Source · Select Committees · Public Accounts Committee
Recommendation 3
3
Accepted
Set out plans for spending £3.5 billion fraud funding and measuring its return on investment
Recommendation
The Department has not made clear how it plans to spend the £3.5 billion of dedicated funding it has available to tackle fraud and error in the three years from 2026–27. The government has awarded the Department £6.7 billion of dedicated funding for fraud and error activity over the nine years from 2020–21 to 2028–29. Of this, £3.5 billion will be available in the three years from 2026–27. The Department says that it will use £300 million to £400 million each year to continue its Targeted Case Review programme, which seeks to detect and correct fraud and error in Universal Credit claims. It is also planning to extend Targeted Case Review to Pension Credit, at a cost of up to £70 million per year. However. the Department has not made clear how it will use the remainder of the available funding, which amounts to over £2 billion. It has indicated that it intends to use some of the money to implement its new legal powers, but did not say how much this would cost. recommendation The Department should set out in the Treasury Minute how it plans to spend the £3.5 billion of dedicated funding available from 2026–27, including how it will measure the cost-effectiveness and return on investment of the areas it funds.
Government Response Summary
The government agrees, detailing that the £3.5 billion funding from 2026-27 will support 5,930 agents in Targeted Case Review, over 12,000 in Counter-Fraud, and investments in preventative measures and new legislation. Cost-effectiveness will be measured via OBR/Treasury scrutiny, business cases, and transparent public reporting.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. 3.2. The department has secured £3.5 billion of dedicated funding from 2026-27. This funding enables the deployment of 5,930 agents into the Targeted Case Review programme and over 12,000 agents working in Counter-Fraud, Compliance and Debt, as well as investment in preventative activities and funding to deliver the savings commitments made over previous fiscal events. Since Autumn Budget 2024, the department has committed to gross savings of £14.6 billion up to the end of 2030-31 from fraud, error and debt activity. Activities include: • Improvements to the verification of self-employment income and expenses and of capital in claimants’ bank accounts to prevent fraud and error. • Introducing regular requests for Universal Credit claimants to confirm whether their circumstances have changed. • Introducing legislation to require banks to share data with the department to identify potential overpayments. The department demonstrates value for money in two ways: through external scrutiny of its costings by the OBR and the Treasury (HMT), and through transparent reporting of performance via published National Statistics and the Annual Report and Accounts. As part of the fiscal event process, the OBR and HMT scrutinise and challenge welfare spending measures, including new activities to reduce fraud, error and debt. Before funding is approved, the department must demonstrate value for money through business cases that outline costs, benefits, risks and delivery assurance, providing HMT with confidence that initiatives will deliver in line with expectations on return on investment.