More than 200,000 pensioners were left £1.3bn out of pocket last year due to computer errors at the Department for Work and Pensions (DWP), according to a report by parliament's spending watchdog. The Public Accounts Committee (PAC) found that 165,000 also missed out on £1.2bn in the previous year, with many unlikely to be repaid due to poor record keeping.
The report criticised the government for failing to fix basic mistakes, accusing civil servants of being 'asleep at the switch' while managing the state pension system. It highlighted 'eye-watering' levels of fraud and error, adding £8.2bn to the benefits bill in 2022-23, down from £8.6bn the previous year but still far above the £4.4bn in 2019-20.
PAC chair Dame Meg Hillier said the level of fraud and error remained 'unacceptably high' and expressed concern that DWP officials do not expect a return to pre-Covid levels until 2027-28. The majority of fraud and error was driven by Universal Credit, overpaid by 12.8% (£5.5bn) in 2022-23, with 18% of claims containing an element of fraud.
The committee acknowledged the DWP's plan to tackle fraud, including investing £895m in counter-fraud measures and setting an annual savings target. However, it noted that success depends on scaling up recruitment and productivity for reviewing 8 million Universal Credit cases over five years.
A DWP spokesperson said: 'Our priority is ensuring everyone receives the financial support they are entitled to, and state pension underpayment rates due to official error remain low at 0.5% of expenditure. Where errors do occur, we are committed to fixing them as quickly as possible.' They added that the department is cracking down on fraud with new powers to save the taxpayer £600m over five years.
