Thousands of disabled people failed by government's 'culture of indifference', report finds

MPs condemn DWP’s 'failure’ to act on ‘unacceptable and entirely avoidable’ underpayment error which saw sick and disabled people miss out on thousands of pounds

The government has been accused of presiding over a “culture of indifference” in its handling of a major change in its disability benefits scheme, which has seen vulnerable people miss out on thousands of pounds.

A group of influential MPs said the Department for Work and Pensions (DWP) had failed to act on warnings that it was underpaying an estimated 70,000 people who transferred to employment and support allowance (ESA) from other benefits over seven years.

The Public Accounts Committee (PAC) said the “unacceptable and entirely avoidable” situation stemmed from multiple failures by the department, including not listening to what claimants, experts, support organisations and even its own staff were saying.

Almost four months after an investigation by the National Audit Office (NAO) found that tens of thousands of sick and disabled people had been affected by underpayments, the report states that the government is only paying claimants some of the benefits they missed out on.

The DWP said it would pay £340m back in underpayments, but estimates there may be up to £150m more which cannot be paid back because arrears will only be accounted for as far back as 21 October 2014, the date of a legal tribunal ruling.

It is also yet to finalise arrangements for contacting claimants’ next of kin who have died since the error took place, according to the report.

The average underpayment for each claimant is estimated to be around £5,000, but some people will be owed significantly more, with approximately 20,000 having been underpaid around £11,500 and a small number owed as much as £20,000 – which the Committee said was “appalling”.

The DWP said it aims to pay people their arrears by April 2019, and has set up a dedicated team of 400 staff to do this, at a cost of £14m.

MPs said ministers had shown “sluggishness” in correcting the underpayments and criticised the fact that it was not planning to pay any compensation to reflect the lost value of passported benefits, such as NHS prescriptions, dentistry treatment and free school meals.

Meg Hillier, chair of the Committee, said: “Thousands of people have not received money essential for living costs because of government’s blinkered and wholly inept handling of ESA.

“The department simply didn’t listen to what claimants, experts, support organisations and its own staff were saying. Its sluggishness in correcting underpayments, years after it accepted responsibility for the error, points to weaknesses at the highest levels of management.”

She said the DWP must explain what it was doing to improve both its management culture and its ability to gather and act promptly on critical intelligence, and set out how it would quickly address the £1.7bn of underpayments claimants had missed out on each year.

“Half-hearted Whitehall targets offer no comfort to people struggling to make ends meet because of government mistakes,” Ms Hillier added.

Responding to the report, Ken Butler, welfare rights adviser with Disability Rights UK, said: “This tawdry fiasco has seen incompetence aggravated by heartlessness and arrogance over many years.

"We can only endorse the report’s wording around the DWP’s ‘culture of indifference’. We echo the MPs disbelief that even now the DWP is failing to fully restore the additional losses experienced by thousands of people, such as free dentistry and prescriptions."

A DWP spokesperson said: “We take the issue of underpayments very seriously and have actively taken steps to put this right as quickly as possible, to ensure people get the support they are entitled to. We have recruited 400 extra staff and have already started making payments - over £40 million so far.

“We have continued to provide regular updates to both the PAC and the House in regards to the progress of these repayments, and will continue in this stead.”