UK Inquiry Tracker

Department for Work and Pensions Accounts 2021-22

Public Accounts Committee Closed Inquiry

Opened: 9 Jun 2022 Closed: 24 Feb 2023 Parliament page

The Committee will question senior officials at the Department for Work and Pensions on how they managed benefits and employment support in the second year of the pandemic – including current levels of fraud and error in benefits payments - and ongoing efforts to address major delivery issues like the … Read more

15 Recommendations

16 Conclusions

1 Report

1 Oral session

1 Event

Activity timeline 4 events

24 Feb
2023

Report published

Treasury minutes: Government response to the Committee of Public Accounts on the Twenty sixth report from Session 2022-23

9 Nov
2022

Report published

Twenty-Sixth Report - The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system

20 Jul
2022

Oral evidence

Department for Work and Pensions Accounts 2021-22

20 Jul
2022

Formal meeting (oral evidence session) · The Grimond Room, Portcullis House

Department for Work and Pensions Accounts 2021-22

Oral evidence sessions 1 session

20 Jul 2022

View on parliament.uk

Department for Work and Pensions Accounts 2021-22

Bozena Hillyer · Department for Work and Pensions Elizabeth Fairburn · Department for Work & Pensions Neil Couling CBE · Department of Work and Pensions Peter Schofield · Department for Work and Pensions

Reports 1 report · click to expand

Title	HC No.	Published	Items	Response
Twenty-Sixth Report - The Department for Work and Pensions’ Acco…	HC 44	9 Nov 2022	31	Responded

Recommendations & Conclusions

12 results

2 Recommendation Rejected

Twenty-Sixth Report - The Departme…

The Department risks allowing high levels of fraud and claimants disengaging with its compliance processes...

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 … Read more 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 that this is in part driving the record levels of fraud and error in the benefit system. However, it is unable to point to convincing evidence that increasing fraud in society must lead to increasing losses to the taxpayer. The Department does not fully understand the reasons why fraud and error in benefit payments remain at record levels. We are therefore concerned that the Department’s narrative about fraud in society could encourage a complacent attitude toward unprecedented and unacceptable levels of benefit fraud and that people come to see committing benefit fraud as normal. We are also concerned about the sharp increase in the number of claimants choosing not to engage with the Department’s sampling exercise to measure fraud and error. These claimants accounted for 14.4% (£852 million) of all Universal Credit overpayments in 2021–22, an increase of £328 million compared with 2020–21. The Department assumes that all such claims are fraudulent but admits that it has no statistically significant information to support this view. It is therefore unable to say whether claimants who fail to engage have done so because they are fraudsters or have been unwilling or unable to engage for other 6 The Department for Work and Pensions’ Accounts 2021–22 – Fraud and error in the benefits system reasons. Given this uncertainty, the Department should do more to reassure itself that it has struck the right tone in its communications with claimants to encourage trust and engagement with its services. Recommendation: Before the end of January 2023, we expect the Department to write to us with a clear plan of how it intends to increase the number of claimants responding to its fraud and error sampling exercises. In doin Show less

Government Response

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

View details

3 Recommendation Rejected

Twenty-Sixth Report - The Departme…

The success of the Department’s strategy to bring down fraud and error is dependent on...

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 … Read more

Government Response

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

View details

5 Recommendation Rejected

Twenty-Sixth Report - The Departme…

The Department’s lack of transparency over its use of data analytics risks eroding public trust...

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 … Read more

Government Response

The government disagrees with the recommendation, stating that the recommendation does not fall within the remit of the Social Security Advisory Committee.

HM Treasury

View details

7 Conclusion Rejected

Twenty-Sixth Report - The Departme…

We challenged the Department to explain why benefit fraud remained so high and had not...

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 … Read more 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 the 6.5% specified in the Business Case.8 It admitted that levels of fraud and errors within the benefits system were “massively too high”, but told us that it was not surprised at the extent of the increase.9 It told us that a large proportion of the increase in fraud and error was due to the higher number of Universal Credit claims during the pandemic. It explained that these claims were “inherently riskier, because there was a lot more self-employment” and that it lacked the timely data it needed to verify and assess these claims.10 It also told us that there had been an increase in the propensity to commit fraud across society in general. It explained that it considered fraud and error to have been high in 2021–22 as a result of: • A shift in the benefit claimant caseload toward riskier individuals, with more self-employment earnings and possession of savings or other types of capital; • The sampling exercise to measure rates of fraud and error took place between October 2020 and November 2021, a period affected by the pandemic during which key controls over fraud were significantly relaxed due to social distancing; and • The Department is still developing key tools to prevent fraud. These include controls over Universal Credit that are set out in the business case but are not yet fully operational, wider use of data analytics to identify fraudulent cases, and increased data sharing with HMRC that would enable it to tackle fraud relating to self-employment earnings.11 6 Committee of Public Accounts, Department for Work and Pensions Accounts 2020–21 – Fraud and error in the benefits system, Twenty-Fifth Report of Session 2021–22, HC 633, 17 November 2021 7 DWP ARA 202 Show less

Government Response

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.

HM Treasury

View details

10 Conclusion Rejected

Twenty-Sixth Report - The Departme…

The Department has repeatedly linked the high level of benefit fraud since the pandemic to...

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 … Read more

Government Response

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.

HM Treasury

View details

11 Conclusion Rejected

Twenty-Sixth Report - The Departme…

The Department’s fraud and error statistics show that the biggest growth area for Universal Credit...

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 … Read more

Government Response

HM Treasury

View details

12 Conclusion Rejected

Twenty-Sixth Report - The Departme…

We asked the Department whether it had considered explanations for failure to engage other than...

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 … Read more

Government Response

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.

HM Treasury

View details

14 Conclusion Rejected

Twenty-Sixth Report - The Departme…

We observed that some claimants may struggle to understand the Department’s communications and use its...

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 … Read more

Government Response

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.

HM Treasury

View details

15 Conclusion Rejected

Twenty-Sixth Report - The Departme…

In May 2022 the Department published its strategy to reduce fraud and error following the...

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 … Read more

Government Response

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.

HM Treasury

View details

16 Conclusion Rejected

Twenty-Sixth Report - The Departme…

We questioned the Department on the challenges it may face in implementing its strategy.

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 … Read more

Government Response

HM Treasury

View details

17 Conclusion Rejected

Twenty-Sixth Report - The Departme…

We have previously recommended that the Department should communicate to Parliament what additional powers or...

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 … Read more

Government Response

HM Treasury

View details

18 Recommendation Rejected

Twenty-Sixth Report - The Departme…

During our examination of the Department’s 2020–21 Annual Report and Accounts we concluded that the...

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 … Read more

Government Response

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

View details

Government Response AI assessment · 31 of 15 classified

Accepted 12

Acknowledged 5

Not Addressed 2

Rejected 12

Total 15 recs + 16 conclusions