Satisfaction among people who used the Department for Work and Pensions’ services dropped to a five-year low last year, its annual report has shown.
Last year 81% of DWP customers and benefit claimants said they were either fairly or very satisfied with the service they received – the lowest level since 2013-14.
The fall from 84% in 2017-18 – after a peak of 86% the year before – was enough to be considered a “statistically significant change”, according to the report.
The drop in satisfaction coincided with a five-year low in the proportion of new claims for state pension and legacy benefits, including jobseekers’ allowance and disability living allowance, being processed on time as the department prepared to dial down some of these benefits with the rollout of Universal Credit.
Just 78% of new claims for these benefits were processed “within planned timescales”, the department said – down from 82% the year before and significantly lower than the 2015-16 peak of 90%. Planned timescales for processing claims range from five days for income support to 76 days for personal independence payments to support people with long-term health conditions.
The decline was down to a “drop in processing performance” across a number of services during a few points in the year, the department said.
It added: “The gateway for a range of legacy benefits began to close as the roll-out of Universal Credit began. As we did this we had to equalise the resource available to both the new and existing services.”
In contrast, DWP increased the proportion of new Universal Credit claims it paid out on time, from 78% in February 2018 to 86% a year later.
The report also showed that fraud and error, which have consistently been an issue for the department for the last two decades, remained a challenge in 2018-19.
Overpayments by the department to benefit recipients added up to 2.2% of its total benefit spending. Excluding state pension – where the error rate is low because it “has relatively simple conditions of entitlement” – overpayments came to 4.6% of the department’s £86.6bn budget bill.
Underpayments totalled 1.1% or £2.0 billion of total benefit expenditure. The gross underpayment level excluding State Pension stands at 2.2%.
Mistakes by the department, HM Revenue and Customs and local authorities were responsible for £1.4bn of the total fraud and error: £700m in overpayments and £700m in underpayments.
“It is error that the department can tackle through ensuring its people and systems operate effectively,” the report said.
DWP uses a system of quality assurance checks to catch these errors. “However there remains work to do here as these initiatives have not achieved a reduction in official error,” the report said.
In fact, there was a slight increase in underpayments due to official error, excluding state pension, from 0.6% to 0.7% of total non-state pension benefit payments. Overpayments due to official error stayed stable at 0.8% of the total.
The department has received a qualified opinion – a statement from an external auditor that suggests an organisation has fallen short of accounting principles – on its accounts every year since 1988-89 because of what the report called a “material level of fraud and error in benefit expenditure”.
“Errors do happen in a system of this scale and complexity,” the report said.
Last year the department recovered £1.1bn that had been overpaid, reducing the total amount lost to fraud and error to £3bn.
And the department said making progress in its fraud and error strategy would be a priority following an organisational restructure in April.
The monetary value of fraud and error was one of four “significant control challenges” highlighted by permanent secretary Peter Schofield in the report that had remained in place since the previous year.
Other ongoing challenges included keeping DWP’s systems and data safe, delivering Universal Credit and embedding and improving the department’s reform programme.
Schofield noted a June 2018 National Audit Office report that called for improvements in the department’s delivery of the flagship welfare reform, the evidence used to underpin it and transparency on its benefits.
The report said Universal Credit may never be value for money, but changes made across the department mean it is too late to reverse the programme.
Schofield said his department had been working on implementing the NAO’s recommendations, and that recent progress had given him “confidence about the ability to deliver Universal Credit safely and securely”.
“However, it remains an ongoing challenge due to the sheer scale and complexity of this major transformation programme.”
Maintaining IT services, highlighted in last year’s report, was no longer a significant challenge, Schofield said, thanks to “significant progress in transforming all our lines of business and refreshing our ageing IT infrastructure while delivering sustained service availability”.