Committee publication · Correspondence · 15 April 2026
Correspondence from the Permanent Secretary, related to the Department’s Supplementary Estimate 2025-26
Summary
Sir Peter Schofield, Permanent Secretary at the Department for Work and Pensions, responds to the Work and Pensions Committee's questions on the 2025-26 Supplementary Estimate. He addresses concerns about Connect to Work funding delivery, transparency in estimates documentation, disaggregation of Core Department spending, explanations of benefit spending changes (particularly ESA and UC Health Element), the role of volatility margins in benefit forecasts, and performance measure reporting.
Key findings
- Connect to Work will support 300,000 participants by 2030; 16 Accountable Bodies received additional 2025-26 funding enabling support for 2,300 more participants than originally forecast.
- DWP acknowledges deficiencies in memorandum narrative clarity, particularly regarding demand-led benefit caseload changes; commits to better referencing OBR forecasts and identifying causal factors where possible in future documents.
- UC Health Element increase driven partly by managed migration of non-health-related legacy cases to Universal Credit, with many subsequently reporting restricted ability to work; identified as a one-off expenditure change rather than trend shift.
- Margins totalling £6.3 billion (49% of £12.9 billion Supplementary Estimate increase) are standard practice reviewed by HM Treasury; set benefit-by-benefit based on historic margins, expenditure trends, control total weighting, and policy-specific volatility factors.
- Department commits to: exploring Core Department subhead disaggregation at Main Estimate 2027-28; including additional appendix tables showing margin percentages and year-on-year comparatives; enhancing performance measure detail with links to Annual Report and Accounts.
Tone
ProceduralTopics
Key actors
Sir Peter Schofield, Debbie Abrahams, Angus Gray, Department for Work and Pensions, Work and Pensions Committee, HM Treasury, Office for Budget Responsibility
Notable line
“We acknowledge that this additional detail could have been added to the Memorandum narrative and will ensure that, in future Memoranda, where OBR identify specific factors impacting their forecast, this is incorporated in the Memorandum.”
Key Quotes
“In summer 2025, recognising we would likely have an underspend in the Connect to Work budget, we invited delivery areas to submit requests for further funding to increase the number of participants they could support for the 2025-26 financial year.”
“AME benefits, including the Employment and Support Allowance are demand-led and paid, in line with legislation, when claimants meet qualifying criteria.”
“… significant proportion of 4 these cases subsequently reported a restricted ability to work and joined the UC Health caseload, increasing health-related spending in 2025-26. This is expected to be a one- off change in expenditure rather than being indicative of a change in the trend.”
“… the inclusion of the margin does not in itself cause any additional expenditure. Benefits are only paid in line with legislation and when qualifying criteria are met.”
“I want to assure you that we recognise the importance of being transparent when providing information and in particular when dealing with Parliamentary Select Committees.”
Source · parliament.uk record ↗