Department for Work and Pensions Accounts 2019-20

Public Accounts Committee Closed Inquiry
Opened: 27 Jul 2020 Closed: 14 Sep 2020 Parliament page
For 32 years running, the National Audit Office has had to “qualify” the annual accounts of the Department for Work and Pensions (DWP) because of the rate and level of error and fraud in the Department’s payment of benefits. In its report on DWP’s accounts for 2019-20, the NAO says … Read more
3 Recommendations
30 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 6 events
25 Oct
2021
Correspondence
10 Jun
2021
Correspondence
25 Mar
2021
Report published
18 Nov
2020
Report published
24 Sep
2020
Oral evidence
24 Sep
2020
Formal meeting (oral evidence session) · The Boothroyd Room, Portcullis House
Oral evidence sessions 1 session
24 Sep 2020
View on parliament.uk
Department for Work and Pensions Accounts 2019-20
Bozena Hillyer · Department for Work and Pensions Neil Couling · Department for Work and Pensions Nick Joicey · Department for Work and Pensions Peter Schofield · Department for Work and Pensions
Title HC No. Published Items Response
Twenty-Sixth Report - Department of Work and Pensions Accounts 2… HC 681 18 Nov 2020 33 Responded
Recommendations & Conclusions
33 results
2 Recommendation
Twenty-Sixth Report - Department o…
Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around...
Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. The estimated overpayment rate, excluding State Pension, now stands at 4.8% (£4.5 billion) of benefit expenditure of … Read more
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3 Conclusion
Twenty-Sixth Report - Department o…
COVID-19 will lead to further increases in fraud and error.
COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. In addition to 6 Department for Work and Pensions Accounts 2019–20 any rise in the level … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department accepts that its response to the COVID-19 pandemic has presented an opportunity to evaluate the … Read more
HM Treasury
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4 Conclusion
Twenty-Sixth Report - Department o…
The Department cannot demonstrate that it is doing everything that is cost- effective to tackle...
The Department cannot demonstrate that it is doing everything that is cost- effective to tackle fraud and error. The National Audit Office’s work in 2019–20 on the Department’s strategy to tackle fraud and error showed that the Department could do … Read more
Government Response
2020. The department is revising the structures through which the contracts are managed to ensure that roles are more clearly defined and sufficiently resourced for all aspects of contract management … Read more
HM Treasury
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5 Recommendation
Twenty-Sixth Report - Department o…
The Department has made slower progress on some causes of fraud and error; this is...
The Department has made slower progress on some causes of fraud and error; this is sometimes due to legislative and regulatory restrictions. There are specific risk areas such as capital, living together, self-reported and self-employed earnings Department for Work and … Read more
HM Treasury
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6 Recommendation
Twenty-Sixth Report - Department o…
As at 31 March 2020, the Department was owed £5.3 billion from benefit overpayments, benefit...
As at 31 March 2020, the Department was owed £5.3 billion from benefit overpayments, benefit advances and Tax Credits debt. This number continues to increase rapidly. As at 31 March 2020, the Department was owed: benefit overpayments of £2.6 billion; … Read more
HM Treasury
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7 Conclusion
Twenty-Sixth Report - Department o…
The people that are being overpaid and underpaid are amongst those least likely in society...
The people that are being overpaid and underpaid are amongst those least likely in society to be able to pay the money back or absorb an underpayment. The nature of means tested benefits means people entitled to receive the benefits … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: Spring 2021 7.2 The department agrees that it needs to recover money efficiently without disadvantaging customers. As part of the … Read more
HM Treasury
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1 Conclusion
Twenty-Sixth Report - Department o…
We took evidence from the Department for Work & Pensions (the Department) based on its...
We took evidence from the Department for Work & Pensions (the Department) based on its 2019–20 Accounts, and the Comptroller and Auditor General’s audit certificate and report contained within that document.1
Government Response
1: PA C conclusion: In response to the COVID-19 pandemic, the Department successfully proces sed millions of new benefit claims and will need to be prepared for probable further increa … Read more
HM Treasury
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8 Conclusion
Twenty-Sixth Report - Department o…
The Department’s figures show that payment timeliness was maintained at around pre-COVID-19 levels.
