"Record levels of benefit fraud in first year of pandemic in Britain"

DWP hope for £1.3bn fraud-and-error savings fade with £6bn loss from universal credit overpayments



About a million people claiming universal credit potentially face a “tap on the shoulder” from investigators after official figures revealed record levels of benefit fraud during the first year of the pandemic.

Universal credit accounted for £6bn of the estimated £8.5bn of “overpaid” benefits in 2020-21, the figures show. Fraud levels soared as normal verification checks were suspended in order to process the new benefit claims last spring.

Fraud levels in England, Wales and Scotland reached a historic high, with universal credit fraud up five percentage points to nearly 13%, denting ministerial expectations that the scheme would deliver an annual £1.3bn reduction in benefit fraud by 2025.

The Department for Work and Pensions (DWP) said benefits fraud remained relatively low, and blamed the increase on a tiny minority of claimants. It said 95% of the annual £200bn pensions and benefits bill was going to people genuinely in need.

The department had “flagged” up about one in six claims approved over the past year which it considered suspicious and was now retrospectively checking them.

Some claimants were likely to get a “tap on the shoulder,” according to Neil Couling, the DWP director general of universal credit.

The figures did not include fraud linked to benefit cash advances, introduced to help people survive the minimum five-week wait for a first universal credit payment. Advances fraud, often the result of identity theft, amounted to £150m in 2019-20. The DWP said this form of fraud was now back to pre-Covid levels.

The DWP said it had expected a rise in fraud when it adopted a pay-first-check-later approach so as to quickly process payments for millions of new claimants who signed on in a matter of weeks last spring as the pandemic started and the economy nose-dived.

Couling said the DWP “clearly had work to do” to achieve the £1.3bn-a-year savings in fraud and error by 2025 that ministers had claimed would be one of the key benefits of adopting the universal credit system.