Reducing errors in the benefits system - Public Accounts Committee Contents


3  Developing a systematic approach to reducing error

14. The Department currently has a range of initiatives under way to tackle error.[37] For example, Jobcentre Plus has introduced an intervention specifically targeted to identify and correct customer error in Income Support and Jobseeker's Allowance cases. This initiative, which started in June 2010, involves staff contacting customers to check for undeclared changes in circumstances.[38] However, the Department conceded that it does not have sufficient information to evaluate whether it could get a better rate of return on its investment in this intervention.[39]

15. The Department undertook cost-effectiveness assessments of some interventions in 2009 in order to determine the return from individual activities. The estimated cost of these interventions was £23 million. On the basis of its analysis the Department reported a saving of between £3 and £70 for each pound spent, with data matching activities providing the greatest return on investment.[40] However, the costs included in the assessments were not complete or consistent. Significant costs were omitted from the analysis, such as accommodation, IT costs and other associated overheads, as well as the cost of the work required to correct cases once mistakes had identified.[41] The Department told us that it is now developing a more robust approach using consistent cost estimates.[42]

16. In July 2009, the Department set up a Fraud and Error Council to coordinate efforts to reduce error.[43] The Council compiled a list of current and planned initiatives to tackle fraud and error in March 2010,[44] but the list did not contain complete or consistent information on the cost and benefits of its interventions. The Department conceded that it did not know which collection of initiatives would deliver a sustained reduction in fraud and error.[45] To rectify this, the Council has committed to a systematic review by Spring 2011 of each of the benefits to understand the causes of error and how they can target their interventions more effectively.[46]

17. In its recent White Paper, Universal Credit: Welfare that Works, the Government set out proposals to replace a number of existing benefits with the Universal Credit. [47] This reform is expected to simplify benefit administration substantially, thereby lessening the scope for mistakes to occur.[48] As a result, the Department expects Universal Credit to reduce losses from fraud and error by more than £1 billion per year in the long term. It is not yet clear what proportion of the projected savings is expected to come specifically from reductions in administrative error, particularly since the Department concedes there will always be some level of human error in the system.[49]

18. Implementation of Universal Credit is expected to take some time, given the 'radical re-engineering' of the system that it will involve.[50] The Department plans to introduce the new regime from 2013 onwards, and it could take up to ten years to implement fully.[51] The introduction of Universal Credit is unlikely to be in time to contribute much to the planned 25% reduction in fraud and error, and in the meantime the Department should ensure it maintains its commitment to reducing error through existing initiatives.


37   C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 2.9 Back

38   Q 167; C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 14 Back

39   Qq 22-23, 195 Back

40   Q 14; C&AG's report, Minimising the cost of administrative errors in the benefit system, Figure 8, page 30; C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 22 Back

41   C&AG's report, Minimising the cost of administrative errors in the benefits system, paras 3.22-3.23; C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 22 Back

42   Q127; C C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 22 Back

43   Q106; C C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 15 pg 8 Back

44   C&AG's report, Reducing losses in the benefits system caused by customers' mistakes, para 21  Back

45   Q 167 Back

46   C&AG's report, Reducing losses in the benefits system caused by customers' mistakes Back

47   Department for Work and Pensions, Universal Credit: Welfare that Works, Cm 7957, November 2010  Back

48   Q 3, 186 Back

49   Q 55 Back

50   Q 10 Back

51   Qq 8-11 Back


 
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