Recommendation 2

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 fraud and error in the benefit system. However, it is unable to point to convincing evidence that increasing fraud in society must lead to increasing losses to the taxpayer. The Department does not fully understand the reasons why fraud and error in benefit payments remain at record levels. We are therefore concerned that the Department’s narrative about fraud in society could encourage a complacent attitude toward unprecedented and unacceptable levels of benefit fraud and that people come to see committing benefit fraud as normal. We are also concerned about the sharp increase in the number of claimants choosing not to engage with the Department’s sampling exercise to measure fraud and error. These claimants accounted for 14.4% (£852 million) of all Universal Credit overpayments in 2021–22, an increase of £328 million compared with 2020–21. The Department assumes that all such claims are fraudulent but admits that it has no statistically significant information to support this view. It is therefore unable to say whether claimants who fail to engage have done so because they are fraudsters or have been unwilling or unable to engage for other 6 The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system reasons. Given this uncertainty, the Department should do more to reassure itself that it has struck the right tone in its communications with claimants to encourage trust and engagement with its services. Recommendation: Before the end of January 2023, we expect the Department to write to us with a clear plan of how it intends to increase the number of claimants responding to its fraud and error sampling exercises. In doin