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Department for Work and Pensions 
Annual Report and Accounts
2014-15
HC 31
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Department for Work and Pensions 
Annual Report and Accounts 2014-15
For the year ended 31 March 2015
Accounts presented to the House of Commons pursuant to section 6 (4) of the Government 
Resources and Accounts Act 2000
Annual Report presented to the House of Commons by Command of Her Majesty
Ordered by the House of Commons to be printed on 16 July 2015
HC 31
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This is part of a series of departmental publications which, along with the Main 
Estimates 2015-16 and the document Public Expenditure: Statistical Analyses  
2015, present the government’s outturn for 2014-15 and planned expenditure  
for 2015-16.
© Crown copyright 2015
This publication is licensed under the terms of the Open Government Licence v3.0 
except where otherwise stated. To view this licence, visit nationalarchives.gov.uk/
doc/open-government-licence/version/3 or write to the Information Policy Team, The 
National Archives, Kew, London TW9 4DU, or email: xxx@xxxxxxxxxxxxxxxx.xxx.xxx.xx.
Where we have identified any third party copyright information you will need to 
obtain permission from the copyright holders concerned.
This publication is available at www.gov.uk/government/publications/dwp-annual-
report-and-accounts-2014-to-2015
Any enquiries regarding this publication should be sent to us at:
Finance Director General’s Office
5th Floor, Caxton House
6-12 Tothill Street
London  SW1H 9NA
Print ISBN 9781474119177
Web ISBN 9781474119184
ID 15051508  06/15
Printed on paper containing 75% recycled fibre content minimum
Printed in the UK by the Williams Lea Group on behalf of the Controller of Her 
Majesty’s Stationery Office
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Contents
Our performance - overview   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .4
  Who we are and what we do  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
  Secretary of State’s foreword  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
  Permanent Secretary’s overview  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Our performance story   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .14
Our performance - analysis     .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .34

Our performance against our business plan  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Our performance against other required reporting   . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Our controls     .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .56
  How we were structured in 2014-15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
  Staff information  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
  Remuneration report   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
  Statement of Accounting Officer’s Responsibilities   . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
  Governance statement   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
  Control issues  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
  Lead non-executive director’s report for 2014-15  . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
  Certificate of the Comptroller and Auditor General   . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
  Report by the Comptroller and Auditor General  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
Our expenditure   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 104
  Statement of Parliamentary Supply   . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
  Financial Statements  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .114
  Notes to the Departmental Accounts  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .120
Trust Statement   .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 166
Annex    .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  . 180
Annex 1: Core tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
The Annual Report adopts the changes required under the Financial Reporting Manual 
for 2015-16. It also complies with the Financial Reporting Manual for 2014-15 and 
includes everything needed in the Strategic Report and the Directors’ Report.
3
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Our performance – overview
Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Who we are and what we do
ormance – o
v
The Department for Work and Pensions is the UK’s biggest public service department. 
erview
We develop policy and deliver essential services on welfare, pensions and child 
maintenance. What we do matters: we change the futures of millions of people in 
the UK:

we help families achieve financial independence by getting people into
sustainable work

we help the life chances of children by encouraging separated parents to work
together to make family-based financial arrangements for their children’s
welfare and security

we help people with disabilities and ill-health live independently

we help pensioners by making sure they have a reasonable income in retirement

we are committed to reducing our running costs and keeping welfare spending
under control. And we do this while continually improving the efficiency and
effectiveness of our services
We provide our services in a number of ways:
Jobcentre Plus helps people move from benefits 
into work and helps employers advertise and fill 
their vacancies. It also deals with benefits including 
Jobseeker’s Allowance and Employment and Support 
Allowance plus carers’ and disability benefits including 
Carer’s Allowance, Attendance Allowance, Disability 
Living Allowance and Personal Independence Payment.
The Pension Service provides pensions, benefits 
and retirement information for current and future 
pensioners in the UK and abroad. These include the 
State Pension, Pension Credit, Winter Fuel Payments 
and Cold Weather Payments.
The Child Maintenance Service calculates and collects child maintenance payments 
from parents who can’t make their own financial arrangements. Child Maintenance 
Options gives information and support to separated parents to help them make 
informed choices about child maintenance.
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We deliver at scale
In 2014-15 we:
Helped
2 .6m people Processed
5m
move off Jobseeker’s Allowance
benefit and pension claims
Carried out over
Answered over
Paid 22m 
24 .5m
people
 
£167 .6bn
47m
in benefits and
calls
pensions
adviser interviews
in contact centres
Average of
Recovered over
job 
searches
4 .5m
£1 .3bn
of debt
conducted 
every day
Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
We improve lives
ormance – o
In 2014-15 we:
verview
Saw a record
Enabled the creation of
31 .1m
65,570
people in employment 
new businesses through the 
– including 22 .7m full-time
New Enterprise Allowance
Boosted the number 
Helped more than
of people saving 
in workplace 
32,400
pensions by
2 .2m
Helped
disabled people find 
and stay in work by 
reducing barriers 
105,000
and legislated for 
through
a simpler, fairer 
families turn their 
 
State Pension
lives around through 
Access to 
the Troubled Families 
Programme
Work
Achieved
Supported a
2.1 percentage 
point incr
 
