Select Committee on Work and Pensions Written Evidence

Annual Progress Report of the Error Reduction Task Force and the Benefit Simplification Unit


  1.1  In 2005-06, the Department for Work and Pensions paid over £115 billion in social security benefits to its customers. The vast majority was paid accurately, on time and to the right person.

  1.2  But sometimes we pay the wrong amount of benefit to customers. This is because our benefits are complex to administer, our IT is not as integrated as it could be, and our staff sometimes fail to follow our own procedures. As a result, in 2005-06, we overpaid an estimated £903 million through official error.

  1.3  When giving evidence on the National Audit Office report entitled "Dealing with the complexity of the benefits system" DWP's Permanent Secretary, Leigh Lewis, told the Public Accounts Committe in December 2005 that he was determined to reduce complexity and error in the benefits system.

  1.4  To achieve this goal DWP has subsequenly:

    —  set up a dedicated Task Force to, reduce official error;

    —  established a Benefit Simplification Unit to drive forward simplification across the benefit system; and

    —  developed a longer-term error reduction strategy to further improve benefit correctness. The error strategy is being published today (24 January 2007) alongside this report.

  1.5  This progress report provides an assessment of what has been achieved by the Task Force and the Benefit Simplification Unit at the end of their first year of operation.

  1.6  During 2006, the Task Force and the Unit worked closely to introduce a challenging work programme to help simplify the benefit system and to reduce the level of official error.

  1.8  The Benefit Simplification Unit has produced a Simplification Guide to Best Practice for the Department's staff, which sets out how complexity can occur and advises how it can be avoided. The guide also includes a new requirement that any proposed policy or operational changes to the benefit system have to be vetted by the Simplification Unit before being put to Ministers for consideration.


  2.1  The Task Force, comprising membership at senior level from across DWP, was established in January 2006 with the specific aim of reducing official error in the payment of IS, JSA, PC and Disability Living Allowance (DLA).


  2.2  The Task Force has analysed internal official error data and identified the "top 10" official errors in IS, JSA, PC and DLA, which together constitute around 60% of official error loss in these benefits. It has introduced a package of improvement initiatives targeted at reducing these errors. They include:

    —  the creation of dedicated action teams in Jobcentre Plus (JCP) to clear backlogs and deal with complex cases where error is more likely to occur;

    —  a programme of case-load cleansing in The Pension Service (TPS);

    —  the introduction by the Disability and Carers Service (DCS) of an enhanced checking regime to prevent error entering the system; and

    —  a number of IT system enhancements to help reduce official error further.

Measuring performance

  2.3  DWP publishes National Statistics estimates of fraud and error in IS, JSA, PC and Housing Benefit on a regular basis. The most recently published figures (November 2006) provided estimates for the year to September 2005 and thus pre-date the establishment of the Task Force. As corresponding National Statistics figures for the whole of 2006 will not be published until late 2007, the Task Force has developed a number of key performance indicators to enable it to gauge its impact on official error.

Impact of Task Force Error Cleansing

  2.4  Chart 1, below, illustrates the impact of the dedicated action teams in Jobcentre Plus and targeted case-load cleansing in The Pension Service. It shows, by October 2006, the value of overpayments identified and corrected by the Task Force had reached over £1 million a week. Although no two benefit claims are entirely the same and some of these overpayments would have been identified and corrected in the normal course of events, the vast majority would have continued for the remainder of the claim. Consequently, overpayments of around this weekly level would have continued had the work of the Task Force not resulted in their being corrected.

  2.5  Once the duration of each overpayment has been established and the total overpayment per case calculated, our analysis suggests that Jobcentre Plus action teams alone are likely to have achieved an estimated reduction in official error of around £10 million by the end of March 2007.

Reducing the amount of error in the system

  2.6  Chart 2 shows the volume of discrepancies, identified by comparing the information the Department has on its customers with other information sources, which relate specifically to the "top 10" errors targeted by the Task Force. This volume of discrepancies acts as a proxy for the amount of error in the system.[13] As we correct more error we would expect to see the number of discrepancies decrease over time.

  2.7  The chart indicates that between March 2006 and October 2006 the overall volume of discrepancies in Jobcentre Plus, the Disability and Carers Service and The Pension Service decreased by around 42%. This suggests that Task Force efforts to reduce the amount of targeted official error in IS, JSA, PC and DLA are being successful.

  2.8  The chart below, which is based on all of the available information, shows a steady downward trend in our estimate of official error loss in all three benefits since Task Force improvement activities commenced in April 2006.[14]


  3.1  The Benefit Simplification Unit was created to act as a catalyst in driving forward simplification across the benefit system; to challenge existing complexity; and to ensure that the benefit system operates in ways that customers and staff can understand.

  3.2  The Unit has a complement of four full time staff. A secondee from Citizens Advice joined the unit in June 2006 for eight months.

  3.3  The Unit's initial remit is to:

    —  ensure that the benefit system is informed by an increasing understanding of how the system works for the Department's customers, their advocates, other service users and the staff who administer benefits;

    —  work closely with those proposing benefit changes to ensure that any move towards further complexity is challenged;

    —  take steps to reduce complexity in the current benefits system (both regulatory and operational); and

    —  consider the possibility of developing a measure of complexity in the system.


Embedding best practice

  3.4  As a first step the Benefit Simplification Unit has produced a Simplification Guide to Best Practice for the Department's staff, which was published in May 2006. The guide is intended to be used by staff developing new policies and operational procedures and is available on the Department's Internet site. The Unit consulted with staff and the Social Security Advisory Committee in developing the guide and the Committee agreed to a requirement that all Explanatory Memoranda submitted to it should include an assessment of the impact of the proposed measures on the complexity of the benefits system and its operation. In addition all DWP projects must now show in their Strategic Outline Business Cases how they have maximised the opportunity for simplification.

