Source · Select Committees · Public Accounts Committee
Recommendation 24
24
Accepted
DWP's financial statements qualified for 36th consecutive year due to material fraud and error.
Conclusion
Benefit payments may be incorrect due to deliberate fraud, either by individuals or by organised crime groups, or unintended error by claimants or by DWP or another part of government. The C&AG qualified his opinion on the regularity of DWP’s 2023–24 financial statements due to the material level of fraud and error in its benefit expenditure (except for expenditure on State Pension, for which the level of fraud and error is significantly lower). Regularity relates to whether money has been spent as Parliament intended, for example whether spending complies with relevant legislation. This was the thirty–sixth consecutive year for which DWP’s accounts have been qualified due to material fraud and error.48 Underpayments
Government Response Summary
The government agrees with the committee's point, committing to scale up the Targeted Case Review to full operation by March 2025, increase funding for counter fraud by £110 million in 2025-26, and deploy an additional 3,000 staff from April 2025 to identify and recover overpayments and check Universal Credit claimants' circumstances.
Government Response
Accepted
HM Government
Accepted
6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 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. 6.3 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. 6.4 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. 6.5 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.