Government 'heading for another billion pound scandal on benefits'

By agency reporter
April 17, 2019

New figures published by the Work and Pensions Committee show the "wholly unacceptable" costs of "serially botched" administration of Employment and Support Allowance (ESA) payments to disabled people. The Department for Work and Pensions (DWP) has begun the process of fixing years of underpayments to vulnerable claimants but it has become clear the errors persisted well after the Department claimed to have corrected the underlying problem.

In February 2019, the Committee wrote to the Department for an update on the costs of this protracted error, after The DWP admitted that the number of staff working on the systemic errors had tripled from 400 to 1,200. It was also at that point that the Department was forced to admit that even after new guidance had been issued to staff in 2015 in an attempt to correct the problem, 30,000 extra cases had been identified where it was possible the same error resulting in underpayment had been made. 

In the response, the DWP reveals that of the 1200 staff assigned to fixing the huge administrative error, 400 are new, additional staff recruited specifically for this exercise. It shows that just running the exercise – if it ends next year as forecast – will cost an additional £40 million. The total cost, including making up what is owed to claimants, is expected to be nearly £1 billion.

Frank Field MP, Chair of the Committee, said: "ESA has taken another disastrous turn. Having made it through the awful, painful, error-ridden assessment process run by the private contractors who can so rarely hit a target, through the miserable and lengthy reconsideration and appeal process that is so costly to taxpayers and claimants alike, tens and perhaps hundreds of thousands, of disabled people still lost out on money they were owed. Now DWP has been forced to admit that just the admin of fixing its own catastrophic incompetence is going to add another £40 million to the cost of this serially botched operation. Imagine what that money could have done instead for families across the country who are struggling to feed their children and heat their homes.

“You might think that this shameful, damaging waste would at least focus minds at DWP on making sure this never, ever happened again. But we are already starting to hear about people whose incomes have been slashed because they've been wrongly advised to claim Universal Credit, and there's no way back. If Ministers want to avoid another billion pound scandal, they need to get a grip on this – and fast."

The Permanent Secretary states in his letter that "we have not had to stop or deprioritise other customer activity in order to complete this review". The Committee says he does not, however, address the question of what other work DWP could have done if it had not had to hire 400 new staff, deploy 1200 total and spend £40 million on this exercise.

* Read the letter from the Permanent Secretary here

* Work and Pensions Committee https://www.parliament.uk/business/committees/committees-a-z/commons-select/work-and-pensions-committee/

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