DWP ‘not on track’ for achieving fraud and error reductions
The Department for Work and Pensions (DWP) is “not on track” for delivering its spending review target for reducing fraud and error, the National Audit Office (NAO) has revealed.
In its ‘Fraud and Error Stocktake’ report, the auditors found that, based on current estimates, the department has only been able to reduce overpayments to 1.9% of benefit spending. It had been set a target of 1.7%.
In comparison, HMRC aimed to reduce losses to 5.5% of tax credit spending by March 2015, and has already reduced losses below this level, and will “meet its target if it sustains or improves the current rate of fraud and error”.
NAO stated that the departments have implemented some major changes that should help to reduce fraud and error in the future. For example, DWP is introducing universal credit and other changes to the welfare system.
However, for the next five years, both departments will have to manage fraud and error during a long and complicated transition to universal credit.
Amyas Morse, head of the NAO, said: “For over 25 years we have highlighted concerns about fraud and error, and departments’ limited in-roads into the problem. The government continues to lose large amounts of money through fraud and error overpayments, reducing the money available for other purposes.”
In 2013-14, the DWP and HMRC overpaid benefits and tax credit claimants by £4.6bn because of fraud and error, and underpaid claimants by £1.6bn.
“There are many reasons to be optimistic about opportunities to reduce fraud and error, in particular through the use of real-time information and introduction of universal credit,” added Morse. “However, the full impact is still uncertain and it will be several years before universal credit is fully rolled-out. Departments need to build on recent efforts to develop more integrated and systematic responses to preventing fraud and error.”