Source · Select Committees · Public Accounts Committee
Recommendation 6
6
Accepted
Set out use of additional £110 million funding for counter-fraud to reduce overpayments.
Recommendation
Excluding State Pension, £9.5 billion of benefit expenditure was overpaid in 2023–24 and DWP did not achieve its savings target from Targeted Case Reviews. Excluding State Pension, DWP estimates that it overpaid a total of 6.7% (£9.5 billion) in 2023–24, up from 6.6% (£8.2 billion) in 2022–23, meaning many claimants received more money than they were entitled to. DWP has a number of initiatives to tackle overpayments, including a programme of Targeted Case Reviews aimed at identifying fraud in existing UC claims. DWP is confident that the Targeted Case Reviews approach is working despite missing its savings target in 2023–24, achieving £90 million of savings against the target of £115 million. Overpayments have not come down as quickly as DWP had hoped, but DWP reports that it is on track for UC overpayments to return to below pre-pandemic levels over the period to 2030. In the 2024 Autumn Budget, the government increased funding for DWP’s counter fraud activities by £110 million in 2025–26. 5 recommendation DWP should set out how it will use the extra £110 million it received in the Autumn Budget 2024 for counter fraud activities to reduce overpayment rates.
Government Response Summary
The government agrees, outlining that the £110 million will fund scaling Targeted Case Reviews to full capacity by March 2025, deploying 3,000 additional staff from April 2025 to identify and recover overpayments, and using additional resources to check Universal Credit claimants' circumstances.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented The department’s focus for Targeted Case Review (TCR) in 2023-24 was to continue to scale and stabilise a new operation that began testing in 2022-23. In adopting a hybrid resource model to reduce the impact on in-house operational resource, efforts were re- prioritised from iterating the service to make gains on productivity and hit rate to safely onboarding the commercial provider and safeguarding the future impact of TCR. TCR will be at full scale from March 2025. As announced at Autumn Budget 2024, the government is increasing funding for counter fraud, error and debt activity by £110 million in financial year 2025-26. This investment is expected to deliver £178 million in savings to the taxpayer over the next financial year and lay the foundations for increased savings in later years – the Budget committed the department to total additional savings of £8.6 billion. As a result of this investment, from April 2025, the department will begin progressive deployment of an additional 3,000 staff to identify and recover overpayments in the benefits system. This activity will save £78 million in 2025-26. The department expects the full 3,000 staff will be in role by 2027-28. Alongside investment in frontline counter-fraud capability, the department will also begin deployment of additional operational resource to periodically ask Universal Credit claimants to confirm whether they have had a change in circumstances. This activity is expected to save £100 million in 2025-26. The department is also utilising funding to support evaluation of small-scale trials in Universal Credit, to test new and innovative means of preventing incorrect payments from occurring.