Recommendation 14

HM Government Not Addressed

3: PAC conclusion: 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. 3: PAC recommendation: 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. The Department should use information obtained from the process of easing and restoring 3.1c ontroTlhse t og oavsesrensmse tnht ea gcroesets-e wffiethc ttihvee nCoesms oiftt eceo’nst rreoclso.m mendation. Target implementation date: July 2021 3.2 The department accepts that its response to the COVID-19 pandemic has presented an opportunity to evaluate the controls it has in place and assess the impact of those controls in terms of fraud and error prevention. 3.3 During the COVID-19 pandemic, the department has seen a massive increase in demand and paid benefit to an additional three million claimants. Restrictions meant that the department could not routinely see people face to face and carry out its normal checks during this time. 3.4 The department introduced easements (changes to its processes) to ensure that it paid people who needed support during this period. This meant introducing Trust and Protect principles around key areas of verification; namely identity, eligibility and accuracy elements. This meant placing more reliance on claimants’ declarations. However, the department quickly introduced mitigations to strengthen the new process and ensure that sufficient and proportionate checks were in place. Initial forecasts indicate that this significantly reduced the department’s exposure to fraud and error. 3.5 The department is working on separating out the potential impact of the COVID-19 pandemic and potential losses from easements, along with savings from subsequent agreed changes to easements, mitigations and retrospective action. These numbers will be quite distinct from existing fraud and error levels. 3.6 The normal fraud and error sampling exercise (and publication) will set out the levels of fraud and error in Universal Credit. However, the department will in addition set out in the Annual Report and Accounts the impact the pandemic has had on Universal Credit losses.