The Department’s figures show that payment timeliness was maintained at around pre-COVID-19 levels. Its preliminary statistics show that 89% of new claims were paid on time and in full from 1 March 2020 to 26 May 2020.13 This followed the … Read more
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9 Conclusion
Twenty-Sixth Report - Department o…
The Office for Budget Responsibility’s Fiscal Sustainability Report (July 2020) outlines that ‘unemployment is likely...
The Office for Budget Responsibility’s Fiscal Sustainability Report (July 2020) outlines that ‘unemployment is likely to be materially higher for several years’ and forecasts that unemployment will significantly increase from its current level (it assumes 15 per cent of people … Read more
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10 Conclusion
Twenty-Sixth Report - Department o…
Benefit overpayments are at their highest estimated rates and have risen consistently since 2015–16.
Benefit overpayments are at their highest estimated rates and have risen consistently since 2015–16. Excluding State Pension, the estimated rate of overpayments increased again to 4.8% (£4.5 billion) of estimated benefit expenditure of £93.1 billion for 2019–20, from a restated … Read more
Government Response
2: PAC Conclusion: Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. 2: PAC recommendation: The … Read more
HM Treasury
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11 Conclusion
Twenty-Sixth Report - Department o…
The Department does not currently have a target rate of fraud and error for us...
The Department does not currently have a target rate of fraud and error for us to use to hold it to account. However, the Department does now “absolutely accept in principle” that it should have a target “given the level … Read more
Government Response
2: PAC Conclusion: Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. 2: PAC recommendation: The … Read more
HM Treasury
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12 Conclusion
Twenty-Sixth Report - Department o…
Universal Credit has the highest estimated overpayment rate of all measured benefits—9.4% (£1.7 billion) for...
Universal Credit has the highest estimated overpayment rate of all measured benefits—9.4% (£1.7 billion) for 2019–20—and it has an estimated underpayment rate of 1.1% (£0.2 billion). This is the highest recorded overpayment rate for any benefit other than Tax Credits … Read more
Government Response
2: PAC conclusion: Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. 2: PAC recommendation: The … Read more
HM Treasury
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13 Conclusion
Twenty-Sixth Report - Department o…
Even before the impact of COVID-19 the Department had not yet delivered the value of...
Even before the impact of COVID-19 the Department had not yet delivered the value of savings on fraud and error on which the Business Case for Universal Credit was based.26 As these were intended to be annually recurring savings, every … Read more
Government Response
2: PAC conclusion: Even before COVID-19, fraud and error overpayments were at their highest ever rates, with around £1 in £10 of Universal Credit paid incorrectly. 2: PAC recommendation: The … Read more
HM Treasury
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14 Conclusion
Twenty-Sixth Report - Department o…
The Department informed us that “many more claims naturally means more fraud and error in...
The Department informed us that “many more claims naturally means more fraud and error in the system”.29 The Department reported that the number of people on Universal Credit almost doubled from 2.9 million in February to 5.6 million in August … Read more
Government Response
3: PAC conclusion: COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. 3: PAC recommendation: … Read more
HM Treasury
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15 Conclusion
Twenty-Sixth Report - Department o…
The Department acknowledges that the easements to controls it has made to respond to the...
The Department acknowledges that the easements to controls it has made to respond to the pandemic will increase fraud and error more than would otherwise be expected by the increase in claims. It has produced a range of estimates of … Read more
Government Response
3: PAC conclusion: COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. 3: PAC recommendation: … Read more
HM Treasury
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16 Conclusion
Twenty-Sixth Report - Department o…
The Department informed us that it has taken steps to mitigate the impact of these...
The Department informed us that it has taken steps to mitigate the impact of these easements. It said it believes the key thing is to have a real-time data feed that enables it to check that the mitigations it has … Read more
Government Response
3: PAC conclusion: COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. 3: PAC recommendation: … Read more
HM Treasury
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17 Conclusion
Twenty-Sixth Report - Department o…
However, whether these detection activities are successful does not inform us about the impact on...
