Recommendation 18

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 that it would continue to work across government to improve access to data that would support its efforts to tackle these overpayments.34 We asked the Department why it thought levels of fraud and error remained so high in 2021–22. It explained that part of the reason was that the Universal Credit claims made during the pandemic were inherently riskier, with higher levels of self-employment, and that it lacked timely information to verify the earnings of these claimants. It acknowledged that there was more it needed to do on self- employment fraud by working to improve data sharing with HMRC, and in particular by improving access to information on self-employment earnings collected by HMRC as part of its Making Tax Digital programme.35 Assessment of the impact and cost-effectiveness of its activities