Reducing errors in the benefits system - Public Accounts Committee Contents

Supplementary evidence from the Department of Work and Pensions

FOLLOW UP NOTE ON CUSTOMER ERROR

1.  At the PAC Hearing on Customer Error on 1 February, I agreed to write in response to questions from Mr Hancock and Ms Creasy on arrangements for visits to new claimants to Disability Living Allowance (DLA), and underpayments arising from customer error.

2.  Mr Hancock asked whether customers making a new claim to DLA were routinely visited. We do not routinely visit customers at the new claim stage as DLA claims are based on a self-assessment by the customer. However, the decision maker can request a range of additional evidence to help assess a new claim, including information from the customer's health care professional (eg the GP, hospital). Decision makers are also able to request that a health care professional visits the customer to provide an independent medical opinion where appropriate. There is, though, provision for local services to visit customers at their request to help complete claim forms.

3.  The Government's current consultation on DLA reform looks specifically at the assessment stage of a new claim, including the possibility—in the future—of a face-to-face meeting for all new claims.

4.  While we estimate the amount of fraud and error in DLA, we do not presently estimate how much is attributable to the initial claim. However, I have asked analysts to consider how we might be able to develop that data for the future.

5.  Separately, Ms Creasy asked if there was a target to reduce underpayments, and the budget to do so.

6.  We do not have a separate target to reduce underpayments, although we do routinely measure (and set targets for) the accuracy of decisions. Of course, the initiatives we have in place to address customer error, along with those we will be introducing in the future as part of the fraud and error strategy (announced in 2010), identify and correct both over and underpayments of benefit. For example, between April and December last year, one initiative to reduce error in Pension Credit found weekly underpayments totalling £23,000.

7.  Where underpayments are found they are rectified and arrears covering the whole period of the underpayment are paid to the customer as a matter of course. Since, as we discussed, benefit spending is treated by HM Treasury as Annually Managed Expenditure, such rectification of underpayments is not budget constrained.

8.  On a related point, to clear any residual confusion, the target to reduce fraud and error by 25% by 2015 is to reduce overpayments from fraud and error. So there are no perverse incentives on the levels of underpayments.

9.  Lastly, as promised, I have copied the costs and savings profile for the new fraud and error strategy to the National Audit Office.

February 2011

				Profiled DEL Spend (£m)						Profiled AME Savings (£m)
Funding Source	Name	Brief Description	Delivery Business	2010-11	2011-12	2012-13	2013-14	2014-15	Total	2010-11	2011-12	2012-13	2013-14	2014-15	Total AME Savings	MVFE Reduction	Customer Error MVFE Reduction
Spend to Save Phase 1—agreed funding	Business Rules Engine	Apply business rules at the point of claim to identify and prevent fraud and error from entering PC, IS and JSA	PDCS	5	10	2	2	2	21	3	12	21	29	29	94	26	7
	ATLAS	Notify local authorities automatically when a Tax Credit (or a range of other benefits) is awarded or when there is a change to an existing award.	WWG	13	3	1	1	1	20	0	85	100	100	75	360	130	81
	Pension Credit Case Cleanse	Reviewing complex pension credit cases to identify and correct error.	PDCS	5	0	0	0	0	5	24	0	0	0	0	24	22	3
	Right Payment Programme	Checking DLA cases outside of the usual checking cycle, focusing on those with the greatest propensity to change.		1	1	1	1	1	5	1	4	8	12	12	37	11	5
	Additional Pension GMP Correction	Correcting known errors made in the calculation of Additional Pensions with a Guaranteed Minimum Pension (GMP).		4	4	0	0	0	9	6	15	15	15	0	51	14	2
	JCP Call Cleanse—change of circumstances management	Making outbound telephone calls to a target group of customers to identify changes of circumstances based on a risk model	JCP	4	24	16	16	4	63	13	76	112	104	18	323	102	97
	JCP ESA Cleanse	Case cleansing to prevent IB error being carried into ESA on migration (staff based)		0	0	0	0	0	1	1	5	9	12	8	35	11	4
	JCP SDP	Establish a link between the Disability Living Allowance Computer System and the Income Support Computer System that will allow information regarding DLA awards to be routed to "process management" software.		0	0	1	1	0	3	1	3	4	5	0	13	5
	Debt Management: Reduction in Customers Awaiting Action	Scaling up of business as usual activity to reduce outstanding debt cases.	GFD	1	1	0	0	0	2	3	19	6	0	0	28	0	0
	Debt Management: Mining the Debt Stock	Investigating those customers that are neither in recovery or awaiting action.		3	5	1	0	0	9	6	37	21	0	0	64	0	0
	Debt Management: Tracing "Gone Away" Customers	Investing in systems and staff to integrate facilities with HMRC to trace customers who DWP has lost contact with.		0	1	1	0	0	2	0	2	4	2	0	8	0	0
		SUB-TOTAL		36	50	24	22	8	139	58	258	300	279	142	1037	321	199
Universal Credit Business Case—	Universal Credit		TBC
OBR/HMT yet to sign off	SFIS	Single Fraud Investigation	TBC	0	7	20	6	6	44	0	0	0	5	19	24	17
		SUB-TOTAL		0	7	20	6	6	44	0	0	0	5	19	24	17	0
	IRIS	Risk and Intelligence	TBC	0	31	76	38	38	221	0	27	87	122	118	354	111	38
	Accreditation	Staff Accreditation	TBC	0	2	2	2	2	9	0	2	7	9	9	27	8
	EASD	IT Prompt	PDCS	0	1	0	0	0	2	0	0	2	3	3	8	3	1
	PC Prompt	IT Prompt	PDCS	0	0	0	0	0	0	0	0	1	2	2	5	2	1
No. 10 Fraud	Hotline	Fraud Hotline	TBC													0
and Error	Taskforce	Regional Targeting	TBC	0	9	9	9	9	46	0	16	30	30	31	107	28	10
strategy—	LA Data		TBC													0
OBR/HMT	ID Fraud Unit		TBC													0
yet sign off	PDCS Cleanse	Manual Case Cleanse	PDCS		6	10	13	10	49	24	56	101	147	57	384	134	19
	Debt	More Effective Recovery	TBC													0
	Sanctions	Increased Sanctions	TBC	0	4	0	0	0	6	0	0	18	45	70	132	0	0
	Obligations	Clearer Client Obligation	TBC													0
	Comms	Targeted Communications	TBC													0
	Measurement	Refine Measurement	TBC													0
	PMO	Programme Management	TBC													0
		SUB-TOTAL		0	55	98	62	59	333	24	102	244	358	290	1017	287	69
		TOTAL		36	111	141	89	73	516	82	360	544	642	451	2079	625

Feb-11

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Prepared 10 March 2011