| Synopsis: |
The Department for Work and Pensions (the Department) increased recoveries of benefit over payments from GBP 180 million in 2005-06 to GBP 272 million in 2007-08, and preliminary results suggest that the Department has achieved its recovery target of GBP 279 million for 2008-09. However, recoveries are not keeping pace with the rate of increase in identified over payments. In 2007-08, GBP 106 billion of benefit payments were made directly by the Department to customers. In the same period 1.3 million over payments were identified, totaling GBP 558 million, exceeding recoveries made of GBP 272 million. The stock of debt therefore increased by some 7 per cent - from GBP 1.67 billion to GBP 1.8 billion. The National Audit Office (NAO) report also found that the Department recovers about GBP 3 for every GBP 1 spent on debt recovery operations, though recoveries in 2007-08 represent only some 15 per cent of the identified debt outstanding by the end of the year.The Department's ability to accelerate recovery is restricted by a number of factors, including limitations on the amount that can be deducted weekly from customers' benefits payments under Social Security legislation, and difficulties in tracing some customers who are no longer on benefits. The NAO recommends that the Department: pilot increased use of customer contact methods - such as texting - to encourage prompter notification of changes in circumstances that affect benefit entitlement; use risk profiles for customer groups to better target debt collection activities; seek more information, for example proof of earnings, when negotiating repayment plans with 'off benefit' debtors; and, enhance performance indicators to monitor the performance of debt collection operations. |