Recommendation 3

COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. In addition to 6 Department for Work and Pensions Accounts 2019–20 any rise in the level of fraud and error caused by an increase in benefit caseload, the Department acknowledges that the easements to controls it has made to respond to the pandemic will also increase fraud and error. It has therefore produced a range of estimates of the amounts potentially at risk which has been shared with HM Treasury. In order to analyse the effect on fraud and error of specific control easements, the Department says that it is using tools such as predictive analytics and that it is monitoring its level of staff referrals over time (a staff referral is produced when a staff member suspects the details of a claim are incorrect). The Department reports that due to the redeployment of staff to tackle the surge of claims and the difficulties of sampling in lockdown, it will not be able to review cases to produce an estimate of fraud and error in 2020–21 in the usual way. However, it accepts that “it is vital that we do our absolute best” to have an overall estimate of fraud and error in its Annual Report for 2020–21, where it also “aims” to report the fraud and error cost of its easements to controls. Recommendations: The Department should report both the total level of fraud and error in the benefit system and the impact of its easement of controls on fraud and error, accompanied by both narrative and evidence, in its Annual Report and Accounts for 2020–21. This impact should be clearly distinguished from other fraud and error impacts of COVID-19 e.g. due to the increase in caseload. The Department should use information obtained from the process of easing and restoring controls to assess the cost-effectiveness of controls.