Universal Credit branded ‘error-riddled’ as benefit underpayments hit record level

Ministers have been told to investigate issues with Universal Credit after new estimates showed benefits overpayments and underpayments have reached their highest levels.

Excessive payments of benefits excluding state pensions increased 4.6% to £4.0 billion last year, the National Audit Office said on Thursday.

At the same time the Department of Work and Pensions was estimated to have underpaid claimants by £1.9 billion, an increase of 2.2% in a year.

These are the highest figures since the current method for estimating fraud and error was introduced in 2005/06.

Overpayment of the Conservatives’ flagship benefits reform, Universal Credit, was the highest measured at 8.6%.

And the NAO said that the roll-out of the reform is likely to lead to an increase in overpayments during the next six years.

Frank Field, the MP who chairs the Work and Pension Committee, said: “In the DWP’s fantastical predictions, Universal Credit was supposed to reduce error.

“Instead it is the most error-riddled of all benefits, and it’s only getting worse.

“DWP wasted billions of pounds of public money on error last year alone – running at the highest levels since it started counting – but that doesn’t begin to count the human cost.”

Meg Hillier, chairwoman of the Committee of Public Accounts, said the watchdog had “long been warning that Universal Credit will be challenging to administer because of the many variables in life”.

“The fact that the error rate is so high underlines these concerns.

“The Government needs to recognise the impact in people and reduce the error rate,” the Labour MP added.

“The impact of an error can be devastating for individuals and families in low incomes.”

Gareth Davies, the head of the NAO, said the department must “work to understand the reasons for high fraud and error rates for Universal Credit”.

“The value of fraud and error in benefit spending is a longstanding and costly issue for the department,” he added.

The DWP, however, said that there had been no overall increase in the overall rate of fraud and error when taking into account state pensions, which have typically very low rates.

“We rely on accurate information and updates from claimants to ensure we provide the right benefits, and are continuously improving this system,” a spokeswoman added.

“A minority of people abuse the system and we continue to challenge them using the full range of penalties at our disposal.”

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