Tackling fraud and error in benefit expenditure 2024-25

Status / emerging findings

• Overpayment rate fell marginally from 3.6% (2023–24) to 3.3% (2024–25), but £9.5 billion was still lost; underpayments rose to £4.9 billion, up from £4.2 billion year-on-year.
• Targeted Case Review programme exceeded benchmarks (1:7 return vs 3:1 target), delivering £581 million in savings since 2022, but DWP's own 2028–29 forecast suggests only 2.8% overpayment rate across all welfare—lowest since tax credits introduction.
• Living-together fraud remains second-biggest cause at ~1.8% of UC overpayments; Carer's Allowance independent review found flawed DWP guidance on earnings.
• DWP claims £25 billion in fraud/error prevention detected annually via 'experimental statistics' developed with NAO; Committee sceptical of measurement rigour and scale.
• New Public Authorities Act (December 2025) gives DWP powers to compel bank data-sharing; Committee emphasises need for proportionate, fair use and data interoperability across government departments.

Why it matters

£9.5 billion in annual benefit overpayment erodes public trust in welfare fairness and represents a 37-year audit failure; how DWP deploys new powers and data-sharing will set precedent for state surveillance of benefit claimants.

Tone arc

Opened cautiously welcoming marginal improvement; shifted to frustration at slow progress and measurement opacity after December evidence session revealed ambitious forecasts resting on disputed 'experimental statistics'. Chair's May 2026 follow-up letter signals unresolved tension over Treasury's endorsement of DWP claims.

Key witnesses

Sir Peter Schofield KCB (DWP Permanent Secretary), Neil Couling CBE (DWP), Vikki Knight (DWP), Comptroller and Auditor General (National Audit Office), HM Treasury (Director General Public Spending, via correspondence)