Background to the report

The Department for Work & Pensions (DWP) makes welfare payments to more than 23 million people across Great Britain. In 2024-25, it paid £290.8 billion in benefits (including State Pension) and spent £7.3 billion on running costs. Some of DWP’s customers are vulnerable or have complex needs, for example due to poverty, age, health problems or disabilities.

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DWP is required to pay benefits and State Pension to claimants and pensioners on time, in full and in accordance with legislation and the related regulations. Where fraud or error results in the payment of a benefit to an individual who is not entitled to that benefit, or a benefit is paid at a rate that differs from the amount specified in legislation, the overpayment or underpayment does not conform with Parliament’s intention and is irregular.

For the past 37 years, successive Comptroller and Auditor Generals have qualified their audit opinions on the regularity of DWP’s accounts due to the material level of fraud and error in benefit expenditure. Fraud and error in benefit expenditure is one of DWP’s most persistent and pressing risks.

Scope of the report

This report examines whether DWP has an effective approach to tackling overpayments in the welfare system. The evaluative criteria we used to assess value for money included whether DWP:

  • has made the progress it expected in reducing overpayments due to fraud and error, including whether it has achieved its objectives and implemented effectively key initiatives to tackle overpayments
  • is well placed to reduce overpayments due to fraud and error going forwards, including whether it has set out a clear strategy and specified what success will look like

Video summary

Laura Brackwell, the report’s director, summarises our findings.

Conclusions

The proportion of benefit expenditure overpaid remains too high, but the figures for 2024-25 suggest that overpayment levels are now going in the right direction, with a particularly welcome drop in the UC overpayment rate. This provides assurance that DWP has started to make headway – it has successfully deployed a range of counter-fraud interventions in recent years, including making use of data analytics. These are generating savings and helping it to detect and correct overpayments. We encourage DWP to continue to test innovative new approaches that make the most of emerging technologies.

Improving processes and controls to stop overpayments before they occur and before debt builds up is the best way to secure value for money in this area. DWP has set an ambition to reduce overpayment rates to pre-pandemic levels, but will need to go further if the longstanding qualification on the regularity of benefit expenditure is to be removed.

The next few years will be key to its success. The extra funding it has available for fraud and error activity, and lessons from its interventions to date, present DWP with opportunities to increase the scale and impact of its approach. Its new strategy wisely incorporates a greater focus on prevention and an intention to address systemic challenges, including through better use of data and organisation-wide accountability for tackling fraud and error.

DWP must now put its high-level vision into practice and develop an effective approach to implementation, which it can use to guide its actions, track progress and manage risks, including the potential for adverse impacts on claimants.

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Publication details

Press release

View press release (22 Oct 2025)

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