ease in the 
86%
Gave
employment rate of 
parents paying 
198,000
disabled people
maintenance for their 
children 
up to
young people the 
opportunity to 
46 .3
gain valuable work 
%
experience with an 
employer placement
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Secretary of State’s foreword
Looking back over the last Parliament, I am immensely proud of this department’s 
achievements and I look forward to continuing the work we have started to create a 
fair and affordable welfare system for the future. 
So far we’ve designed and delivered reforms across the whole of the social security 
system: from Child Maintenance reform to the new State Pension; from the 
benefit cap to the claimant commitment; and from Universal Credit to Personal 
Independence Payment. But most importantly we’ve helped many people transform 
their lives and the lives of their families.
Over the last Parliament, welfare spending increased by the lowest rate since the 
beginning of the welfare state. This is testament that our welfare reforms are 
working.
Every day we deliver a vital service to UK citizens: processing and maintaining benefit 
claims and pensions, and helping people to find work. This year we have yet again 
made significant improvements to our service while reducing our running costs even 
further. 
Our success in the labour market is clear. We have seen employment reach a record 
high, the number of workless households is at a record low, and the youth claimant 
count is at the lowest level seen since the 1970s. This means more people now have 
the security of a pay package which work brings. Continuing this success and building 
on it over the next Parliament we will see the UK achieve full employment.
We’ve also developed programmes to ensure those furthest away from the labour 
market receive the support they need to get a job. The Work Programme is using 
payment by results to support those at risk of becoming long-term unemployed, our 
Disability Confident campaign is changing the attitudes of employers to employing 
disabled people, and Work Choice is helping disabled people find and keep a job. All 
these are continuing to make a lasting difference to people’s lives. That is why we 
have committed to halve the disability employment gap over the next Parliament.
Universal Credit is transforming the benefit system. We already know that Universal 
Credit claimants spend twice as long looking for work compared to Jobseeker’s 
Allowance claimants. We are rolling out Universal Credit across the country, and by 
next year it will be in every jobcentre in the country.
During the last Parliament we saw the biggest shake up of the pension system in a 
generation. The new State Pension will provide a clear foundation on which people 
can save for their retirement. Automatic enrolment has proven a great success with 
more people than ever now saving in a workplace pension. We are now supporting 
small and micro businesses to auto-enrol their employees so they too can benefit 
from a workplace pension. 
During this new Parliament we will continue to support the government’s economic 
plan by helping to build a more secure and better future for everyone at every stage 
of their lives. Our goal remains to reward hard work and protect the vulnerable. We 
will continue to establish a labour market where all those who can work do. We 
will continue to increase saving for and security in later life. And we will continue to 
deliver value for money by improving the quality of our services while reducing costs.
Department for Work and Pensions Annual Report and Accounts 2014-15
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Managing and delivering the welfare elements of the Smith Agreement will be 
Our perf
another priority for this Parliament. We have set up a joint ministerial working group 
on welfare for UK and Scottish ministers to discuss new arrangements and we will 
provide expertise on practical and legal interpretation and implementation of the 
ormance – o
Smith Commission recommendations. 
And the Social Justice Cabinet Committee will continue to be key in ensuring a cross-
government approach to our reforms. We need to work together across departments 
verview
and with local government to ensure we support the most vulnerable people to 
achieve their potential.
I have no doubt about the ability of this department to successfully transform our 
welfare system and while doing so, make a positive and lasting difference to the lives 
of millions of people across the UK.
The Right Honourable Iain Duncan Smith MP
 Secretary of State for Work and Pensions
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Permanent Secretary’s overview
The work we do is vital. It touches the lives of millions of UK citizens, helping them 
change their futures through work, support and saving.
In 2014-15 we continued this crucial work while taking huge strides in the 
government’s welfare reform agenda, a set of once-in-a-generation reforms that will 
reward work and focus spending on those who need it most.
As a result we contributed to the largest annual fall in unemployment since records 
began, with two years of consecutive month-on-month reductions in the number 
of people claiming out-of-work benefits. The number of people now in work is at a 
record high, as is the employment rate.
We now have a new government, and the next 12 months will bring new challenges. 
But we can be proud of our achievements over the last year and the last Parliament. 
These achievements give us confidence in our ability to continually improve our 
service to our customers, claimants and taxpayers. 
Finding work and making it pay
Universal Credit is the government’s flagship welfare reform, and is designed to 
reduce poverty and ensure people are better off in work. By the end of 2014-15 we 
had introduced Universal Credit in a third of our jobcentres, and had started to make 
it available to families and couples. 
Our early evaluation shows that Universal Credit claimants move into work faster, do 
more work and earn more money than those on Jobseeker’s Allowance.
The use of the claimant commitment – a central part of Universal Credit – also 
shows how far we’ve progressed. Over a million people have agreed claimant 
commitments, with more signing up daily. These two-way agreements between 
claimants and the state help emphasise personal responsibility and prepare people 
for work by resembling an employment contract. They are a symbol of the bespoke 
service Universal Credit offers, and the way it encourages people to keep active in 
searching for work. 
2014-15 also saw the continuation of many programmes to help young people find 
work or return to education or training. By November 2014 we had arranged work 
experience for over 198,000 young people and work academy places for another 
83,500.
The Work Programme, too, continued to support those who are most at risk of long-
term unemployment by giving them up to two years of tailored help and guidance. 
The results have been getting better with every year. By March 2015 the Work 
Programme had helped over 430,000 people find sustained employment – that’s 
over a quarter of everyone who’d been on the Work Programme long enough to 
benefit from it.
But we don’t just help people find and keep jobs: we help people create them, too. 
New Enterprise Allowance helps people set up their own businesses by providing 
business planning advice and financial support. Since launching the scheme in April 
2011 we have helped 65,570 people start up their own business. More than a third of 
these were in 2014-15.
10 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Having dignity in retirement
We want people to live a secure and dignified retirement based on personal 
ormance – o
circumstances and choice. We promote saving as the best way to achieve this goal. 
We continued to expand automatic enrolment, launched in 2012, to increase the 
number of people saving for their retirement. This has already helped more than 
5.2 million people start saving for retirement by setting a legal duty for employers to 
verview
enrol their eligible workers into a pension scheme. In previous years we helped large 
and medium-sized employers undertake their automatic enrolment duties, and in 
2014-15 we paved the way for small and micro employers. They will join automatic 
enrolment from June 2015.
The government also passed legislation for a simpler and fairer new State Pension, 
affecting those who reach State Pension age from 6 April 2016. It will make sure 
saving always pays, and give people the confidence to plan for their future. 
We have also created greater freedom and flexibility in how people can invest and 
spend their pensions. In April 2015 the government introduced new rules to give 
people more choice, along with an advice service to help them make informed 
decisions. People aged 55 and over who have defined-contribution pension savings 
can now choose to take their pension in several different forms, including a single 
lump sum, multiple lump sums, and annuities. 
Supporting families
We supported the cross-government effort to tackle child poverty by promoting 
work. The proportion of children living in a workless household was 12.7% in October 
to December 2014, 3.5 percentage points lower than in the same period in 2010.
We also continued to reform the child maintenance system to encourage separated 
parents to work together. Our aim was for more people to set up their own family-
based child maintenance arrangement, without automatically turning to the state. 
Parents who agree family-based arrangements can avoid a new fee for the service. 
We also introduced a charge for parents who use our collect-and-pay service. Again, 
parents can avoid this fee if they pay each other using our Direct Pay service. Under 
this arrangement, we set the amount to be paid, but parents organise the mechanics 
of the payment between themselves. Results so far are encouraging: two out of 
three cases now use the Direct Pay service.
Living independently
Personal Independence Payment helps disabled people live independently by 
providing a payment that can contribute to some of the extra costs of a disability or 
health condition. It focuses on how a person’s disability affects their daily life.
We introduced this new benefit nationally in June 2013, and in 2014-15 we looked 
critically at the way we deliver it. By refining the way we work with our health 
assessment providers, we processed more claims and did so faster. We also 
expanded the number of UK areas where we review which Disability Living Allowance 
claimants are eligible for Personal Independence Payment. 
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Service up, costs down
We operate on a huge scale: our work directly affects the lives of 22 million 
claimants. We make millions of payments every day, adding up to £167.6 billion in 
2014-15, so it is crucial that we strive for excellent service both for our customers 
and for the taxpayers who fund them.
2014-15 saw a further step on our journey to drive service up and costs down. We 
now do in days what, only a few years ago, we did in weeks and months; and the 
number of phone calls chasing progress has reduced significantly. We’ve done this 
by having teams that do similar work share what they know, by cutting out the 
unnecessary steps in our processes, and by removing duplication and doing things 
once only.
All of this has also helped us reduce costs. In 2014-15 we spent £7.2 billion on 
running our department. That’s £1.9 billion less than in 2009-10 and a cumulative 
cash saving over the Parliament of £6.3 billion. Overall, by March 2015 we had 
38,500 (33%) fewer whole-time-equivalent staff in the core department than we 
did in March 2010. We also saved around £344 million on procurement by using our 
market expertise to get improved services at lower cost. £43 million of this was in 
the IT category, but we also saved another £24 million by improving the way we 
manage our IT demand across the department. 
We have a clear responsibility to ensure that spending on benefits and pensions 
goes to those who are entitled to it and who need it most. In 2014-15 we achieved 
97% accuracy across all benefits – bringing official error to a record low. Preliminary 
estimates for 2014-15 show that overpayments are down to 1.9% of benefit 
spending, compared to 2.1% a year ago, and for the fourth year running we have 
recovered over £1.3 billion of debt.
Investing in our people
With so much of our work dealing directly with millions of people, our staff remain 
our most important asset. In 2014-15 we continued to invest in learning and 
development, improving our skills and developing our leaders, while embedding civil 
service reforms. We also continued the DWP Story, our internal communications 
programme to get our most senior staff talking to – and inspiring – leaders 
throughout the department.
Our 2014 People Survey results reflect these activities, with staff engagement now 
up 11 percentage points since 2011. Our staff also demonstrated their public service 
commitment beyond our core business through charity fundraising and volunteering. 
Within 48 hours of a request from Public Health England, over 30 of our staff put 
their names forward to support Ebola screening at UK ports.
Our controls
As a large and complex department we operate a multi-faceted control system, 
setting clear budgets and delegations, tracking and monitoring performance, and 
assessing and mitigating risks.
During 2014-15 we continued to benefit from the independent advice of our non-
executive directors, both on the departmental board and on the Departmental Audit 
and Risk Assurance Committee. They advised us on vital issues including Universal 
Credit, the welfare cap and building our digital and technology capability. 
12 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Looking forward
Our story for 2015-16 is one of continuity. We will continue to deliver excellent public 
ormance – o
services that transform lives, while making ourselves more efficient. As well as seeing 
through current welfare reforms, we will introduce legislation to take forward the 
new government’s manifesto commitments and continue to monitor our spending 
on benefits to ensure we do not breach the welfare cap. Managing and delivering 
the welfare elements of the Scotland Bill, for further devolved powers, will also be an 
verview
early priority for this Parliament.
Finally, I would like to thank all the people who work for the department for their 
dedication and commitment in making our department truly extraordinary. 
Robert Devereux
Permanent Secretary
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Our performance story
14 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Our performance story
ormance story
This section sets out our activities and achievements against our six 2014-15 
business plan priorities. These were:

