Universal Credit is a major reform of the benefit system which the Department for Work & Pensions expects will lead to significant economic benefits. After early failings, which we and the previous Committee have reported on, the Department is rolling out Universal Credit gradually and it has accepted the need for better contingency planning as we suggested. However, the programme is still at a very early stage, with important systems and policies still in development, and the Department has yet again delayed and extended the roll-out of the programme by a further year. It now expects to complete the programme in 2022.
Fraud and error in the payment of benefits and tax credits remains a significant problem for both HM Revenue & Customs (HMRC) and the Department for Work & Pensions. There has been no real change in the level of fraud and error since we last reported. After rejecting the Committee’s recommendation, we are pleased that the departments have revised their positions on two of our previous recommendations—to take action on underpayments and on reviewing claimants’ experience of the tax credit process. While it is encouraging to see the departments targeting the causes of losses, such as misreported income, they also need clearer plans to reduce fraud and error in other challenging areas such as cohabitation and claimants pretending to live in the UK who live abroad. Recent issues relating to HMRC’s contract with Concentrix to investigate suspected fraud and error by tax credit claimants highlights the need to get these plans right. We remain disappointed by the absence of stretching targets for tackling fraud and error.
3 November 2016