Raising awareness

  3.5  The Benefit Simplification Unit has set up a dedicated intranet site, with additional guidance and help for staff; an e-mail address for staff to forward ideas for change; and has completed a series of road shows across the Department to raise awareness of the simplification agenda. Feedback to the road shows has been extremely positive.

Understanding the customer viewpoint

  3.6  This area of work has to date been led by the Unit's secondee from Citizens Advice. Its focus has been to try to appreciate what would make the benefit system simpler from a customer perspective. It has followed a customer's journey through the system, from identifying a potential entitlement to benefit, moving through the making and maintaining of their claim to, where applicable, their return to work. Discussion has been held with customer advocates to determine the difficulties that complexity causes them and their customers and to identify potential easements. The Unit also ran workshops during August and September 2006 where policy representatives from the voluntary sector were asked to put forward their views on the problems which different customers can experience at each stage of the journey and their suggestions for making the system simpler and more accessible.

Blocking moves towards greater complexity

  3.7  The Simplification Guide included a new requirement that all submissions and scoping papers that recommend policy or operational changes to benefits, other than pensions, must be referred to the Unit before they are submitted to Ministers. Staff are required to include a specific section in submissions detailing the impact of the change on benefit complexity and, if the proposal will lead to increased complexity, a clear explanation as to why this particular option is being recommended. Where the Unit believes that the explanation provides insufficient justification its view will be recorded.

Implementing quick win simplifications

  3.8  During 2006 the Department made a number of changes which have reduced the complexity of the benefit system. These include improvements to the Social Fund scheme; increasing the savings limit for budgeting loan applicants; aligning the treatment of charitable/voluntary/personal injury income across benefits; abolishing the requirement to down rate some benefits after 52 weeks in hospital; revoking wholly or in part over 200 statutory instruments introduced since the start of the Housing Benefit scheme in 1988 making it easier for customers and staff to understand the benefit rules; and aligning the capital limits across the working age benefits.

  3.9  In December of 2006, the Pre-Budget Report announced both the removal of Adult Dependency Increases in Carers Allowance for new claims from 2010, thus increasing consistency in the system by aligning with the planned treatment of such increases within other benefits, and an extension of Job Grant arrangements to JSA customers under the age of 25 years, who were previously excluded, thus equalising the terms of the Job Grant for all working age benefit recipients over 18.

  3.10  In addition the Unit has been working closely with operational colleagues to identify a number of changes that will smooth operations and service to customers. For example, the current verification frameworks for Income Support and Jobseeker's Allowance require customers to provide certain evidence again if they move between benefits. This can cause delays in processing their claim, resulting in poor customer service, complaints from customers and pressure on staff. We aim to remove this burden and help smooth the transition between these benefits, simplifying the process for both customers and staff alike.

Developing a cross Departmental and Government consensus

  3.11   The Unit has also supported a series of projects and initiatives to promote simplification across the Department and is working with the Department's Fraud and Error Strategy Division, its Risk Assurance Division and the Better Regulation Unit to identify and tackle unnecessary complexity in rules, processes and legislation.

Measuring complexity in the system

  3.12  The Department has given a commitment to investigate whether it is possible to produce a measure of benefit complexity. The Unit has been working with the Department's analysts to establish if a benefit complexity index can be developed that could be used over a period of time to assess progress towards benefit simplification. Their initial finding is that there is no single metric that would give a clear measure of complexity. Work is now proceeding to establish whether a suitable collection of data from different sources could provide a reliable measure.


  4.1  As set out in this note, the Task Force and the Benefit Simplification Unit have achieved some significant progress in a relatively short period but there is, of course, more to be done to simplify the benefit system and further reduce levels of official error. The Department's Permanent Secretary has therefore decided that the Task Force will run for at least another year and has asked it to seek to introduce further improvement that builds on the good progress made in its first year of operation.

  4.2  In 2007, the Benefit Simplification Unit will adopt in parallel a four-fold strategy aiming to:

    —  block needless further complication of the benefit system;

    —  lighten the burden on our customers and staff by:

    —  cutting and streamlining operational procedures; and

    —  helping customers to navigate their way through the system more easily, for example by making it easier for them to understand and make use of financial incentives to work;

    —  prompt and help Departmental colleagues to exploit opportunities for simplification when benefits are reformed; and

    —  establish the scope for longer term reform in the shape of fewer, more streamlined rules.

  4.3  During 2007 the Unit will also focus on maintaining the impetus on the simplification agenda and consider other means to ensure that the drive for simplification is "mainstreamed" into all aspects of the Department's work.


  5.1  The Task Force and the Benefit Simplification Unit have successfully implemented challenging work programmes in 2006 that will impact positively on the level of official error and complexity.

  5.2  The Task Force's performance indicators suggest its activities are already reducing the amount of official error in the benefits system. This is supported by other performance indicators which appear to show an overall downward trend in the level of overpaid expenditure in IS, JSA and PC.

  5.3  The Benefit Simplification Unit has produced a Simplification Guide and put in place a mechanism for ensuring that any new proposed policy or operational changes to benefits are vetted by them first. The need to avoid introducing complexity is now an integral part of policy development.

  5.4  Plans are in place, or are being developed, to build on this work during 2007 in order to continue bearing down on official error and complexity.

January 2007

13   Only a proportion of these discrepancies will result in an official error. Back

14   Chart 3 is based on forecasted estimates which are not directly comparable with Office of National Statistics reports detailing performance against DWP fraud and error targets. Back

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