tackling the causes of poverty and making social justice a reality
by ensuring that the most disadvantaged people have the opportunity and
support to transform their lives and the lives of their families

encouraging work and ensuring it pays
by introducing Universal Credit, the claimant commitment and other changes to
make sure work always pays

enabling disabled people to fulfil their potential
by supporting independent living and employment opportunities through
specialist programmes

promoting saving for retirement and ensuring saving pays
by providing a decent income and ensuring that the pension system is
sustainable and fair between generations

recognising the importance of the family in children’s lives
by helping separated and separating couples work together in the best interests
of their children

improving public services and reducing costs
by offering an excellent service while cutting costs and tackling fraud and error
We report data to Parliament for all of these six priorities. You can find further details 
in the ‘our performance analysis’ section. 
Priority 1: Tackling the causes of poverty and 
making social justice a reality
Social justice requires sweeping cultural change, spanning not only families and 
individuals but also public services and the way we fund them. During 2014-15 our 
focus was on supporting families, keeping young people on track, promoting the 
importance of work and supporting the most disadvantaged in our society.  
By working with our partners we identified the individuals and families who faced the 
most difficult personal circumstances. We gave them support and tools to help them 
turn their lives around by tackling the causes of their poverty and disadvantage. 
Transforming troubled families 
We worked with local authorities in England to help troubled families transform their 
Helped
lives. We did this by providing specialist employment advisers to enable at least one 
adult in the family to move into work. By the end of February 2015 the programme 
105,000
had helped turn around the lives of 105,000 families, including 10,508 families that 
have found continuous work. 
families turn their 
lives around through 
the Troubled Families 
Leaving care with confidence 
Programme
We protected those leaving care from the risk of long-term unemployment. We’ve 
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done this by giving them tailored support through the Work Programme to help them 
find work from day one of their benefit claim. We continued to provide an education-
support programme called Second Chance Learning so care leavers can remain on 
benefit up to the end of the year they turn 21 if they return to education. 
Escaping the gang lifestyle 
We continued to support young people aged 14 and over who are involved or at 
risk of involvement in gangs. We provided around 80 coaches in places like police 
stations, probation offices and other community venues. Since February 2012 our 
coaches have supported nearly 3,000 young people in London and the surrounding 
counties and 63% of them are now in work, education or training. From October 
2014 we’ve expanded this service into 10 new priority areas in England. 
From jail to jobs 
We gave prisoners tailored employment and benefit advice before their release. 
Those who claim Jobseeker’s Allowance within 13 weeks of leaving prison are 
enrolled on the Work Programme immediately to minimise the risk of reoffending 
and increase their chances of finding work. We’ve helped around 4,400 prisoners find 
lasting work. Our evaluation of this work, published in December 2014, indicated that 
reoffending is around 20% lower for offenders who find work after release. 
In addition, we’ve used social impact bonds to help 16,600 disadvantaged young 
people get what they want out of their lives. Social impact bonds pay providers by 
the results they achieve, which means providers must cover the costs of delivering 
their services. These services are generally delivered by social enterprise or charities 
on the basis that they will receive a payment from us if they achieve agreed results. 
Priority 2: Encouraging work and ensuring it pays
For those who can work, jobs are the best way out of poverty1. So we’ve continued 
to encourage people to take responsibility for their own future by helping them find 
work, stay in work and progress in work.
The figures: employment
The number of people in 
31 .1m
employment increased  steadily 
during 2014-15. May 2015 figures 
30 .4m
from the Office for National Statistics 
show a record 31.1 million people 
in employment in the quarter 
29 .7m
January 2015 to March 2015. 
That’s 1.9 million more than the 
29 .2m
same quarter in 2012.
2012
2013
2014
2015
In 2014-15, we helped around 2.6 million people move off Jobseeker’s Allowance 
and helped thousands of employers fill their vacancies. Every working day we 
conducted around 96,000 job search interviews and processed around 14,000 
working age benefit claims. 
1. See page 62 and table 5.7db from the latest ‘Households below average income’ publication on www.gov.uk
16 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our work coaches prepare claimants for employment by helping them identify and 
Our perf
overcome the barriers they face. This includes referring claimants to individually 
tailored support to help them get the skills they need to increase their chances of 
finding work. While doing this, we continued to implement huge changes to the 
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welfare system.
We launched Universal Credit in 2013 to merge six means-tested benefits and tax 
credits into a single monthly payment for the whole household. It will help reduce 
poverty and ensure that people are better off in work than on benefits. Universal 
Credit is designed to make sure it will always pay to work extra hours or start a new 
job. 
Universal Credit in 
Universal Credit is underpinned by a far-reaching cultural shift affecting jobcentres, 
local authorities, our partners, employers and claimants alike – changing what it 
means to provide welfare support, claim benefits, grow a workforce, look for work 
1 in 3
and much more. So we’ve been careful to introduce it in a safe and secure way, 
testing and evaluating it as we go along to ensure the processes work effectively. 
jobcentres 
We originally introduced Universal Credit to the North West of England in 2013 for 
single unemployed claimants. In 2014-15, we’ve gradually expanded its coverage 
to areas across England, Scotland and Wales. We’ve also made Universal Credit 
available to families and couples who can now claim Universal Credit in over 
100 jobcentres. As at March 2015 we had brought Universal Credit to over 1 in 3 
jobcentres. By next year it will be available in every jobcentre and local authority 
across Great Britain. 
In February 2015 we published ‘Universal Credit at Work – Spring 2015’ on www.gov.uk. It shows our progress, 
analysis and evaluation of this vital reform. Some of the key points were that Universal Credit claimants 
continue to:

be more likely to find work and spend more time in work than Jobseeker’s Allowance claimants: they are
3 to 4 percentage points more likely to be in work than similar Jobseeker’s Allowance claimants at various
points after making their claim

do more job search activity than Jobseeker’s Allowance claimants

think the benefit system is effective at encouraging people to find work
Difference in proportion in work:
Labour market outcomes in the original 4 “Pathfinder Jobcentre Plus offices” and “comparable 
JSA Jobcentre Plus offices” (for new claims made between July 2013 and April 2014).
50%
Universal Credit
45%
Jobseeker’s Allowance
40%
35%
30%
25%
20%
15%
10%
5%
0% Employed at 30 &  In work at 30 &/or In work at 30 &/or  In work at 30 
120 days
90 days
60 days
30 days
60 & 90 & 
60 &/or 90 &/or 
60 &/or 
&/or 
120 days
120 days
90 days
60 days
Employed after X days
Our targeted marketing campaign, costing around £714,000, tested how Universal Credit communications 
influence job-seeking behaviours. Over half of those approached said that as a result of the campaign 
they intended to try at least one new way to support their search for work, such as exploring new sectors, 
refreshing their CV or volunteering.
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In preparation for the rollout of Universal Credit, we introduced the claimant 
commitment, a new agreement between the claimant and the state for all 
jobseekers. This deliberately looks like a contract of employment and sets out what 
we expect a claimant to do to find work in return for support and their benefit, along 
with the consequences of not doing so. 
Nina, work coach, Southport jobcentre
“The claimant commitment has led to a real change in 
culture because the information has come mainly from the 
claimant so it is personal to them. It puts the onus on them 
to keep active in their work search.”
Over the next year, we will make further progress towards realising the economic 
benefits of Universal Credit. This will include testing the enhanced digital service on a 
greater scale.
Paying benefit where it’s needed most 
To ensure that work pays and to underpin a fair welfare system, the benefit cap 
limits how much a household can receive in state benefits. Between April 2013 and 
February 2015, 58,700 households have been capped. Of these 35,600 are no longer 
subject to the cap and 14,400 have moved into work. Our evaluation, published in 
December 2014, shows that the benefit cap is changing attitudes and behaviour and 
encouraging people into work. Claimants are now making the same sort of financial 
decisions as families in work. Around the country jobcentre work coaches are 
helping claimants to experience the wider benefits employment can bring, including 
improvements to their health and family life. 
Claimant
“It gave me the shock of my life but it’s given me the kick 
I needed. Why should taxpayers pay for my lifestyle? I 
genuinely do want to work.”
The benefit cap has been challenged several times under the Human Rights Act, 
but the Supreme Court has upheld the lawfulness. Challenges to the removal of 
the spare room subsidy policy by way of judicial review have also been successfully 
defended to date. 
Saved around
The number of people affected by the removal of the Spare Room Subsidy is 
decreasing, down 15% from May 2013. We estimate that removing the subsidy is 
£1m a 
saving around £1 million a day on Housing Benefit payments. 
day
Modern ways to find work
in Housing Benefit 
Some people need support to enter or rejoin the labour market. So we provide that 
through removal 
support, from intensive one-to-one coaching to self-service options. Throughout, our 
of the Spare Room 
goal is to help claimants prepare for, find and secure work in today’s labour market. 
Subsidy
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Launched in February 2015, the ‘Daily Jobseeker’ is our new online resource for 
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claimants and their work coaches. Hosted on Tumblr, a popular social media 
  Daily Jobseeker
channel, it provides tips on work-related activities such as searching for jobs, creating 
CVs and going to interviews, along with advice from recruitment experts and 
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employers. 
Work coach, Rotherham jobcentre
“It’s a great tool. Everything to support a jobseeker’s journey 
is there on one page. It’s easy to navigate and the Universal 
Credit pages help build awareness amongst our claimants.”
Universal Jobmatch is the UK’s largest jobs board – a website where employers can 
post vacancies and jobseekers can look for work. Around a tenth of all  
www.gov.uk traffic goes to Universal Jobmatch and an average of 4.5 million job 
searches are conducted each day.
New business, new support
With the New Enterprise Allowance we’ve contributed to the wider government 
priority to help people start their own businesses. Since the scheme’s launch in April 
2011 around 65,570 people have used it to open a new business. Just over 23,000 of 
these were set up in 2014-15. 
The scheme offers claimants a mentor to help them develop a robust business 
Facilitated 
plan. Claimants get their benefits while they’re planning their business and a 
weekly allowance once they leave benefits to begin trading. On 5 January 2015 we 
creation of
extended the programme to a wider range of claimants. 
65,570
Claudia, independent baker
new businesses 
“I run a business called Crumbs, Biscuits and Cakes, creating simple but 
through the 
amazing biscuits and cakes for local shops and cafes.
New Enterprise 
When I started, my local area, Walthamstow, was missing a really good cafe. 
Allowance
So I ran a community cafe with the Salvation Army, and customers kept asking 
when I would open my own. That’s how it all started. 
I found out about New Enterprise Allowance through the jobcentre, which was 
very supportive. I started working with Richard, my mentor, in January 2013, 
and he has been brilliant. 
Without his help I do not think I would be where I am today. I started trading 
in June 2013 and it was a very scary moment because it was something I was 
doing by myself – even with Richard there to support me. 
The most difficult times have been when I have had too many orders and not 
been able to cope. Richard’s advice was simple but important: “Make sure you 
are in control of your business, not your business in control of you.”
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Reducing long-term unemployment 
As the economy recovers, we’ve continued to focus additional help and funding 
on those who are most likely to experience long-term unemployment. The Work 
Programme provides two years of flexible, tailored support for claimants in this 
category. This support comes from third-party providers, and we pay those providers 
based on their results.
By March 2015 our providers had helped 432,610 participants find at least 6 months 
of sustained work (or 3 months for those who were the hardest to help). That’s over 
a quarter of everyone who’s been on the Work Programme long enough to find work. 
It also beats our minimum performance level, which was approximately 410,000. 
April 2014 to March 2015 was the fourth year of the scheme and performance was 
stronger than ever. The Work Programme helped 137,000 people find sustained work 
against an expectation of 101,000, 35% better than we expected. 
In autumn 2014 we agreed changes to all the direct contracts we have with each 
of our providers. These have strengthened the performance regime and improved 
financial controls, securing better value for taxpayers and claimants. We also 
included a 12-month extension of all contracts, meaning referrals to the Work 
Programme will now continue until March 2017.
Intensive jobseeking support for those who need it most
For some claimants, the Work Programme alone may not be sufficient. Help to 
Work, launched in April 2014, provides intensive support for those who return from 
the Work Programme without having found employment. Work coaches talk to 
claimants to understand what’s stopping them finding work and use a range of 
methods to help them overcome those barriers. Support includes community work 
placements, daily work search reviews and mandatory activities. 
A secure future for young people
Securing the futures of our young people is important to give them a sense of 
purpose and the opportunity to contribute to the society they live in. We ran the 
Youth Contract between April 2012 and March 2015 to offer flexible support for 
young people. It included extra jobcentre adviser support, work experience, places 
on sector-based work academies, apprenticeships and training places, and careers 
advice from the National Careers Service. We are now developing a new youth offer, 
including a new youth allowance, with clearer requirements from the start of a 
young person’s claim. 
Between April 2012 and November 2014, we arranged work experience opportunities 
for 198,080 young people. Each placement lets someone spend 2 to 8 weeks 
gaining valuable skills and experience with an employer. We also found sector-based 
work academy places for 83,530 young people. These offer a combination of pre-
employment training, work experience and a guaranteed job interview. 
20 Department for Work and Pensions Annual Report and Accounts 2014-15
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Local as well as national 
As well as running our national programmes, our staff worked with local 
organisations to set up local services and events for all their claimants.
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Youth employment in Ipswich
In Ipswich we’ve helped set up the first ever youth employment centre. 
A pioneering approach to helping young people into work, led by local 
organisations and Jobcentre Plus, its ambition is to halve youth unemployment 
in the greater Ipswich area over the next two years. The ‘MyGo’ centre creates 
an inspiring, modern and supportive environment, bringing together all the 
services young people need.
An easier return to work after illness 
Launched in December 2014, Fit for Work provides free, expert and impartial work-
related health advice to help people who have been ill return to work. The service 
will be expanded across England and Wales over the coming months, with GPs being 
able to make referrals nationwide by the autumn and across Scotland during the 
spring. 
Priority 3: Enabling disabled people to fulfil their 
potential
We pay and maintain Disability Living Allowance claims for over 1.9 million disabled 
adults and 385,000 disabled children, handling over 7,100 telephone calls from 
disabled people. We also manage Personal Independence Payment, which was 
introduced in April 2013 to replace Disability Living Allowance for disabled people of 
working age. 
The figures: disabled people in work
3.2 million disabled people were in work in the quarter January to March 2015. 
This is 0.2 million more than in the same period a year earlier. The employment 
rate of disabled people was 46.3% for the same quarter – up 2.1 percentage 
points from the same period a year earlier.
Number of disabled people in work in millions
3 .2
3 .1
3 .0
2 .9
Jul-Sep 
Jan-Mar 
Jul-Sep 
Jan-Mar 
2013
2014
2014
2015
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Specialist employment programmes
Our Work Programme provides tailored support for some disabled claimants, we’ve 
created 2 more specialist programmes for those who face more complex barriers  
to work.
Work Choice
Work Choice helps disabled people find, keep and get on in jobs. Its support is 
tailored to suit individual needs. This year, Work Choice helped 11,730 claimants 
find a job – up from 10,870 people a year earlier.
11,730
10,870
8,060
2013
2014
2015
Access to Work
Access to Work provides practical and financial support to people whose health 
or disability affects their ability to do their job. Between April and December 
2014, Access to Work supported 32,400 people – up from 31,230 people for the 
same period a year earlier.
32,400
31,230
27,610
2012
2013
2014
As well as these programmes, we support wider initiatives that assist disabled 
