Source · Select Committees · Public Accounts Committee
Twenty-Sixth Report - The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system
Public Accounts Committee
HC 44
Published 9 November 2022
Recommendations
2
Rejected
The Department risks allowing high levels of fraud and claimants disengaging with its compliance processes...
Recommendation
The Department risks allowing high levels of fraud and claimants disengaging with its compliance processes to become normal. The Department has repeatedly claimed that there is an increasing propensity to fraud in society in general since the pandemic. It believes …
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Government Response Summary
The government disagrees, stating that there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process and should not be receiving benefit. They also state that they continually review all of its customer letters to ensure they are consistent, understandable, and clear.
HM Treasury
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3
Rejected
The success of the Department’s strategy to bring down fraud and error is dependent on...
Recommendation
The success of the Department’s strategy to bring down fraud and error is dependent on highly uncertain assumptions. The Department has set out its strategy to tackle fraud and error in Fighting Fraud in the Welfare System. This includes a …
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Government Response Summary
The government disagrees with the recommendation, stating that setting out detailed contingency plans for various scenarios is unnecessary and could distract from the delivery of its existing plan to reduce fraud and error.
HM Treasury
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5
Rejected
The Department’s lack of transparency over its use of data analytics risks eroding public trust...
Recommendation
The Department’s lack of transparency over its use of data analytics risks eroding public trust in the benefit system. The Department’s strategy to bring down fraud and error will depend increasingly on the use of data analytics and machine learning …
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Government Response Summary
The government disagrees with the recommendation, stating that the recommendation does not fall within the remit of the Social Security Advisory Committee.
HM Treasury
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18
Rejected
During our examination of the Department’s 2020–21 Annual Report and Accounts we concluded that the...
Recommendation
During our examination of the Department’s 2020–21 Annual Report and Accounts we concluded that the Department was taken by surprise by the significant increase in the levels of Universal Credit fraud attributed to misreporting of self-employment earnings during the pandemic.33 …
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Government Response Summary
The government disagrees, pointing to its existing plan to reduce fraud and error, the £613 million investment received through Spending Review 2021 and Spring Statement 2022, and the plan to legislate for additional powers. They also reference HMRC sharing information with them. The department doesn't feel it is necessary or productive to set out detailed contingency plans for various scenarios at this point.
HM Treasury
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Conclusions (8)
7
Conclusion
Rejected
We challenged the Department to explain why benefit fraud remained so high and had not yet returned to pre-pandemic levels. The Department could not tell us when it expected fraud and error to return to pre-pandemic levels, nor could it tell us when Universal Credit overpayments were likely to reach …
Government Response Summary
The government disagrees with the Committee’s recommendation and states that the OBR is the government’s independent forecaster, and the department is working with OBR to review its baseline assumptions, and to ensure fraud and error is more visible within the overall forecast, when revised at the spring statement.
10
Conclusion
Rejected
The Department has repeatedly linked the high level of benefit fraud since the pandemic to an increase in the propensity to commit fraud in society more generally. It told us “there is no doubt” that underlying fraud in society is going up, and that the fraud and error in the …
Government Response Summary
The government disagrees with the committee's recommendation and believes there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process. They are seeking to understand better how it might change benefit policy, process, or service design to prevent this type of customer fraud in the future and continually review all of its customer letters.
11
Conclusion
Rejected
The Department’s fraud and error statistics show that the biggest growth area for Universal Credit overpayments in 2021–22 was claimants ‘failing to provide evidence or engage with the process’. This category applies to cases where the claimant had given up their benefit entitlement rather than fully engage in the Department’s …
Government Response Summary
The government disagrees with the committee's recommendation and believes there is a well-established methodology for dealing with customers who do not co-operate with the benefit review process. They are seeking to understand better how it might change benefit policy, process, or service design to prevent this type of customer fraud in the future and continually review all of its customer letters.
12
Conclusion
Rejected
We asked the Department whether it had considered explanations for failure to engage other than deliberate dishonesty, such as concern about the impact on employment or housing if a claimant appeared to under investigation. It stressed that the labelling of claimants who fail to engage as fraudsters was only for …
Government Response Summary
The government disagrees with the Committee’s recommendation and asserts there is a well-established and accepted methodology for dealing with customers who do not co-operate with the benefit review process and should not be receiving benefit, classifying them as customer fraud, for fraud and error measurement and reporting purposes.
14
Conclusion
Rejected
We observed that some claimants may struggle to understand the Department’s communications and use its services. We questioned the Department on how it might improve its customer service to make it easier for claimants to engage, especially where they have less experience of understanding of the benefits process. It acknowledged …
Government Response Summary
The government disagrees with the committee's recommendation, stating that there is a well-established and accepted methodology for dealing with customers who do not co-operate with the benefit review process.
15
Conclusion
Rejected
In May 2022 the Department published its strategy to reduce fraud and error following the pandemic, which is set out in Fighting Fraud in the Welfare System. The three main strands of this are:26 • £613 million investment in counter-fraud measures during the Spending Review period. Most of this will …
Government Response Summary
The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud across government.
16
Conclusion
Rejected
We questioned the Department on the challenges it may face in implementing its strategy. The Department told us that it will achieve the planned increase in frontline counter-fraud staff to 9,500 full-time equivalents by July 2022. It explained that its plan to review over two million Universal Credit cases will …
Government Response Summary
The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud across government.
17
Conclusion
Rejected
We have previously recommended that the Department should communicate to Parliament what additional powers or changes to legislation it needed to improve controls on specific fraud and error risks.30 The Department set out the new powers it believes it requires in Fighting Fraud in the Welfare System, which includes greater …
Government Response Summary
The government disagrees with the committee's recommendation and reiterates its existing plan to reduce fraud and error, focusing on frontline staff, legal powers, and public/private sector collaboration, funded by existing investments and seeking further opportunities to clamp down on fraud across government.