Public Services > Central Government

Budget confirms DWP plan to appoint external data provider

Published 10 March 2017

Contract expected to be awarded for 18 months, with evaluation to follow on whether data matching provides “useful indication” of undeclared partners for future use in Universal Credit system


Chancellor Philip Hammond’s Budget included two measures aimed at clawing back fraud, error and debt losses, including the appointment of an external data provider to better identify fraud and error caused by undeclared partners.

The Budget papers built on announcements first made in the House of Commons on February 9 by Secretary of State Damien Green, who told the House, “We are committed to ensuring an effective and accurate benefit system, as part of creating a welfare system which is fair to those who use it, and fair to the taxpayers who fund it. An important part of this is recovering money owed to the Government through overpayment of benefits.”

Green described fraud and error in the DWP benefits system as “historically low, and at 1.9% is lower than in 2010.” He indicated that claimant error and official error are “at their lowest level ever, and we are protecting taxpayers’ money by recovering a record amount in overpaid benefits.”

For 2015/2016, he said, around £1bn was recovered jointly by the department and local authorities, an increase of £70m since 2014/2015.

Green said that according to the most recent fraud and error national statistics, around £110m is lost annually to DWP as a result of fraud and error relating to undeclared partners. The most up to date information (for the financial year 20113/14) suggests around 1.5% of Income Support (IS) expenditure is overpaid annually as a result of a partners not being declared appropriately.

Green continued, “We will engage with an external data provider to identify benefit claimants thought to be most likely to have an undeclared partner more effectively. We expect that this will provide more and better evidence to enable us to identify high risk cases. The data provider will not have any contact with claimants directly or any decision making authority. All cases will be progressed through the existing DWP fraud and compliance processes.

“We expect to award a contract for around 18 months and will evaluate its effectiveness in order to inform decisions about whether this type of data matching provides a useful indication of undeclared partners for future use in the Universal Credit system.”

Green also announced that DWP will recover a segment of HM Revenue and Customs (HMRC) tax credits debt associated with people whose tax credits claim has ended, a measured confirmed in Hammond’s Budget.

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