Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Rejected
During our examination of the Department’s 2020–21 Annual Report and Accounts we concluded that the...
Recommendation
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
Government Response Summary
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 with them. The department doesn't feel it is necessary or productive to set out detailed contingency plans for various scenarios at this point.
Government Response
Rejected
HM Government
Rejected
The government disagrees with the Committee’s recommendation. 3.2 In May 2022, the government published its plan to reduce fraud and error, focussing on three areas: • DWP frontline counter-fraud professionals and data analytics investment, • creating new legal powers to investigate and punish potential fraudsters and • bringing together the public and private sectors to keep one step ahead. 3.3 The department received £613 million investment through Spending Review 2021 and Spring Statement 2022 to prevent an estimated £2 billion being lost to fraud and error by 2024-25. Autumn Statement 2022 funded an additional £280 million to deliver £396 million Annual Managed Expenditure (AME) savings by 2024-25. This will enable reviews of Universal Credit claims and cracking down on claimants and criminals seeking to abuse the system. The OBR forecast savings of about £9 billion by 2027-28 if this increased investment continues into the next Spending Review period. 3.4 The government set out plans to legislate for additional powers when Parliamentary time allows and is expected to have additional impact on the OBR forecast. 3.5 The department is seeking opportunities to clamp down on fraud across government. HM Revenue and Customs (HMRC) have shared information with the department about the Self-Employed Income Support Scheme, and together will continue to explore ways to tackle fraud across government. 3.6 The department’s ARA will update on progress, new opportunities, and if need be, any contingency action being taken. Therefore, the department does not feel it is necessary or productive to set out detailed contingency plans for various scenarios at this point, which could distract from focusing on the delivery of its existing plan.