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
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
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;
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
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. OFFICIAL ERROR
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.
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.
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.
3. BENEFIT SIMPLIFICATION
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
take steps to reduce complexity in
the current benefits system (both regulatory and operational);
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.
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
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. NEXT STEPS
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
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
prompt and help Departmental colleagues
to exploit opportunities for simplification when benefits are
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
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.
13 Only a proportion of these discrepancies will result
in an official error. Back
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