The Department for Work and Pensions’ efforts to return fraud-and-error rates to pre-pandemic levels are on course to deliver stronger results than previously expected, permanent secretary Sir Peter Schofield has told MPs.
Schofield told members of parliament’s Public Accounts Committee yesterday that the Office for Budget Responsibility’s latest forecast indicated more dramatic progress with wrong payments is being made.
Fraud and error in relation to welfare payments soared when controls were eased at the onset of the Covid-19 pandemic. In monetary terms, benefits overpayments were £9.5bn in 2024-25, including overpayments of the state pension.
DWP’s annual report and accounts in July showed the overpayment rate for flagship benefit Universal Credit was 9.7% in 2024-25, down from 12.4% the previous year – but still considerably above pre-pandemic levels.
New analysis from the OBR, published at last week’s Autumn Budget, projects that the Universal Credit overpayment rate will fall to 7.5% in 2028-29. Because Universal Credit accounts for around two-thirds of fraud and error related to benefit payments, that would be enough to return DWP to pre-pandemic levels.
Data published as part of March’s Spring Statement indicated that DWP could reduce its overall cross-welfare fraud-and-error rate to 3.1% by 2028-29, which would meet the pre-pandemic goal. However the latest projection represents a larger proportional reduction in wrong payments.
Schofield told MPs that the 7.5% projection for fraud in error related to Universal Credit implied an overall cross-welfare fraud-and-error figure of 2.8%.
“We are driving down fraud and error and we're seeing progress. We are doing what we set out to do,” the perm sec told MPs.
He acknowledged there was clearly “a lot more to do”, but said the OBR forecast gave a “sense of confidence” that fraud and error would not only continue to fall, but “fall to levels that we've not really seen before”.
The level of fraud and error in DWP is the main reason the department – and predecessor departments – has had its accounts qualified every year for the last 37 years. Continuing progress with reducing fraud and error could see that situation change.
Schofield told the PAC session that the OBR’s latest projection for fraud and error reduction included the impact of measures introduced at the Autumn Budget. Those included the extension of the timescale for the Targeted Case Review programme, and the expansion of its remit to cover Pension Credit.
PAC chair Sir Geoffrey Clifton-Brown asked Schofield whether DWP would treat the projection of a 2.8% cross-welfare fraud-and-error rate for 2028-29 as a “target”.
The perm sec replied: “This is what we’re going for, and it reflects what the OBR think our measures will achieve if we do them effectively and in the way in which we think we should.”
He added: “It doesn’t set out new things that we might develop going forward, but it is confidence in the things that we’ve already set out, that we’ve got funded for or that we’ve got legislation for.”