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
12 Recommendations
21 Conclusions
1 Report
1 Oral session
2 Letters
1 Event
Activity timeline 5 events
25 Oct
2021
Correspondence
10 Jun
2021
Correspondence
25 Mar
2021
Report published
18 Nov
2020
Report published
24 Sep
2020
Oral evidence
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
22 results
Clear
3 Recommendation Accepted
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 and will report both the total level of fraud and error, and the specific impact of COVID-19 control easements, in its Annual Report and Accounts for 2020–21, with a target implementation date of July 2021.
HM Treasury
View details
5 Recommendation Accepted
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
Government Response
The government accepts the recommendation, stating it has explored options for new legislative powers through a cross-government function and is developing non-legislative measures. It commits to bringing any proposed legislative changes to Parliament for scrutiny.
HM Treasury
View details
6 Recommendation Accepted
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
Government Response
The government accepts the recommendation and commits to providing additional information in its annual report and accounts, detailing different debt recovery options, sums attributable to each method, and outstanding debt stock.
HM Treasury
View details
7 Recommendation Accepted
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 accepts the recommendation, committing to using financial data to identify vulnerable customers, implementing the 'Breathing Space' policy in 2021, and analyzing root causes of underpayments. An update will be provided by Spring 2021.
HM Treasury
View details
1 Recommendation Accepted
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
The government agrees and states the recommendation is implemented, explaining that the Department has learned from its successful response to the pandemic and has strengthened capability, implemented a three-wave plan, and developed strategies for future surges.
HM Treasury
View details
9 Conclusion Accepted
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
Government Response
The government states it has already implemented measures to prepare for future surges in benefit claims, detailing its flexible response to the pandemic, staff redeployment, and a three-wave plan to increase capacity and manage demand.
HM Treasury
View details
11 Conclusion Accepted
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
The government agrees with the committee's recommendation to set annual targets for fraud and error, committing to publish a target for 2021-22 following detailed sampling work to establish a baseline after the COVID-19 pandemic, and will consider lower-level targets.
HM Treasury
View details
14 Conclusion Accepted
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
The government agrees with the associated recommendation, committing to report both the total level of fraud and error in the benefit system, distinguishing the impact of control easements from other COVID-19 impacts, and assessing the cost-effectiveness of controls in its Annual Report and Accounts for 2020-21 by July 2021.
HM Treasury
View details
15 Conclusion Accepted
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
The government accepts the implied recommendation to report on the impact of control easements and the pandemic on fraud and error, stating it is working to separate and set out these impacts in the Annual Report and Accounts.
HM Treasury
View details
17 Conclusion Accepted
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
The government agrees with the associated recommendation, committing to report both the total level of fraud and error in the benefit system, distinguishing the impact of control easements from other COVID-19 impacts, and assessing the cost-effectiveness of controls in its Annual Report and Accounts for 2020-21 by July 2021.
HM Treasury
View details
18 Recommendation Accepted
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
The government accepts the recommendation and commits to reporting the impact of the pandemic and its control easements on Universal Credit losses in the Annual Report and Accounts, distinct from existing fraud and error levels.
HM Treasury
View details
19 Recommendation Accepted
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
The government agrees to monitor and report on the impact and cost-effectiveness of its fraud and error initiatives and new technology, confirming benefit realisation plans are in place to track outcomes and commit to addressing potential bias in its approaches.
HM Treasury
View details
20 Conclusion Accepted
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
The government agrees to monitor and report on the impact and cost-effectiveness of its fraud and error initiatives and investment in new technology, which aligns with the department's stated aim to achieve cost-effective controls and avoid qualified accounts.
HM Treasury
View details
21 Conclusion Accepted
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
The government agrees with the associated recommendation, committing to track the effectiveness of new technologies, use a Data Science Ethics Framework to address bias in machine learning, and provide an update on how it uses data to tackle loss in the annual report and accounts by July 2021.
HM Treasury
View details
22 Conclusion Accepted
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
The government agrees to monitor and report on the impact and cost-effectiveness of its fraud and error initiatives and new technology, confirming benefit realisation plans are in place to track outcomes and commit to addressing potential bias in its approaches.
HM Treasury
View details
23 Conclusion Accepted
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 observation on transaction risking, stating it has benefit realisation plans for this and other digital technologies within the new Fraud, Error and Debt Portfolio, with updates to be provided in annual reports.
HM Treasury
View details
24 Conclusion Accepted
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 observation on capital fraud, detailing ongoing efforts to explore new legislative powers for accessing bulk tax information from financial institutions and developing non-legislative measures like open banking to improve counter fraud activity.
HM Treasury
View details
25 Conclusion Accepted
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 response outlines its existing mechanisms for tracking the effectiveness of new technologies, monitoring fraud and error, and developing a Data Science Ethics Framework to address potential bias in predictive models.
HM Treasury
View details
26 Conclusion Accepted
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 acknowledges the committee's observation and confirms it is actively exploring options for new legislative powers and developing non-legislative measures to improve counter-fraud activity, through a cross-government function.
HM Treasury
View details
27 Conclusion Accepted
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 observation and commits to providing additional information in its annual report and accounts by July 2021, detailing different recovery options for overpayments, sums attributable to each method, and outstanding debt stock.
HM Treasury
View details
29 Conclusion Accepted
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 concerns regarding debt recovery, outlining current reductions in Universal Credit deduction limits, new online repayment tools (Repay My Debt), increased automation, and developing data analytics, while also committing to providing more recovery data in its annual report.
HM Treasury
View details
30 Recommendation Accepted
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 to address the concerns regarding vulnerable claimants, outlining actions such as identifying vulnerable customers using financial data, committing to the 'Breathing Space' policy due in 2021, and analyzing fraud and error root causes.
HM Treasury
View details
Government Response AI assessment · 33 of 12 classified
Accepted 22
Accepted in Part 3
Acknowledged 1
Deferred 1
Not Addressed 6
Total 12 recs + 21 conclusions
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