Source · Select Committees · Public Accounts Committee

66th Report - Tackling fraud and error in benefit expenditure 2024-25

Public Accounts Committee HC 1231 Published 11 February 2026
Report Status
Government responded
Conclusions & Recommendations
30 items (14 recs)
Government Response
AI assessment · 30 of 30 classified
Accepted 19
Accepted in Part 1
Acknowledged 3
Not Addressed 4
Rejected 3
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Recommendations

11 results
2 Accepted

Set out actions to address root causes of official error by 2025–26 annual report

Recommendation
Errors by the Department or other parts of government caused £1.0 billion of overpayments and £1.2 billion of underpayments in 2024–25. Official error occurs when a benefit is paid incorrectly due to action, delay or a mistake by the Department, … Read more
Government Response Summary
The government agrees and states the recommendation is implemented, explaining that the department already reports on its plans and continuous improvement activities to address official error root causes and payment accuracy annually in its Annual Report and Accounts.
HM Treasury
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3 Accepted

Set out plans for spending £3.5 billion fraud funding and measuring its return on investment

Recommendation
The Department has not made clear how it plans to spend the £3.5 billion of dedicated funding it has available to tackle fraud and error in the three years from 2026–27. The government has awarded the Department £6.7 billion of … Read more
Government Response Summary
The government agrees, detailing that the £3.5 billion funding from 2026-27 will support 5,930 agents in Targeted Case Review, over 12,000 in Counter-Fraud, and investments in preventative measures and new legislation. Cost-effectiveness will be measured via OBR/Treasury scrutiny, business cases, and transparent public reporting.
HM Treasury
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4 Accepted

Set out plans for cross-departmental data sharing to verify Universal Credit household composition

Recommendation
The Department is not doing enough to share data with other government departments and thereby improve the accuracy of benefit payments. Administering the benefits system is complex: for example, targeting benefits such as Universal Credit to claimants’ needs and circumstances … Read more
Government Response Summary
The government agrees and states the recommendation is already implemented, citing longstanding and ongoing cross-government data sharing activities, including active collaboration with various departments and the assessment of Department for Education datasets to verify household composition.
HM Treasury
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5 Accepted

Report annually on usage and impact of new Public Authorities Act 2025 powers

Recommendation
The Department has not fully set out how it will use its new legal powers in a way that supports public trust. The Public Authorities (Fraud, Error and Recovery) Act, which received Royal Assent on 2 December 2025, gives the … Read more
Government Response Summary
The government accepts the recommendation and states it will include proportionate and appropriate reporting on the use and impact of powers from the Public Authorities (Fraud, Error and Recovery) Act 2025 in its Annual Reports and Accounts as they are implemented, building on existing reporting.
HM Treasury
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7 Accepted

Update Committee on progress resolving Carer’s Allowance overpayments due to inaccurate guidance

Recommendation
Inaccurate operational guidance has led the Department to incorrectly assess around 26,000 carers as having been overpaid Carer’s Allowance. The main cause of Carer’s Allowance overpayments is claimants having earnings which exceed the permitted limit. The Independent Review of Carer’s … Read more
Government Response Summary
The government accepts the recommendation and commits to writing to both the Public Accounts and Work and Pensions Committees every six months with progress updates on identifying and resolving affected carer cases. They are also modernising Carer's Allowance earnings treatment and reassessing an estimated 26,000 cases.
HM Treasury
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14 Accepted

DWP plans to extend Targeted Case Review for Universal Credit and Pension Credit

Recommendation
We asked the Department how it planned to use this funding in the three years from 2026–27. It told us that the money would cover a series of measures, including a continuation of Targeted Case Review of Universal Credit claims.25 … Read more
Government Response Summary
The department has secured £3.5 billion of dedicated funding from 2026-27 and has committed to gross savings of £14.6 billion up to the end of 2030-31 from fraud, error and debt activity.
HM Treasury
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21 Accepted

DWP will implement codes of practice and HMICFRS oversight for new fraud powers.

Recommendation
We asked the Department how it would ensure that it used its new powers proportionately and effectively. It highlighted that the new powers and safeguards had been debated at length during the passage of the Bill. It said that it … Read more
Government Response Summary
The department already reports information on payment accuracy, investigations and debt recovery in its Annual Reports and Accounts, and intends to include proportionate reporting on the powers in the Public Authorities (Fraud, Error and Recovery) Act 2025 as they are implemented.
HM Treasury
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23 Accepted

Unfulfilled eligibility in disability benefits caused £3.7 billion in underpayments during 2024-25.

Recommendation
Unfulfilled eligibility (previously called claimant error underpayments) occurs where a claimant fails to provide accurate information or evidence about their circumstances and as a result does not receive the full amount of benefit they are entitled to. Unfulfilled eligibility was … Read more
Government Response Summary
The government agrees to evaluate the impact of its communications campaign to encourage claimants to report changes of circumstances and publish the results by the end of 2026, using performance, behavioral, and attitudinal measures.
HM Treasury
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24 Accepted

DWP needs to build greater claimant trust to encourage reporting of changing circumstances.

