Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Accepted
Universal energy schemes with no application process presented lower inherent fraud risks.
Conclusion
The Former Permanent Secretary told us that while the Department was “acutely conscious” of the fraud risks within the schemes, it thought that the design of the energy support schemes meant that the risks of fraud were much lower than those for loan schemes introduced during the pandemic. They explained that “universal schemes, by their nature, are much less fraud-prone” because there was no application process, and there were fewer opportunities for money to be passed onto people who do not qualify for the schemes. They further explained that the schemes relied on existing infrastructure and customer relationships, by requesting energy suppliers to deliver benefits to existing customers. The schemes therefore did not have any of the new-to-bank customers issues faced by schemes to support businesses during the pandemic, such as bounce-back loans. Some schemes, such as the EBSS Alternative Funding route and AFP for consumers who are fully off-grid, do require consumers to apply for the scheme. They told us that fraud and error risks were much more substantial for these schemes but that the Department had sought to implement processes that would cross-check applications with other data sources.40
Government Response Summary
The government agrees with the observation, affirming its serious approach to fraud and error risks. It commits to continuing proactive work to detect and reduce fraud and error, and will work with external scrutiny providers to provide the committee with the latest estimated rates.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2023-24 3.2 The department always takes the risk of fraud and error very seriously. This has been a key consideration in the development and delivery of the schemes, which was done with the support of the Public Sector Fraud Authority from the outset. The department continues proactive work to detect and reduce instances of error and fraud associated with Energy Affordability Schemes and will work with external scrutiny providers to provide the Committee with the latest estimated rates.