Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Rejected
Universal Credit overpayment target of 6.5% now unachievable due to increased baseline fraud and error.
Conclusion
We challenged DWP to explain whether it still expects Universal Credit overpayments to fall to 6.5% as it had previously committed to. DWP explained that 6.5% was the level implied in the business case as a result of the expected reduction in fraud and error from merging legacy benefits into Universal Credit. It added that there is no reason to think that it cannot still achieve the expected reduction, but that this would now result in a higher rate than 6.5% because the baseline level of fraud and error has increased. It concluded 7 Qq 13–14 8 Q 15 9 Q 13 10 DWP ARA 2022–23, page 272 11 Q 16 12 Q 16 13 DWP ARA 2022–23, page 111 14 Q 17 The Department for Work & Pensions Annual Report and Accounts 2022–23 11 that it might be that DWP is doing everything it possibly can but still does not achieve 6.5%, and that the key is doing that all it reasonably can and clearly demonstrating that its control activities are cost-effective.15 Forecasting future levels of overpayment
Government Response Summary
The government rejects the committee's implied direction to explain how it will achieve the 6.5% overpayment target, stating it's committed to reducing fraud and error but external trends impact the level of fraud, which is outside 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.