Recommendation
We previously concluded that the Department needed to do more to encourage people to report changes of circumstances, which hinges on making it easy for people to get in touch and on customers trusting that they will be treated fairly.45 … Read more
Government Response Summary
The department will assess the impact of the ‘Tell DWP’ communications campaign on claimant reporting behavior, evaluate locally targeted elements of the campaign, and publish findings from these evaluation activities by December 2026.
HM Treasury
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27 Accepted

Carer's Allowance overpayments, driven by exceeding earnings limits, fluctuated significantly annually.

Recommendation
From 2018–19 to 2023–24, the number of new Carer’s Allowance overpayments identified by the Department each year fluctuated between 32,500 and 60,800. The main cause of Carer’s Allowance overpayments is a claimant having earnings which exceed the permitted limit.53 Read more
Government Response Summary
The government agrees to provide the Public Accounts and Work and Pensions Committees with six-monthly updates on its progress with identifying and resolving the cases of carers affected by its inaccurate guidance, beginning in September 2026.
HM Treasury
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29 Accepted

DWP identifies 26,000 individuals affected by incorrect Carer's Allowance guidance, initiating £75m review.

Recommendation
We asked the Department how long it would take to reassess all the cases that might have been affected by its incorrect guidance on averaging earnings. The Department said it estimated that about 26,000 people would have been affected over … Read more
Government Response Summary
The department will reassess affected cases and potentially reduce, cancel, or refund debts for an estimated 26,000 carers, with the first of rolling 6 monthly updates in September 2026 and will write to the Public Accounts and Work and Pensions Committees every six months with a progress update and include information in its Annual Report and Accounts.
HM Treasury
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Conclusions (8)

Observations and findings
12 Conclusion Accepted
We pressed the Department on whether it is taking official error seriously enough. It acknowledged that, while official error is a smaller component of overpayments than fraud, it needed to get its own house in order. It said that it continuously sought to address official error through training for its …
Government Response Summary
The department reports on its plans to improve payment accuracy and address the root causes of fraud and error each year in the Annual Report and Accounts (ARA).
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13 Conclusion Accepted
The Government has awarded the Department £6.7 billion of dedicated funding for fraud and error activity over the nine years from 2020–21 to 2028–29. £3.5 billion of this money will be available in the three years from 2026–27 to 2028–29, giving the Department the opportunity to increase the scale and …
Government Response Summary
The Department has secured £3.5 billion of dedicated funding from 2026-27 and has committed to gross savings of £14.6 billion up to the end of 2030-31 from fraud, error and debt activity.
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15 Conclusion Accepted
The Department did not make clear how it planned to use the remainder of the available funding, which amounts to over £2 billion. It indicated that it expected to spend some money implementing the new powers it has acquired through the Public Authorities (Fraud, Error and Recovery) Act 2025 but …
Government Response Summary
The Department has secured £3.5 billion of dedicated funding from 2026-27 and has committed to gross savings of £14.6 billion up to the end of 2030-31 from fraud, error and debt activity.
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17 Conclusion Accepted
The Department said that data was absolutely key to addressing fraud and error. Exploiting forms of data to keep benefit claims accurate was a lesson it had taken from Universal Credit. It pointed us towards its success in using real-time PAYE data from HM Revenue & Customs to verify Universal …
Government Response Summary
The department works closely with other departments on data sharing and assessing the value of different datasets.
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18 Conclusion Accepted
The Department told us that there were data sources from across government and beyond that its systems could potentially use to help drive down fraud and error, and that it was very keen to exploit such opportunities.31 We note that there is information that the Department for Education and councils …
Government Response Summary
The department works closely with other departments on data sharing and assessing the value of different datasets.
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20 Conclusion Accepted
The Public Authorities (Fraud, Error and Recovery) Act, which received Royal Assent in December 2025, extends the Department’s powers to tackle fraud and error and recover any associated losses.36 The Department’s new powers include the ability to compel banks and other financial institutions to provide information to help it verify …
Government Response Summary
The department already reports in its Annual Reports and Accounts, information on payment accuracy, investigations and debt recovery.
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22 Conclusion Accepted
The Department will also have a new power to recover money owed from an individual’s bank account, without the need for a court order, where the individual is not on benefits or in PAYE employment.40 It told us that this power was about fairness and making sure that it treated …
Government Response Summary
The department already reports in its Annual Reports and Accounts, information on payment accuracy, investigations and debt recovery.
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30 Conclusion Accepted
The Independent Review also found a lack of integrated, concerted leadership in relation to Carer’s Allowance overpayments. We asked the Department what it was going to do to make sure that this area got the 52 Letter from Department for Work & Pensions dated 17 December 2025 53 C&AG’s Report, …
Government Response Summary
The department has accepted 38 of the 40 recommendations set out in the Sayce review, increased the weekly Carer’s Allowance (CA) earnings limit, changed some of its guidance, will be modernising the treatment of earnings in CA to help reduce the number of overpayments occurring in future and will write to both the Public Accounts and Work and Pensions Committees every six months with a progress update.
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