Minimising The Cost Of Administrative Errors In The Benefits System
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Minimising the cost of administrative errors in the benefits system
Author: Great Britain: National Audit Office
language: en
Publisher: The Stationery Office
Release Date: 2010-11-25
In 2009-10 the Department for Work and Pensions overpaid its customers by an estimated £1.1 billion and made underpayments of £500 million. However, the scale of the challenge faced by the Department should not be underestimated. The benefits system is large, encompassing over 27 different benefits and a total caseload of around 20 million people. In addition, the Department has had to respond to the recent recession in which Jobseekers Allowance caseload almost doubled between 2008 and 2009. The recent announcement of the introduction of Universal Credit is an opportunity to simplify many of the regulations, but such changes will take a long time to implement. In the meantime, the onus remains on the Department to keep the costs of mistakes to a minimum. The Department has demonstrated a clear commitment to reducing administrative error, but there is scope for improvement in the quality of information used to assess where the Department should focus its efforts. Although DWP has initiated an exercise to understand fully the causes of error, this will not be complete until the spring of 2011. There is also scope for further work in collecting and analysing the full costs and benefits of the Department's interventions in order to assess cost effectiveness. The Government announced a new strategy in October 2010 with a greater emphasis on preventing errors from arising and this is now an opportunity for lessons to be learned.
Reducing errors in the benefits system
Author: Great Britain: Parliament: House of Commons: Committee of Public Accounts
language: en
Publisher: The Stationery Office
Release Date: 2011-03-10
There are around 30 different types of benefits and pensions, and £148 billion was paid out to 20 million people in 2009-10. The Department for Work and Pensions estimates that £2.2 billion of overpayments and £1.3 billion of underpayments were made in 2009-10 as a result of administrative errors by its staff and mistakes by customers. Efforts to tackle error have had little success and levels of error have remained constant since 2007. A joint HM Revenue and Customs and Department for Work and Pensions fraud and error strategy announced in October 2010, along with additional funding of £425 million over four years, is an opportunity to inject a new impetus. Importantly, the Department has not addressed underpayments, despite the hardship that benefit underpayments can create for people in need. Interventions to reduce error must be targeted where they are most likely to get the greatest return. Progress on reducing error requires a better understanding of where and why errors arise, and a greater focus on preventing errors occurring in the first place. The Department is not making use of all available sources of information to identify the reasons why staff make mistakes, where guidance and training efforts should be directed, and to identify which customers are most likely to make mistakes on their benefit claims. Wider welfare reforms have the potential to reduce errors in the long term by simplifying benefits administration, but waiting for the implementation of the Universal Credit is not an option.
Reducing losses in the benefits system caused by customers' mistakes
Author: Great Britain: National Audit Office
language: en
Publisher: The Stationery Office
Release Date: 2011-01-21
The Department for Work and Pensions does not yet have enough evidence to demonstrate that its activities to reduce the cost of mistakes by customers have been value for money. Mistakes made by claimants in the information they provide to the Department, termed customer error, are difficult to detect, correct and prevent. The scale of overpayments and underpayments demonstrate a clear imperative for improvement. Mistakes made by customers are difficult for the Department to tackle because they often arise from a change in customers' circumstances, which customers may not realise they have to tell the Department about. Overpayments due to customer error, which are estimated at £1.1 billion in 2009-10, represent a substantial loss to the taxpayer. And underpayments, which were approximately £800 million in 2009-10, can cause hardship for the families affected. The establishment by the Department of the Fraud and Error Council shows a commitment to tackling fraud and error, but there is little evidence that sufficient attention has been paid to reducing losses due to customer mistakes. The Department launched a five year strategy for tackling error in January 2007 but there has been no discernible decrease between 2006-07 and 2009-10 in underpayments and overpayments due to customer error as a percentage of total benefits expenditure. The Department and its agencies do not yet have enough information to target initiatives effectively. Nor is there enough consistently measured data on the costs and benefits of interventions.