Worst audit report for the Department for Work and Pensions in 33 years

A damning loss of control of Universal Credit payments has meant that the Department for Work and Pensions has received a drubbing from the ministry’s auditors, the National Audit Office, and led to its accounts being qualified for 33rd year in succession.

While the ministry has been praised for its swift response to the pandemic by uplifting Universal Credit by £20 a week and coping with a doubling of people on the benefit, the grim costs to the ministry’s finances are revealed in its annual report.

Overpayments on Universal Credit have skyrocketed, criminal gangs have targeted business payments and the ministry has had to set aside £1 billion to pay 132,000 pensioners who have been underpaid their pensions for up to 30 years.

A new problem of identity theft of some 5000 claimants has also hit Universal Credit leaving some claimants losing benefit for weeks.

Overpayments hit record £8.3 billion

DWP estimates it overpaid £8.3 billion of the £111.4 billion that it spent on benefits in 2020-21, an increase of £3.8 billion on the previous year. The rate of overpayments increased from 4.4% in 2019-20 to 7.5% in 2020-21. Nearly all of the increase in fraud and error was on Universal Credit. DWP estimates it overpaid £5.5 billion of Universal Credit (14.5%) and underpaid £540 million (1.4%).

The NAO reports: “DWP has identified four key fraud and error risks within Universal Credit that it needs to tackle, as they are the largest causes of fraud and error. It is looking to improve controls over incorrectly reported self-employment earnings, savings, living arrangements and housing costs. It has also identified several organised criminal attacks during the pandemic, with fraudsters targeting Universal Credit in particular and making claims in other people’s names.

The Department is owed £5 billion of overpayments, placing additional strain on its resources and potentially causing uncertainty and hardship to claimants. It is not sure how much of its estimated loss of £8.4 billion in 2020-21 it will recover, as it has attempted to recover only 10% of the estimated loss in the last 5 years.”

The ministry is now having to bring in more staff to sort out the fraudulent claims and a criminal investigation has been launched.

On the underpayment of pensions the ministry has promised to pay the people by the end of next year.

Gareth Davies, NAO head ” fraud and error at record levels”

The NAO report says: “The Department commissioned a root cause analysis to understand the cause of these underpayments. This analysis identified a range of process and control issues including poor staff training, instructions and quality review that led to the underpayments. These issues have also affected the Department’s initial work to quantify and rectify errors. The Department has asked the Government Internal Audit Agency to review State Pension legislation to ensure there are no further entitlements that may be underpaid.”

“The impact of this underpayment on the individual pensioners is significant, and it is vital the Department learns lessons to avoid systemic underpayments in the future and correct past underpayments.”

Gareth Davies, the head of the NAO, said:

“I am concerned that the level of fraud and error in the benefits system continues to increase year on year, now reaching its highest level since records began. This has a real impact on public funds and on those who face deductions to their income due to overpayments.

“I recognise that the pandemic and the resulting surge in the number of claimants has increased DWP’s exposure to fraud and error. It must now review all cases that could have been subject to fraud during this time, whilst continuing to progress our past recommendations on how to reduce fraud and error.”

10 thoughts on “Worst audit report for the Department for Work and Pensions in 33 years

  1. What about the 3.8 million 50s born women who are being robbed of 6 years worth of pension not a mention about us we are as invisible as we have always been…. the DWP needs a good shake up and needs to come into the 20th century and do the job its supposed to do instead of robbing Peter to pay Paul constantly and often. the majority of us pay into this system and we deserve a lot better than being robbed out of our rightful pensions etc. Leveling up!! THE TORY TOFFS have NO IDEA what that means when everything has become a birth lottery and dependant on where you live…. RANT OVER….

    Liked by 1 person

  2. Another good report damning the benefits and pensions administration…but what about repaying the ’50s women whose pensions were ‘stolen’ too!

    Liked by 1 person

  3. The problem with these ‘estimates ‘is they fail to break down how much of the overpayments were Fraudulent claims as opposed to Errors by staff – and the Price, will as always be passed on to and paid by genuine claimants;

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  4. Pay by the end of next year the DWP are saying. Surely this is not acceptable. These pensioners could be dead by then. Sorry to be so blunt.

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  5. Thanks David…..

    The DWP is too big for its boots but not its responsibilities!

    They may have done some things well – it IS their job after all – but the DWP is facing more Court action over its payment of £20 per week extra to UC recipients but testing other claimants differently. Aside from discrimination, it’s just crazy that this organisation can pick and choose who to pay correctly and abandon the rest.

    In its worst case scenario, we’ve seen a multitude of ‘mistakes’ on womens’ pensions…..for this lucky enough to receive it. How many pension mistakes have men had? I cannot remember one.

    Who had pension autocredits available to them for 35 years…..from Thatcher 80’s felling industry to 2018? Men were encouraged not to sign-on in exchange for NIC freebies and uprated State pensions for life. However Browns Government decided to leave men receiving this handout but decided not to allow women to access it equally. How did that happen? How did women get stiffed and ribbed of 6 whole years of their pensions when SPA was raised to the same as men but without access to everything including higher pay, higher pension pots and autocredits men had ‘as of right’ conferred on them.

    And the DWP handled it all – badly if you’re a women.

    There are 2 possibilities IMO either it’s run badly because management is rubbish and ‘systems’ non existent.
    Or
    It’s deliberate in poor service to the taxpayer public which pays the salaries of the lot of them..

    Mr Davies didn’t touch on the fact the system seems to have been created by men for men and with men at the top of the agenda.

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  6. What about the cock up with the 50s women’s pensions and the lies told. Most of us did not get letters and my pension age went up 6 years. I have worked for 50 years! DWP should be ashamed of themselves!

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  7. This comes as no surprise as the system was struggling before the pandemic. It’s easy to criticise the staff, but since they are working in a ruled bound organisation that as very little flexibility they should not be blamed for everything. Maybe the present system of targeting benefits should be replaced by a flat rate system and ID cards should be phased in for those of working age.

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  8. Whilst those on benefits have been overpayed, we, the 1950’s women who have worked since the age of 15 are having to wait for our state pension.
    Shame on the government. How could mistakes like this happen. There is certainly no encouragement for people to go out to work. I gave 40 years service to the NHS and worked very hard. There were and still are people on benefits that have never worked a day in their lives yet they have been and still are better off than me and many other hard working people. I know a lot of them!! Where is the justice??

    Like

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