The DWP is heading for another billion pound benefits scandal, the Commons Work and Pensions Committee has warned, as the staggering cost of employment and support allowance (ESA) errors becomes clear and new problems with universal credit (UC) begin to surface

Frank Field, chair of the committee, was commenting on figures released by the DWP about the expected bill for errors in assessing entitlement to ESA for claimants who were transferred from incapacity benefit.

The staff costs alone for putting right the mistakes are now expected to be around £40 million. 800 staff are existing members of the DWP workforce transferred from other duties, but another 400 staff have had to be specially recruited to put things right.

When the cost of back payments of ESA is added, the total cost is expected to be close to £1bn.

However, Field has warned that another billion pound scandal may be just around the corner because DWP staff are advising claimants of legacy benefits such as ESA to transfer to UC when they don’t need to. As a result claimants find that they have no transitional protection, their income is slashed and there is no way back onto their previous benefits.

Field commented:

"ESA has taken another disastrous turn. Having made it through the awful, painful, error-ridden assessment process run by the private contractors who can so rarely hit a target, through the miserable and lengthy reconsideration and appeal process that is so costly to taxpayers and claimants alike, tens and perhaps hundreds of thousands of disabled people still lost out on money they were owed. Now DWP has been forced to admit that just the admin of fixing its own catastrophic incompetence is going to add another £40 million to the cost of this serially botched operation. Imagine what that money could have done instead for families across the country who are struggling to feed their children and heat their homes.

“You might think that this shameful, damaging waste would at least focus minds at DWP on making sure this never, ever happened again. But we are already starting to hear about people whose incomes have been slashed because they've been wrongly advised to claim Universal Credit, and there's no way back. If Ministers want to avoid another billion pound scandal, they need to get a grip on this - and fast."

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