Source · Select Committees · Public Accounts Committee
Recommendation 7
7
Rejected
Universal Credit overpayments remain high, with significant build-up from pandemic-era claims.
Conclusion
DWP estimates that it overpaid 12.8% (£5.5 billion) of all Universal Credit payments in 2022–23, which is much higher than any other benefit.10 We challenged DWP to explain why the fall in fraud and error promised in the Universal Credit business case has failed to materialise. DWP told us that where legacy benefit claimants have migrated to Universal Credit, specific types of fraud—including earnings from employment and childcare— have fallen significantly.11 But it acknowledged that there has been a large build-up in what it calls the ‘stock’ of overpaid Universal Credit claims, which it says relate mostly to the pandemic. It added that it expects to address this primarily through Targeted Case Reviews.12 DWP estimates that the overpayment rate is particularly high for claims that started at the beginning of the pandemic - March 2020 to June 2020 - which during 2022– 23 were overpaid by 21.0%.13
Government Response Summary
The government rejects the committee's implied direction to explain the failure of fraud and error reduction, stating its commitment to a cost-effective control environment but highlighting external fraud trends beyond its direct control.
Government Response
Rejected
HM Government
Rejected
1.1 The government disagrees with the Committee’s recommendation. 1.2 The Department for Work and Pensions (the department) is fully committed to reducing fraud and error through operating a cost-effective control environment and continually enhancing the department’s controls framework to enable this. 1.3 The department set itself an Annual Managed Expenditure (AME) savings target of £1.3 billion in its 2022-23 Annual Report and Accounts and will provide an update on the performance against this target in the 2023-24 Annual Report and Accounts. 1.4 However, the wider external trends of increasing propensity for fraud in the economy, which impact on the level of fraud and error in the benefit system, are not directly in the department’s control. On this basis the department disagrees with the Committee’s recommendation.