Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
DWP overpaid £9.5 billion in benefits, with fraud accounting for the majority of overpayments.
Conclusion
Excluding State Pension, DWP estimates that it overpaid a total of 6.7% (£9.5 billion) of benefit expenditure in 2023–24, up from 6.6% (£8.2 billion) in 2022–23.58 Fraud—where DWP considers that a claimant should reasonably have been aware that they were receiving money they were not entitled to—accounted for most of the overpayments (£7.3 billion).59 Two–thirds of all overpayments by value related to UC.60
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.