Written evidence from the Department of
Work and Pensions
FOLLOW UP NOTE TO PAC HEARING ON ADMINISTRATIVE
ERRORS IN THE
BENEFIT SYSTEM
1. At the PAC Hearing on 8 December, I promised
to write in response to a number of the Committee's questions
concerning Housing Benefit and Council Tax Benefit fraud figures,
expenditure on Housing Benefit fraud investigation, incentives
for local authorities to investigate fraud, overpayment recoveries,
and links with SOCA. Also, more generally, I promised to provide
some information in relation to the Computer Weekly article referred
to at the hearing, which apparently stated that 19 of the DWP's
IT Projects were over budget or late, and on how the Department
scored in the most recent Capability Review.
2. Mr Barclay mentioned that fraud relating
to Housing Benefit and Council Tax Benefit was 1.2% in both 2005/06
and 2009-10. In 2005/06 the figure for both Housing Benefit and
Council Tax Benefit fraud was 1.0%. In 2009/10, the percentage
had increased slightly to 1.3% in Housing Benefit and 1.1% in
Council Tax Benefit. The monetary value over the same period increased
from £180m (£140m in Housing Benefit and £40m in
Council Tax Benefit) to £31 Om (260m Housing Benefit and
£50m Council Tax Benefit).
3. Mr Barclay also referred to official error
in Housing Benefit in 2009/10 as being £300 million. I have
been unable to identify the source of that figure as my Department's
published estimates show official error in 2009/10 to be £200m.
4. We estimate that it costs around £70m
a year to investigate local authority benefit fraud. Around £350m
in overpayments are recovered by local authorities each year.
However, this includes overpayments arising not just from fraud
but also from customer and official error.
5. Local authorities are incentivised to investigate
fraud. Where Housing Benefit has been paid fraudulently, reimbursement
from DWP to the local authority is reduced from 100% to 40%. This
encourages the local authority concerned to pursue recovery. Where
they recover the overpayment in full, they achieve 140% reimbursement
when taken together with DWP subsidy. In addition, local authorities
are further incentivised through being able to retain sums raised
from administrative penalties and through the provision of free
investigator training and prosecution services from DWP.
6. With regard to local authority links with
SOCA, I can confirm that accredited financial investigators within
local authorities can submit a request to SOCA to search the SARs
database on their behalf for information relevant to their specific
investigations.
7. In terms of the article in Computer Weekly
that reported on the hearing of the Work and Pensions Select Committee
on 19 November 2008 regarding DWP IT Procurement and that stated
that "19 IT projects at DWP were over-budget or late",
I can confirm that that these figures were not accurate.
8. The hearing was based on a National Audit
Office (NAO) memorandum, commissioned by the Work and Pensions
Select Committee: "Department for Work and Pensions: IT Programmes".
The memorandum noted that seven of the Department's 19 most significant
IT enabled projects were delivering at or below original budget
and on time; two more were being delivered on time, although over
their original budget, and another was under budget but over time.
9. Nine projects were at that time both over
their original budget estimate and taking longer than originally
anticipated to complete. However, the scope of five of these projects
had been altered significantly to meet changing business needs,
with consequent increases in budget and in the time required to
deliver. All changes had been agreed by the Department's governance
processes.
10. Since that hearing I am pleased to say that
the vast majority of the projects that had not already been completed
have been delivered successfully. They include the Pensions Reform
Delivery Programme; the Data Centre Strategy; the Jobseekers Regime
and Flexible New Deal; the Centralisation of Benefit Processing;
the Fraud Referrals and Interventions Programme and the Provider
Referrals and Payments project.
11. Interestingly, in his open letter to you
as outgoing chairman of the Public Accounts Committee, Edward
Leigh recognised, in respect of IT projects that: "there
is a wealth of best practice, advice and good examples such as
the Department for Work and Pensions' Pension Credit and Payment
Modernisation Programme."
12. Finally, regarding how the Department fared
in its last Capability Review, I can confirm that we last went
through a full Capability Review exercise in June 2008. The Department
was assessed as either well placed or strong in the following
seven areas:
- Ignite passion, pace and drive;
- Take responsibility for leading delivery and
change;
- Focus on outcomes;
- Base choices on evidence;
- Build common purpose;
- Develop clear roles, responsibilities and delivery
model(s); and
- Manage performance.
- The following three areas were identified for
further development:
- Set direction;
- Build capability; and
- Plan, resource and prioritise
13. The overall scores were an improvement on
the Department's previous, 2006, Capability Review and saw the
Department being assessed as one of the top scoring Government
Departments overall.
14. Separately, but in relation to the discussion
around the standards of training in the Department, it may be
helpful to draw your attention to this year's peer review of Departmental
performance against the Skills Strategy for Government. DWP came
fourth out of all Government Departments. For the third year in
succession we were in the top tranche of Departments and received
a score of over 90%.
10 December 2010
| 
