fraud and error. The Department’s 2021–22 Annual Report included an estimate for the impact of its activities to reduce fraud and error of £2 billion for 2021–22, but …
Government response. The government published an estimate of £2 billion in savings from counter fraud efforts in the 2021-22 ARA and is committed to working with the NAO to ensure agreement on the framework for the 2022-23 ARA.
HM Treasury
22
Recommendation
Twenty-Sixth Report - The Department fo…
Acknowledged
As part of our previous examination of the Department’s 2019–20 Accounts, we recommended that the Department should monitor and report any discrimination or bias caused by using artificial intelligence and machine learning on different claimant groups.41 In its response to our report, the Department agreed with our recommendation and told …
Government response. The government is committed to ensuring assurances and governance for data and analytics functions and is considering the best method on reporting this information to Parliament annually.
HM Treasury
23
Recommendation
Twenty-Sixth Report - The Department fo…
Acknowledged
We asked the Department about the degree of transparency that the public can expect to have about how its data analytics and machine learning tools will work. The Department told us that this was a “challenging balance”. It cautioned that it did not want to make public details about its …
Government response. The government is committed to ensuring assurances and governance for data and analytics functions and is considering the best method on reporting this information to Parliament annually.
HM Treasury
24
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
The Department explained that, in order to manage the risk of unintended bias in the use of data analytics to identify fraud, it ensured that there was always meaningful human involvement in decision-making, and that it undertook ‘fairness analysis’ to identify any disproportionate impacts. We asked the Department which groups …
Government response. The government is committed to ensuring that all the right assurances and governance is in place for its data and analytics functions, in relation to its fraud and error response and considering the best method on reporting this information to …
HM Treasury
25
Conclusion
Twenty-Sixth Report - The Department fo…
Not Addressed
We examined the Department’s systemic underpayment of State Pension in January
Government response. The government response only references the PAC conclusion.
HM Treasury
26
Conclusion
Twenty-Sixth Report - The Department fo…
Not Addressed
By the publication of its Annual Report & Accounts in July 2022 the Department estimated that 237,000 pensioners had been underpaid around £1.46 billion. This is an increase of 105,000 pensioners and £429 million compared with its best estimate as at 31 March 2021, but remains within the range of …
Government response. The government response only references the PAC conclusion.
HM Treasury
27
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
In January 2021 the Department launched an exercise to review around 400,000 cases ‘at risk’ of underpayment to confirm the extent of the issue and reimburse affected pensioners. The Department wrote to us in May 2022 explaining that it was on track to conclude the review of the original 400,000 …
Government response. The government agrees and states that it already provides a range of awareness materials to assist those who may fall into the cohorts affected by the State Pension LEAP exercise, including information on Gov.UK and leaflets with annual uprating letters. …
HM Treasury
28
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
In our January 2022 report we were concerned that the Department had not given people who were worried that they had been underpaid enough information to find out what they should do, and that there was a risk that many would still miss out on money they should receive.55 In …
Government response. The government agrees to work with HMRC to fully evaluate the extent of the HRP underpayment as soon as possible and provide a timetable of when it expects each phase of this process will be completed.
HM Treasury
29
Conclusion
Twenty-Sixth Report - The Department fo…
Acknowledged
In our January 2022 report, we warned that, given the nature of underpayments identified, there was a risk that similar, unidentified errors existed in the State Pension caseload.60 In 2021–22 the Department identified several new groups of pensioners potentially affected by underpayment, the most significant relating to Home Responsibilities Protection …
Government response. The government agrees with the recommendation to work with HMRC to evaluate the extent of the HRP underpayment and provide a timetable for completion. Investigation is underway, but estimates of affected people and costs are not yet available.
HM Treasury
30
Recommendation
Twenty-Sixth Report - The Department fo…
Accepted
The NAO reported that the Department cannot rule out that there may be further groups of pensioners, as yet unidentified, that have been affected by a historic underpayment. It concluded that this was in large part because the Department had not set out plans to revise its control processes for …
Government response. The government agrees and plans to report the total value of arrears payments that arise due to underpayments in its next Annual Report & Accounts, and how it will review individual arrears payments to assess whether they are indicative of …
HM Treasury
31
Conclusion
Twenty-Sixth Report - The Department fo…
Accepted
We have previously concluded that the Department had been relying on a State Pension payment system that is not fit for purpose for decades, and recommended that it consider ways to upgrade its IT systems as a matter of urgency.66 The Department accepted 59 Q 101 60 Committee of Public …
Government response. The government agrees with the recommendation, but disagrees with the overall conclusion, given its previous detailed updates on the State Pensions Legal Entitlement and Administrative Practices exercise (the LEAP exercise) and provides details on the scope of the exercise, progress …
HM Treasury