DWP management failures and ‘culture of indifference’ cost disability benefit claimants thousands, say MPs

Scathing Public Accounts Committee report finds department took years to act on underpayments despite staff raising concerns


Thousands of people owed disability benefits were underpaid due to failings at the Department for Work and Pensions, MPs have claimed.

A report from the Public Accounts Committee has found that an estimated 70,000 people claiming Employment and Support Allowance lost out on an average of £5,000 following “multiple failures” at the department.

MPs criticised the department for failing to create procedures that reflected the government's legislation, which left some claimants out of pocket by up to £20,000.


Arrangements for transferring people to ESA were fundamentally flawed and implemented without basic checks, according to MPs, while the department did not consider all the risks. The report also found the department’s senior officials failed to sign off the arrangements, with the process subsequently rushed, despite advice from experts such as the Social Security Advisory Committee that there should be a delay to ESA transferrals. 

Following the transition, some people who had been transferred were underpaid because they had been awarded ESA based on their National Insurance contributions only, when they might also have been entitled to ESA on income grounds and extra premium payments. The DWP announced on 14 December 2017 that it had established a special team to contact the people affected and pay back the money they are owed. It expects to pay around £340m in arrears by April 2019.

Underpayments amounted to an average of £5,000, but over 20,000 of those most in need are owed around £11,500 and some as much as £20,000, and the National Audit Office revealed 400 civil servants had to be redeployed to check around 300,000 claims.

According to the committee, the department failed to act “over a period of several years” on information and intelligence from its own frontline that the ESA transfer process was not working correctly.

The department acknowledged the error in ESA payments in its published fraud and error statistics in 2014, but frontline staff knew about the issue at least as early as 2013. Once the errors came to light, some in the department tried to classify them as the claimant’s fault, though it later accepted the mistake was its fault. In June 2014 it issued new guidance to correct the process for new cases but it did not act to put right existing underpayments until the department’s fraud and error team escalated the issue to senior management in November 2016. The department then took a further eight months before commissioning a team to begin identifying and repaying people affected, and only then following advice that it had a legal responsibility to act.

PAC chair Meg Hillier said this showed the department suffered from “weaknesses at the highest levels of management”.

The department’s “blinkered and wholly inept handling of ESA” resulted from a failure to listen to what claimants, experts, support organisations and even own staff were saying, she said.

“Its sluggishness in correcting underpayments, years after it accepted responsibility for the error, points to weaknesses at the highest levels of management. Indifference has no place in the delivery of vital public services. It must be rooted out wherever it is found."

MPs added that they were “not convinced” that ministers were serious about reducing the £1.7bn that is underpaid each year, claiming that the department was “abysmal” at communicating with claimants about changes to benefit programmes.

The report found that claimants were sent “incomprehensible” letters, and that even senior staff at DWP failed to understand the content of some letters being sent out.

“The department issues forms to claimants that did not make clear that claimants could be substantially better off if they were also entitled to ESA on income grounds”, the report concluded.

“Without this information, there is no reason why claimants would necessarily have known why it was important to contact the department about their benefits.”

Responding to the report, a spokesperson for DWP said: "We take the issue of underpayments very seriously and have actively taken steps to put this right as quickly as possible, to ensure people get the support they are entitled to. We have recruited 400 extra staff and have already started making payments - over £40m so far.

"We have continued to provide regular updates to both the PAC and the House in regard to the progress of these repayments, and will continue to do so."

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