The administrative burden of correcting historic mistakes in assessing claims for jobseekers’ allowance is expected to cost the Department for Work and Pensions £40m, its permanent secretary, Peter Schofield, has said.
DWP expected to spend around £21m in 2018-19, and a further £19m this financial year, reviewing around 320,000 benefit claims, Schofield said in a letter to parliament’s work and pensions committee.
The department estimates that as many as 105,000 people may have missed out on some of their Employment and Support Allowance – financial assistance paid to people who have a limited capacity to work because they are disabled or ill – between 2011 and 2014.
Last year DWP drafted in an extra 400 staff to help assess the cases and correct errors in calculating the means-tested part of the benefit, which arose from a national insurance error in 2011. Later in the year it redeployed a further 800 staff from within the department onto the exercise.
Schofield was responding to a question from the committee about how much this would cost the department. The cost of correcting the errors through repayments is already expected to cost the Treasury around £1.7bn by 2025.
His letter, dated 6 March, also showed some of the funding pressures facing his department. Schofield said 2019-20 was set to be the “most stretching year” of a four-year budget settlement decided at the 2015 Spending Review.
Schofield said the 2015 review awarded DWP only 95% of the DEL funding – the department’s discretionary budget – it required to deliver its departmental plan. It has therefore had to find “additional efficiencies” through, among other things, saving costs from third-party suppliers; a “more targeted approach” to spending on digital systems; and improving its use of technology.
The department’s spending budget for 2019-20 is £600m less than the previous year, Schofield said, “the lowest ever funding envelope for the department in recent history”.
“The plan will be challenging to deliver, and will require extremely close monitoring during the year to ensure we remain on track,” he said.