HMRC and DWP have shown “paucity of ambition” on tackling fraud and error, MPs say

Written by Suzannah Brecknell on 28 October 2015 in News

Public Accounts Committee calls for greater focus on preventing over- and underpayments

Government has shown a “paucity of ambition” in its work to tackle fraud and error in the benefits and tax credits systems, MPs said today.

A Public Accounts Committee (PAC) report called for a greater focus on preventing – rather than detecting and correcting – over- and underpayments resulting from fraud and error.

In 2013-14 HM Revenue & Customs (HMRC) and the Department for Work and Pensions (DWP) overpaid benefit and tax credit claimants by £4.6bn, and underpaid claimants by £1.6bn.

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PAC chair Meg Hillier said that against that background the committee “would expect to see government departments setting firm targets for reducing fraud and error”.

She continued: “Yet while HMRC has made progress in tackling tax credit fraud and error, it has no meaningful framework for making further progress during the transition to Universal Credit. This is not good enough. Similarly, the DWP must be far clearer in setting targets for reducing fraud and error for individual benefits.”

HMRC has reduced fraud and error in the tax credits system from 8.1% in 2010 to 4.4% in 2013-14 – an achievement described by the Public Accounts Committee today as “encouraging”.

The Department for Work and Pensions, however, has not met its overall target, with fraud and error making up 1.9% of benefit spending in 2015, rather than a target of 1.7%.

The report recommends that both departments should do more to understand why claimants make mistakes and develop stronger systems to prevent over-and underpayments.

It noted that between 2010 and March 2015 DWP spent just £27m of a planned £192m budget to prevent fraud and error.

This was largely due to the closure of the IRIS programme which aimed to identify risky claims, and the committee said DWP “was unable to explain clearly why it had stopped a programme which potentially would have saved more than it cost”.

MPs also questioned the way tax credits claimants are being treated by a private sector company employed to check claims, saying “we are concerned that the contractor’s approach has been over threatening”.

A government spokesperson said: “Since 2010, we have saved over £5bn by reducing fraud and error. Tax credits fraud and error has almost halved, while overpayments in the benefits system has fallen below 2% - to its lowest ever level.

 “The reforms we have made to the benefits system will better guard against fraudsters. Universal Credit and Real Time Information alone are expected to save the public purse £3.2bn a year and we will continue to tirelessly pursue and recover payments from the minority who do try to abuse the system.”

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Suzannah Brecknell is senior reporter for Civil Service World

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I'm H_A_P_P_Y (not verified)

Submitted on 28 October, 2015 - 12:38
So, the departments haven't reached their quotas - I wonder why ? Could part of the reason be the poor morlae due to the probably that they are under staffed; working with contractors with less experience and on lots more money; and 10 years of pay restraint? But, according to Sir Jeremy Heywood, we're all happy at work.

Cassandra (not verified)

Submitted on 28 October, 2015 - 14:15
Given the effect of policies over the last couple of decades, steering the Civil Service firmly toward a culture of bean counters and box tickers, a lack of strategic ambition is not much of a surprise. The rhetoric which exhorts us to use our creativity, intellect and drive as an engine for continuous improvement is not matched by pedestrian, target driven management and HR policies which select for the compliant over the challenger, the deferential over the discriminating and the reactionary over the risk taker. If error and fraud are to be effectively tackled then, sadly, probably the only way to do it is to define a few boxes for ticking. Staff on the front line (I'm thinking particularly of call centres) know more about customer behaviour than they're given credit for, and could hugely improve compliance levels if they were empowered to do they have a box to tick for "attempts to commit fraud intercepted"? Thought not. Just number of calls, time taken per call, taking a break at the right time etc etc et tedious cetera.

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