However, whether these detection activities are successful does not inform us about the impact on the underlying rate of fraud and error. The Department reported that due to the redeployment of its staff to tackle the surge of claims and … Read more
Government Response
3: PAC conclusion: COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. 3: PAC recommendation: … Read more
HM Treasury
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18 Conclusion
Twenty-Sixth Report - Department o…
The Department also informed us that as of July, after redeploying staff back into measurement...
The Department also informed us that as of July, after redeploying staff back into measurement activities, it has been measuring fraud and error on Universal Credit and it is also undertaking measurement work on other benefits such as Pension Credit … Read more
Government Response
3: PAC conclusion: COVID-19 will lead to further increases in fraud and error. The Department has an opportunity to learn from the impacts of its control easements. 3: PAC recommendation: … Read more
HM Treasury
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19 Conclusion
Twenty-Sixth Report - Department o…
The National Audit Office’s (NAO’s) work in 2019–20 on the Department’s strategy to tackle fraud...
The National Audit Office’s (NAO’s) work in 2019–20 on the Department’s strategy to tackle fraud and error showed that the Department has a good understanding of the types of fraud and error that occur in the benefit system, but that … Read more
Government Response
4: PAC conclusion: The Department cannot demonstrate that it is doing everything that is cost- effective to tackle fraud and error. 4: PAC recommendation: The Department needs to be able … Read more
HM Treasury
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20 Conclusion
Twenty-Sixth Report - Department o…
The Department told us that it wants to get to the point where its accounts...
The Department told us that it wants to get to the point where its accounts are no longer qualified. It acknowledged that it is not where it wants to be, but said it knows what it needs to do.40 It … Read more
Government Response
4: PAC conclusion: The Department cannot demonstrate that it is doing everything that is cost- effective to tackle fraud and error. 4: PAC recommendation: The Department needs to be able … Read more
HM Treasury
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21 Conclusion
Twenty-Sixth Report - Department o…
The Department’s fraud and error strategy relies on modernising its technology and putting more investment...
The Department’s fraud and error strategy relies on modernising its technology and putting more investment into data and data analytics. It told us that “we really do see that putting more investment into data, into data analytics and into that … Read more
Government Response
4: PAC conclusion: The Department cannot demonstrate that it is doing everything that is cost- effective to tackle fraud and error. 4: PAC recommendation: The Department needs to be able … Read more
HM Treasury
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22 Conclusion
Twenty-Sixth Report - Department o…
The Department launched its Risk and Intelligence Service (RIS) in April 2018 and reported that...
The Department launched its Risk and Intelligence Service (RIS) in April 2018 and reported that it was using ‘increasingly sophisticated data and analytical tools’ to tackle fraud and error.43 In response to COVID-19, the Department absorbed the work of RIS … Read more
Government Response
4: PAC conclusion: The Department cannot demonstrate that it is doing everything that is cost- effective to tackle fraud and error. 4: PAC recommendation: The Department needs to be able … Read more
HM Treasury
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23 Conclusion
Twenty-Sixth Report - Department o…
The Department told us that it is starting to build a system that is based...
The Department told us that it is starting to build a system that is based on ‘transaction risking’; its vision is to be in a place where it can, in real time, or near real time, assess every claim as … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 4.2 The department is able to track the effectiveness of new technologies. The department is also conscious of … Read more
HM Treasury
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24 Conclusion
Twenty-Sixth Report - Department o…
There are specific risk areas such as capital, living together, self-reported and self- employed earnings...
There are specific risk areas such as capital, living together, self-reported and self- employed earnings where the Department admits it is harder to tackle fraud and error, in part due to the lack of access it has to timely, accurate … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 5.2 Latest figures for 2019-20 show that undeclared capital accounted for 22%, equating to £881 million, of all … Read more
HM Treasury
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25 Conclusion
Twenty-Sixth Report - Department o…
The Department told us that the big fraud and error saving that it knew would...
The Department told us that the big fraud and error saving that it knew would come from Universal Credit is using real-time information (RTI) on earnings from HMRC in an automated way to calculate the award, and that it ‘knows’ … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 4.2 The department is able to track the effectiveness of new technologies. The department is also conscious of … Read more
HM Treasury
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26 Conclusion
Twenty-Sixth Report - Department o…
The Department has powers that allow it to ask for the information that it needs...