people and complement our work. For example, we’ve joined the Dementia Action 
Alliance to improve the service we provide by raising awareness among our people 
– over 2,000 of our staff have become Dementia Friends – volunteers trained by
the Alzheimer’s Society to support people with dementia and make society more
inclusive.
Support for independent living
Personal Independence Payment (PIP) is replacing Disability Living Allowance 
(DLA) for claimants aged between 16 and 64. It focuses on how a person’s disability 
affects their daily life and provides financial support to help them live independently.
The first independent review of the PIP assessment, carried out by Paul Gray, 
was published in December 2014. We published our initial response to the review 
and accepted all of its short-term recommendations, many of which we had 
already started to implement. We will publish our full response to the longer-term 
recommendations later this year. 
In our mid-year report for 2014-15, we said we were working with our healthcare 
providers (Atos and Capita) to speed up our service. As a result we are now 
processing claims by terminally ill people within 7 days. Between January 2014 and 
January 2015, the number of PIP claims we processed increased from around 14,000 
22 Department for Work and Pensions Annual Report and Accounts 2014-15
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a month to 80,000 a month. We’ve also reduced the average time a claimant waits 
Our perf
for a PIP assessment by over three quarters: it’s down from 30 weeks in June 2014 to 
7 weeks for a new claim and 4 weeks for a reassessment claim in March 2015.
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We’ve also continued to roll out the DLA-to-PIP reassessment process safely 
and securely in areas where we have sufficient staff to handle an increase in PIP 
assessments.
The Independent Living Fund provides money to help severely disabled people live 
independent lives. It’s been closed for new applications since 2010 but continued to 
support existing users until June 2015. Trustees of the fund have ensured a smooth 
transfer, with local authorities now responsible for, and funding, this group of people 
with high support needs. 
The Disabled People’s Employment Corporation (GB) Ltd (formerly known as 
Remploy Ltd), was a provider of services to help disabled people find sustainable 
employment. The company has been undergoing a restructure over recent 
years following the Sayce Review. In April 2015, Remploy Ltd sold its remaining 
Employment Services business and changed its name to the Disabled People’s 
Employment Corporation (GB) Ltd. The focus for the company now is to deal with 
legacy issues relating to Remploy such as employment and other commercial 
matters efficiently and effectively. The Employment Services business is now a 
private company run by Maximus in partnership with its employees.
Changing attitudes
Helping disabled people fulfil their potential is also about changing attitudes. We’re 
striving to make our communities, workplaces and society fully inclusive for disabled 
people. In September 2014, we launched the Accessible Britain Challenge, which 
calls on local communities to improve mobility, create safer neighbourhoods and set 
up inclusive social activities.
But accessibility isn’t just about the physical environment – it starts with how 
society and employers regard disabled people. Through our award-winning, low-
cost Disability Confident campaign we continued to work with employers to build 
confidence in employing disabled people. 
At an event in January, we brought together major companies to encourage other 
employers to pledge “to do one thing” this year to promote disability employment. 
We now have over 360 campaign supporters and more than 60 partners. We also 
created a toolkit to help MPs hold Disability Confident events in their constituencies 
by bringing together employers, disabled workers and jobseekers.
Priority 4: Promoting saving for retirement and 
ensuring saving pays
We pay and maintain claims for over 15 million pensioners. We handle over 44,000 
telephone calls, process around 29,000 changes to pension claims and process 
around 5,300 claims a day. Each year we issue around 544,000 State Pension 
statements and trace over 125,000 pensions. Last year we also managed over 
940,000 death notifications from the ‘Tell us once’ service. 
Dignity in retirement
We want people to live a secure and dignified retirement based on personal 
circumstances and choice. But with life expectancy rates increasing, the number of 
people working in the UK for every pensioner is decreasing. 
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The figures: number of people working for every pensioner
People of working age
Pensioners
1901
2010
2050
Our society is getting older. In 1901 there were 10 people working in the UK for 
every pensioner. By 2050, it is expected that this will change to just 2 workers.
In response to this we promote sound financial planning and personal responsibility 
for retirement income. We encourage people to invest time and thought in the 
next phase of their career, making clear what effect leaving work will have on their 
retirement income. We also want to maintain control of State Pension spending as 
people live longer and healthier lives. 
In the last 12 months, we’ve made significant progress in simplifying both state and 
private pensions. 
Introducing the new State Pension
The new State Pension will radically change the current system, provide clarity 
about what people can expect, and offer a solid foundation for planning and saving. 
We’re introducing the new State Pension for everyone reaching State Pension 
age from 6 April 2016. The full rate of the new State Pension (currently £151.25 
for illustrative purposes) will be above the means-tested Pension Credit standard 
minimum guarantee (currently £151.20) to ensure saving pays. 
In November 2014 we launched PensionTube – one of the first government-
run YouTube channels. It features interviews, animations, real-life stories and 
independent experts, all to help people to understand the changing world of 
pensions. 
We also launched a major new campaign, ‘Your Pension, Your Future’, to broaden 
understanding of the new State Pension. At a cost of £1.2 million, the campaign 
increased public awareness and improved our staff’s ability to explain the changes 
more clearly. The campaign follows the recent introduction of a new State Pension 
statement service that gives people details of their new State Pension and how they 
may be able to increase it before they retire. By early March 2015 we had issued 
around 109,000 new State Pension statements.
Promoting private pensions 
We continued to promote the value of private pension saving to build on the 
amount people will receive from the new State Pension. 
We launched automatic enrolment in October 2012, with the aim of increasing the 
number of people saving for their retirement. Automatic enrolment makes it easy for 
24 Department for Work and Pensions Annual Report and Accounts 2014-15
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workers to begin pension saving, as employers now have a legal duty to enrol their 
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eligible workers in a workplace pension scheme. Eligibility covers everyone aged at 
least 22 and under State Pension age who earns over £10,000 a year (in 2014-15 
terms), as long as they work or usually work in the UK. 
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Since October 2012 over 5.2 million people have been automatically enrolled. Opting 
out of the pension requires an active decision by the worker, and only about 1 in 10 
people did this – fewer than we expected. These figures have been helped by our 
award-winning automatic enrolment national advertising campaign. This cost £8.2 
million and has been successful in conveying the benefits of saving in to a workplace 
pension.
All large employers (250+ workers) and all medium employers (50 to 249 workers) 
have now started to automatically enrol their staff. Small and micro employers 
(fewer than 50 workers) will start to enrol theirs from June 2015. We know these 
smaller employers will face different challenges to larger employers so we’re working 
with the Pensions Regulator and the pension industry to identify the most effective 
ways to help them meet their duties. 
Automatic enrolment
Marion
“I’ve always looked to the future. I feel that once I get to 
retirement age I don’t want to be a burden on my daughter 
so it’s up to me to make sure I’ve got something in my 
pension pot.
What gives me peace of mind about having a workplace 
pension is the fact that not only do we put in money, our 
employer is also putting in money, so you have a larger 
pension pot at the end of it.
I have peace of mind knowing my employer pays in to my 
workplace pension, too. It’s always good to have free money 
– that’s how I see it.
I’m really happy to be part of a pension scheme.”
Safer and more versatile savings
With millions more people saving through automatic enrolment, it is more important 
than ever to ensure that as much of people’s pension savings as possible is turned 
into retirement income. We’ve legislated to protect automatic enrolment savers from 
excessive and unfair charges. We’ve also introduced governance standards to make 
sure those who run workplace pension schemes understand the system and have 
members’ best interests as a priority.
In 2014-15 the government prepared the ground for far-reaching and radical 
reforms to the tax and pension systems. These give people greater freedom and 
choice in how they invest and spend their hard-earned pensions. We worked with 
HM Treasury, HM Revenue and Customs, the Pensions Regulator and a wide range of 
pension industry stakeholders to prepare for the launch of the new freedoms and the 
advice service in April 2015. 
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From April 2015, people aged 55 and over who have defined-contribution pension 
savings can choose to take their entire pot as a cash lump sum, take a number of 
lump sums out, purchase a ‘flexi’ access drawdown product or purchase an annuity. 
Work choices in later life
We want people to be able to decide when they want to retire based on personal 
circumstances and choice. The removal of the default retirement age means people 
can now decide when they want to stop working. 
There are around 3.7 million people aged 50 to 64 out of work, and we want to 
ensure that there are opportunities for people in this age-group to continue working. 
In March 2015 we launched an employer’s toolkit that offers guidance for managers 
of older workers. To help us develop future support packages, we carried out 
research into the attitudes of the over 50s towards working into retirement. We also 
introduced regional champions into our jobcentres who work with our work coaches 
and employers to raise the profile and benefits of employing older claimants. 
In June 2014 we published ‘Fuller Working Lives – A Framework for Action’. This 
sets out what we’re doing to make sure that those who want to work have the 
opportunity to do so. This includes extending the right to request flexible working to 
all employees to help people phase in their retirement and to help employers better 
manage the transition.
Priority 5: Recognising the importance of the 
family in children’s lives
Families are the foundations of society. Strong and stable families can have a big 
impact on improving the life chances of our children. Every child deserves to be 
brought up in a healthy family environment free from poverty, regardless of whether 
their parents are together or apart.
We supported the cross-government effort to tackle child poverty by promoting 
work. To further support families and the relationships they’re built on, we introduced 
Family Test in October 2014. This test ensures that all government departments 
fully understand how their policies support strong family relationships. 
Children living  2010
in workless 
2014
16 .2
households:
%
 
