Recommendation 19

We have previously found that the Department lacks the ability to demonstrate that its counter-fraud activities are having the intended impact and are cost-effective. As part of our inquiry into the Department’s 2019–20 Accounts, we recommended that the Department needed to be able to monitor and report on the impact and cost effectiveness of each of its fraud and error initiatives, and in particular the impact of its investment in new technology.36 When we examined the Department’s 2020–21 Accounts, we concluded that while the Department claimed it was making savings across the benefit system, it was unable to explain how these would reduce the amount of fraud and error in its expenditure. We recommended that it work with the NAO to develop a framework, by the time of its 2021–22 Annual Report and Accounts, that allowed a consistent basis for reporting how much money has been lost or saved for the taxpayer as a result of action to prevent fraud and error.37 In its response to our report, the Department agreed with our recommendation and claimed it was already developing an internal measurement and reporting capability to provide estimates of the amount saved for the taxpayer from fraud and error activities.38