Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Report annually on DWP savings from detecting overpayments and future forecast levels.
Conclusion
DWP expects the activities set out in its counter-fraud plan to generate £9.4 billion of additional savings over the next five years. In May 2022 DWP set out its high- level plan to tackle fraud and error following the pandemic in Fighting Fraud in the Welfare System. This includes £895 million of additional investment over the three years to March 2025 in counter-fraud staffing, advanced data analytics, and a project to review millions of Universal Credit claims. DWP estimates that this investment will lead to £9.4 billion of savings over five years by reducing fraud and error. Following a recommendation from this Committee, DWP has published a detailed estimate of the amounts saved through its counter-fraud work, which it estimates was £1.1 billion for 2023–23. It has also set a target to save £1.3 billion through counter-fraud work in 2023–24. This will need to increase each year to achieve its forecast reduction in overpayments if DWP’s other assumptions are correct. Taken together, the forecast, new savings estimate and target improve accountability by providing greater clarity on the cost-effectiveness of DWP’s counter-fraud activities. However, DWP has acknowledged that the savings estimate is experimental and requires refinement. Recommendation 2: DWP should report annually on its savings from detecting and preventing overpayments and its forecast of future overpayment levels, to at least the level of detail set out in Figure 9 of the Comptroller and Auditor General’s report, while continuing to refine and improve the underlying methodology. 6 The Department for Work & Pensions Annual Report and Accounts 2022–23
Government Response Summary
The government agrees with the recommendation and states it is implemented. The Department for Work and Pensions will report on Annual Managed Expenditure savings in its Annual Report and Accounts 2023-24, continuing to develop and refine its experimental metric.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. Recommendation implemented The department is committed to the continued development and refinement of its experimental metric to report on the full Annual Managed Expenditure (AME) savings associated with all departmental activities and controls. The department will report on this in its Annual Report and Accounts 2023-24. It is important to understand the difference between forecasts and targets, the department will be held to account only on the latter.