12 .7
12 .7%
%
down from 16 .2% in 2010
Supporting family relationships
Over the last four years, we’ve invested £30 million in a relationship support 
policy to offer marriage preparation services, couple counselling and relationship 
education. This includes supporting couples at key points in their relationships, like 
having a baby.
We also extended our Help and Support for Separated Families Innovation Fund. 
This helps parents work together in the best interests of their children.
26 Department for Work and Pensions Annual Report and Accounts 2014-15
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Reforming child maintenance
We continued to reform the child maintenance system to encourage separated 
parents to work together. The aim is for them to agree family-based child 
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maintenance arrangements without automatically turning to the new statutory 
child maintenance scheme, known as the 2012 Scheme. The new scheme opened in 
November 2013, and in July 2014 the Public Accounts Committee commended the 
way we had delivered it. 
The first step is for a parent to talk to a Child Maintenance Options’ agent before 
they can access the new scheme. This encourages collaboration from the outset by 
helping parents explore whether they can make a family-based arrangement. If a 
family-based arrangement isn’t possible or appropriate then they can apply to the 
2012 Scheme. 
We introduced application fees (with some exceptions) from 30 June 2014 to 
encourage parents to consider all their options before applying to the 2012 Scheme. 
In August 2014 we also introduced charges for parents who use our collect and pay 
service. Parents can avoid these charges if they pay each other through our Direct 
Pay service (where parents organise payment between themselves). The results are 
encouraging. Two out of three 2012 Scheme cases now use our direct pay service, 
which is a promising sign of parents working together. 
The figures: child maintenance
2012 Scheme experimental statistics at February 2015 show:
• a total caseload of 109,200
•  86% of parents are contributing towards their current
liability
•  67% of cases that were due to pay their liability chose
direct pay – up from 58% in August 2014
In January 2015 we began closing existing Child Support Agency cases, a process 
we expect to take around 3 years. Parents will be able to set up a family-based 
agreement or apply to the 2012 scheme. 
Priority 6: Improving public services and reducing 
costs
We’re committed to controlling the cost of welfare and reducing fraud and error, 
while improving our services and delivering them at lower cost. 
By helping more people into work we’re generating economic growth for the UK and 
reducing demand on the welfare state. In addition, more efficient regulation has 
helped us save businesses around £800 million over the last Parliament. 
26
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The Office for Budget Responsibility carried out its first assessment of the welfare cap 
at the Autumn Statement 2014. It said that the government is on track to meet its 
welfare cap commitment from 2015-16.
In 2014-15, we spent £167.6 billion on benefit payments (including Discretionary 
Housing Payments and other small benefits paid for from our running costs budget). 
This is a real terms increase of around £1 billion from the previous year, but slightly 
less than forecast in the 2014 budget. For further information see chart on page 33.
Spending on benefits for working-age people and children, having peaked at 
£56 billion in 2012-13, has declined in real terms to £54 billion in 2014-15. This was 
driven partly by the fall in unemployment, but also by:
•  reforms to Housing Benefit
•  capping yearly increases on working-age benefits to no more than 1% in 2014-
15 and 2015-16
•  extending the number of waiting days from 3 to 7 for new Jobseeker’s Allowance 
and Employment and Support Allowance claims
•  no longer allowing repeat claims to Employment and Support Allowance after 6 
months when there has been no change to a person’s health condition
•  further restricting access to benefits by new European migrant jobseekers 
Spending on pensioner and related benefits has continued to rise as a result of policy 
choices, such as the triple lock uprating on State Pension. 
Fraud, error and debt
We’ve continued our efforts to reduce fraud and error and maximise debt recovery. 
The preliminary estimates for 2014-15 show that fraud and error was 1.9% of total 
benefit spending. This compares with 2.1% a year earlier and is the first time fraud 
and error has been below 2% since 2005-06, when the current way of measuring it 
was introduced. Further detail on this year’s figures can be found at note 27 to the 
departmental accounts.
Cross-government savings
In 2014-15, we continued to work with HM Revenue and 
Customs and Cabinet Office to reduce losses. New approaches 
included:
•     improving accuracy by using Real-Time Information data 
on earnings and pensions when assessing benefit claims. 
We’ve matched more than 8 million records and have 
identified 350,000 cases for investigation
•     improving the detection of fraud and error by sharing data 
across government departments and other agencies
•     simplifying the benefit and tax credit systems to minimise 
areas of fraud and error
We continued to punish those who commit fraud. In 2014-15, we imposed 3,213 
administrative penalties and prosecuted 7,646 fraudsters. Our 7-week fraud, error 
and debt communications campaign, which cost £780,000, targeted 47 locations 
28 Department for Work and Pensions Annual Report and Accounts 2014-15
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in Great Britain and indicated a shift in attitudes and behaviour towards fraud, error 
Our perf
 
