Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Accepted
DWP lacks clarity on spending over £2 billion fraud funding and new powers’ costs
Conclusion
The Department did not make clear how it planned to use the remainder of the available funding, which amounts to over £2 billion. It indicated that it expected to spend some money implementing the new powers it has acquired through the Public Authorities (Fraud, Error and Recovery) Act 2025 but did not say how much this would cost. The Department also told us that it planned to employ a ‘test and learn’ approach in tackling fraud and error, with an expectation that successful measures should deliver a return on investment in excess of 3:1.28 24 C&AG’s Report (overpayments), paras 12, 21 25 Q 8 26 C&AG’s Report (overpayments), paras 3.27, 3.28 27 Q 8; Letter from DWP to the Public Accounts Committee dated 1 December 2025 28 Q 8 11 Data sharing between government departments
Government Response Summary
The Department has secured £3.5 billion of dedicated funding from 2026-27 and has committed to gross savings of £14.6 billion up to the end of 2030-31 from fraud, error and debt activity.
Government Response
Accepted
HM Government
Accepted
3.1 The government agrees with the Committee’s recommendation. Recommendation implemented 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. 3.3 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. 3.4 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.