The Department has powers that allow it to ask for the information that it needs when it is doing an individual compliance investigation, but it does not have legal access to the same level of information for the controls it … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 5.2 Latest figures for 2019-20 show that undeclared capital accounted for 22%, equating to £881 million, of all … Read more
HM Treasury
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27 Conclusion
Twenty-Sixth Report - Department o…
The Department’s accounts show that as at 31 March 2020, claimants owed it £5.3 billion...
The Department’s accounts show that as at 31 March 2020, claimants owed it £5.3 billion from benefit overpayments (£2.6 billion), benefit advances (£1.0 billion) and Tax Credits (£1.8 billion). This represents a significant annual increase of 39% (£1.5 billion) on … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 6.2 The department can recover debt in various ways, including directly from benefits, from earnings via a Direct … Read more
HM Treasury
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28 Conclusion
Twenty-Sixth Report - Department o…
Evidence suggests that the amounts claimants owe from benefit overpayments, benefit advances and Tax Credits...
Evidence suggests that the amounts claimants owe from benefit overpayments, benefit advances and Tax Credits are all likely to increase further in 2020–21. The Department temporarily suspended most debt recovery in March 2020 and reintroduced the recovery of new overpayments … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 6.2 The department can recover debt in various ways, including directly from benefits, from earnings via a Direct … Read more
HM Treasury
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29 Conclusion
Twenty-Sixth Report - Department o…
We are concerned about the risk associated with trying to reclaim an overpayment and the...
We are concerned about the risk associated with trying to reclaim an overpayment and the time it takes to recover an overpayment. The Department told us that it has “very good and wide-ranging powers in terms of debt recovery” and … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 6.2 The department can recover debt in various ways, including directly from benefits, from earnings via a Direct … Read more
HM Treasury
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30 Conclusion
Twenty-Sixth Report - Department o…
Fraud and error have an impact on people’s lives; when the Department recovers overpayments, this...
Fraud and error have an impact on people’s lives; when the Department recovers overpayments, this can lead to problems for claimants who face deductions from their income, whereas underpayments mean that households do not get the support they are entitled … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: Spring 2021 7.2 The department agrees that it needs to recover money efficiently without disadvantaging customers. As part of the … Read more
HM Treasury
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31 Conclusion
Twenty-Sixth Report - Department o…
For a means tested benefit such as Universal Credit, people entitled to receive the benefit...
For a means tested benefit such as Universal Credit, people entitled to receive the benefit will be those in society with lower incomes and savings.64 The National Audit Office’s (NAO’s) recent study on Universal Credit: getting to first payment found … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: Spring 2021 7.2 The department agrees that it needs to recover money efficiently without disadvantaging customers. As part of the … Read more
HM Treasury
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32 Conclusion
Twenty-Sixth Report - Department o…
The Department reports that it is able to identify claims impacted by its temporary easements...
The Department reports that it is able to identify claims impacted by its temporary easements to controls, and that therefore it can revisit these claims to raise any resulting over (or under) payments that might have occurred; it reports that … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department accepts that its response to the COVID-19 pandemic has presented an opportunity to evaluate the … Read more
HM Treasury
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33 Conclusion
Twenty-Sixth Report - Department o…
In response to COVID-19, many staff within the Department’s Counter Fraud and Compliance Directorate were...
In response to COVID-19, many staff within the Department’s Counter Fraud and Compliance Directorate were redeployed, meaning the Department temporarily paused compliance work.69 As it restarts its compliance activity the Department should be aware of the lessons from NAO’s Investigation … Read more
Government Response
The government agrees with the Committee’s recommendation. Target implementation date: July 2021 3.2 The department accepts that its response to the COVID-19 pandemic has presented an opportunity to evaluate the … Read more
HM Treasury
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Correspondence 2 letters
25 Oct 2021 Correspondence from Peter Schofield CB, Permanent Secretary, Department for Work and Pensions, re TM26 DWP Accounts 2019/2020 Recommendation 2, dated 22 September 2021
Parliament page
10 Jun 2021 Correspondence from Peter Schofield CB, Permanent Secretary, Department for Work and Pensions, re TM26 – DWP Accounts 2019/20 – recommendation 7, dated 28 May 2021
Parliament page