and debt.
Recovered over
Our debt management service specialises in managing and recovering debt. In 
ormance story
£1 .3bn
2014-15, we recovered over £1.3 billion of debt including overpaid benefit, Social 
Fund loans and compensation recovery. This is the fourth year in a row that we have 
recovered over £1.3 billion. 
of debt - 
for the 4th year 
Our debt stock moved from £3.5 billion as at March 2014 to £3.4 billion as at March 
in a row
2015. This is a reduction of 2.9%. 
Reducing our running costs 
Our 2014-15 departmental expenditure limit baseline1 spend was £5.0 billion, 
which is £2.4 billion lower than in 2009-10. This reflects reductions in both our staff 
numbers and our non-staff costs. This second category includes re-contracting and 
centralising procurement, localising some services and rationalising estates.
Reduced running 
We have improved our services whilst reducing the costs of running our department. 
costs by
Since 2010 we have reduced our core staffing by around 38,500 whole-time 
equivalents and our operating costs by £1.9 billion, which is a cumulative cash saving 
of £6.3 billion over the last Parliament.
Improving our services
£1 .9bn
Our focus on improving effectiveness and cutting costs over the last 3 years has 
helped us achieve significant improvements across our business priorities (based 
on internal management information used by operational managers). We’ve 
reorganised and streamlined our back office and customer-facing services to cut out 
overlap and focus on doing things only once. We have:
since 2009-10
•  improved customer service by having our contact centres work more closely 
with our processing centres – either basing them in the same building or pairing 
up separate offices. This has reduced the number of people we need to refer to 
another part of the department by 34% in the last 3 years
•  taken a more consistent approach to different sites doing similar work, improving 
productivity, efficiency and service levels
•  processed benefit claims more quickly, with a resulting 35% reduction in call 
levels and a 53% drop in complaints over the last 3 years
1. This uses current spending levels as the baseline for establishing future funding requirements.
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Fast work: 2014-15 benefit processing times 
compared to 2009-10
We increased the number of Jobseeker’s Allowance claims 
processed in 16 days from 85.8% in 2009-10 to 96.0% in 
2014-15. We’re now aiming to clear Jobseeker’s Allowance 
claims within 10 days. In 2009-10 we processed 67.6% in 10 
days and this increased to 88.6% in 2014-15.
We also increased the number of Employment and Support 
Allowance claims processed in 16 days from 72.9% in 2009-
10 to 93.6% in 2014-15.  We now have a 10 day target for 
Employment and Support Allowance too. In 2009-10 we 
processed 54.9% in 10 days and this increased to 87.5% in 
2014-15.
This year, we achieved a customer and claimant satisfaction score of 82%, up one 
percentage point from last year, and a 20% reduction in the number of complaints 
from last year. 
Reduced customer 
Achieved
complaints by
 
 

