13
Recommendation
Twenty-Sixth Report - Department of Wor…
Accepted in Part
Even before the impact of COVID-19 the Department had not yet delivered the value of savings on fraud and error on which the Business Case for Universal Credit was based.26 As these were intended to be annually recurring savings, every year of delay in achieving them represents a real and …
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Even before the impact of COVID-19 the Department had not yet delivered the value of savings on fraud and error on which the Business Case for Universal Credit was based.26 As these were intended to be annually recurring savings, every year of delay in achieving them represents a real and significant cost to the public purse.27 The Department is not yet able to tell us how long it will take to achieve the promised level of savings, and it is therefore unable to tell us what the total additional cost will be.28 19 DWP ARAC 2019–20, pages 186–188 20 Q 21; DWP ARAC 2019–20, page 70 21 Q 21 22 Committee of Public Accounts, Universal Credit and fraud and error: progress review, Session 2016–17, HC 489, 4 November 2016, recommendations 5 and 8; Committee of Public Accounts, Fraud and Error Stocktake, Session 2015–16, HC 394, 28 October 2015, recommendations 2 and 4. 23 DWP ARAC 2019–20, pages 189, 191, 238 24 Q16; C&AG’s Report, Rolling out Universal Credit, Session 2017–19, HC 1123, 15 June 2018, page 52, Figure 18 25 Q 18 26 Q 17, C&AG’s Report, Universal Credit: getting to first payment, Session 2019–21, HC 376, 10 July 2020, page 41, paragraph 2.24 27 C&AG’s Report, Rolling out Universal Credit, Session 2017–19, HC 1123, 15 June 2018, page 52, Figure 18 28 Q 19, Q 20 12 Department for Work and Pensions Accounts 2019–20
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Government response AI summary
The government accepts the recommendation to set annual targets for fraud and error reduction but states that due to the pandemic, it aims to publish an overall target for 2021-22 after baselining the current position, and will consider the viability of individual targets.
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HM Treasury
28
Conclusion
Twenty-Sixth Report - Department of Wor…
Accepted in Part
Evidence suggests that the amounts claimants owe from benefit overpayments, benefit advances and Tax Credits are all likely to increase further in 2020–21. The Department temporarily suspended most debt recovery in March 2020 and reintroduced the recovery of new overpayments in late September.55 With recovery action paused and a surge …
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Evidence suggests that the amounts claimants owe from benefit overpayments, benefit advances and Tax Credits are all likely to increase further in 2020–21. The Department temporarily suspended most debt recovery in March 2020 and reintroduced the recovery of new overpayments in late September.55 With recovery action paused and a surge in new claims at a time when fraud and error controls had been relaxed, it is very likely amounts owed from benefit overpayments will have risen. The amounts due from benefit advances is expected to increase as the Department reports that ‘from 1 March 2020 to 26 May 2020, 1,185,240 advance payments were issued’ (around 971,420, are new claim and benefit transfer advances). Around £1.2 billion of Tax Credits debt was transferred from HM Revenue & Customs to the Department in 2019–20 as claimants moved onto Universal Credit. This will continue as customers with Tax Credit debt either make claims to Universal Credit or are ‘migrated’ from Tax Credits to Universal Credit.56
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Government response AI summary
The government describes its various debt recovery methods and policies, including reduced deduction rates and new tools like 'Repay My Debt'. It commits to improving operational efficiency, using data analytics, and providing additional information on recovery options and outstanding debt in its annual report.
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HM Treasury
31
Conclusion
Twenty-Sixth Report - Department of Wor…
Accepted in Part
For a means tested benefit such as Universal Credit, people entitled to receive the benefit will be those in society with lower incomes and savings.64 The National Audit Office’s (NAO’s) recent study on Universal Credit: getting to first payment found that ‘the Department does not have all the information it …
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For a means tested benefit such as Universal Credit, people entitled to receive the benefit will be those in society with lower incomes and savings.64 The National Audit Office’s (NAO’s) recent study on Universal Credit: getting to first payment found that ‘the Department does not have all the information it needs to track vulnerable claimants and ensure its support is effective.’ NAO’s analysis of claims due for payment from January to September 2019 found that people with low incomes or whose claim includes additional costs, such as costs for a disabled child, are more likely to have deductions applied to their first Universal Credit payment to cover advance payment and other debts. Its analysis also found that deductions can be substantial and are more likely to be so for low income claimants; 45% of Universal Credit claimants on low incomes have 20% or more of their personal allowance deducted in the first assessment period, in contrast to the 27% average across all claims.65
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Government response AI summary
The government agrees on the need to recover debt efficiently and outlines existing hardship provisions. It commits to exploring how financial data can identify vulnerable customers, working with colleagues on debt management findings, and delivering the 'Breathing Space' policy.
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HM Treasury