82%
20% customer 
satisfaction with
our service
Better services also come from our continuing digital agenda. Here we’ve increased 
our expertise and launched our first live accredited service for Carer’s Allowance. We 
began testing our Universal Credit enhanced digital system in November 2014. We 
completed the rollout of our electronic signature capture service to every jobcentre, 
making it simpler to confirm benefit entitlement and process payments. We also 
launched our child maintenance client and employer online self-service portals. 
Clients and employers can now view progress, make payments, report changes and 
view communications, all at a time convenient to them.
We also focused on making sure we have enough skilled people in the right place at 
the right time. Activities included:

training people to increase flexibility in key areas, such as Personal Independence
Payment, to help manage workload peaks

reviewing working patterns to match them with the wider business needs
30 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Improving employee engagement and building capability
Our success is built on our people. It’s vital to have an engaged and motivated 
workforce during a time of financial constraints and significant change. For us, this 
ormance story
engagement starts with our leaders at every level of the organisation and in every 
building. We continue to develop leaders who:

have a clear vision and value the contribution their people make

empower rather than control their staff

demonstrate our values in everything they do, earning trust and showing
integrity

let their people voice their views and concerns
The DWP Story, now in its fourth year, continues to inspire leaders across the 
organisation. We hold regular internal communications events, led by our most 
senior staff, to get people sharing ideas and making connections, creating a sense of 
unity and excitement about DWP’s future.
Senior leaders also hold regular ‘Question time’ and ‘Let’s talk’ events on specific 
topics. These give staff the opportunity to hear the key messages and ask questions. 
Our success so far is reflected in our staff engagement score for 2014, which 
increased to 55%. That’s up 11 percentage points from 2011 and the second highest 
across the 5 largest government departments. The underlying scores show that 
more people are proud, inspired and motivated by the department – all up by around 
17% since 2010. The departmental board has acknowledged that this is a significant 
achievement – and it underpins the increase in service and cost reduction reported 
above. 
Our staff engagement score
Increased 
our staff 
2014
engagement 
2011
score:
55%
54%
55%
48%
44%
44%
up 11 percentage points 
2011
2012
2013
2014
since 2011
30
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Improving our skills, knowledge and experience is an essential part of preparing 
for the future. We expect everyone to do more, now and in the future. In 2014-15 
we maintained a strong focus on all the civil service priority areas. Early internal 
management information indicates improvement from our position in 2013 in our 
five key areas: digital, commercial, leadership and managing change, project and 
programme delivery and customer service. 
Civil Service 
Our key achievements 
priority area
in 2014-15 include:
Digital
creating a ‘Digital Academy’ that provides cutting edge 
digital training
Commercial
creating a new management model to strengthen our 
skills
Leadership and 
setting a leadership objective for all our people and 
managing change
running DWP Story events for over 4,000 of our people
Project and programme  running project delivery master classes for around 40% 
delivery
of our project people and having our senior responsible 
owners participate in cross-government learning
Customer service 
introducing a standards framework for our operational 
delivery profession
 
 
32 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Our spending on State Pension 
ormance story
and benefits
Pension Credit £6.6bn
TV licences for the 
over 75s £0.6bn
Financial Assistance
Scheme £0.7bn
State Pension
£86 .6bn
Pensioner Benefits
£94 .5bn
Disability Living 
Allowance 
£13.8bn
Attendance
Allowance 
£5.4bn
Social Fund £2 .1bn
Disability and  £23 .1bn
Carer’s 
Expenditure incurred 
Carer’s Benefits
Allowance 
by the  Social Fund
£2.3bn
Personal 
Independence
Payment £1.6bn
Other £0 .1bn
Including 
State Pension 
Total
non-contributory 
and Christmas 
£167 .6bn
Housing
Benefit 
Housing 
£17.9bn
bonus payments
Benefits
£23 .7bn
Rent Rebates
£5.8bn
Employment and Support 
Allowance £12.8bn
Universal Credit £0.1bn
Jobseeker’s Allowance 
Maternity Allowance £0.4bn
£3.1bn
Working
Age Benefits
Bereavement Benefits £0.6bn
Income Support 
£24 .1bn
£2.9bn
Severe Disablement Allowance £0.7bn
Statutory Sick Pay and 
Statutory Maternity Pay £2.4bn
Industrial Injuries Benefit Scheme £0.9bn
Incapacity Benefit £0.2bn
All figures are rounded to the nearest £100,000
For further details please see Statement of Parliamentary Supply 
32
on page 105
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Our performance – analysis
34 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our P
Our performance against 
erf
ormance - analy
our business plan
This section sets out the progress we’ve made against our business plan and other 
key areas where we are required to report to Parliament. 
sis
Overall our results are strong: we’ve completed all 53 of our business plan actions 
this Parliament. Our indicators, too, generally show good progress. You can find more 
details on our transparency page on www.gov.uk 
We publish data on the government performance platform along with budgetary, 
internal operational and transactional data in the Quarterly Data Summary via the 
  www .gov .uk
Government Interrogating Spending Tool which can be found on www.gov.uk
Our performance is also scrutinised by the National Audit Office, the Public Accounts 
Committee and the Work and Pensions Select Committee. In 2014-15, they 
examined Universal Credit, the Work Programme, Housing Benefit fraud and error 
and Child Maintenance reforms.  Their findings and feedback have helped us to 
improve the services we offer and the way we work.
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Priority 1: Tackling the causes of poverty and 
making social justice a reality
Business plan actions 
Actions due in 
due in 2014-15
Completed 
Missed 
future years
2
2
0
4
Achievements in 2014-15:

publishing the ‘Social Justice: Transforming Lives’ progress report

publishing the evaluation of the national ‘Day One’ initiative to mandate prison
leavers to the Work Programme
Business plan impact indicator
Percentage of the lowest earning 25-to-30-year-olds who’ve risen up the 
earnings distribution 10 years later
This indicator measures the proportion of individuals who are in the bottom fifth of 
earners when they’re aged 25 to 30 who are 20 or more percentiles higher in the 
earnings distribution 10 years later. 
The latest data shows that 12.5% of 25-to-30-year-olds in the bottom fifth of 
earners in 2005 were 20 or more percentiles higher in 2014. 
The figures have a confidence interval of ±1.0 percentage points. There has been no 
statistically significant change since the first measurement period (2000 to 2009).
12 .5%
12 .4%
12 .5%
12 .1%
12 .1%
11 .7%
2000-2009
2001-2010
2002-2011
2003-2012
2004-2013
2005-2014
Source: Annual Survey of Hours and Earnings.
36 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Priority 2: Encouraging work and ensuring it pays
Business plan actions 
Actions due in 
ormance – analy
due in 2014-15
Completed 
Missed 
future years
14
14
0
4
Achievements in 2014-15:
sis

getting more claimants into work through the Work Programme, New Enterprise
Allowance and Youth Contract

introducing new services such as Help to Work (intensive support for those
returning from the Work Programme) and Fit for Work (an occupational health
advice service to reduce working days lost to sickness)

launching pilots to test how to help people into work and how to help them
progress if they’re already in work

publishing evaluations and reviews on current services (including: the
pilot to support young people from the first day of their claim, the pilot to
mandate prison leavers to the Work Programme on the first day of their
claim, independent evaluations of the Work Programme, a review of disability
employment, the Fulfilling Potential progress report, the social justice progress
report and, a review of the benefit cap)

achieving 23,130 New Enterprise Allowance business start-ups in 2014
Business plan impact indicators
Percentage of people moving from key out-of-work benefits 
(Jobseeker’s Allowance)
This indicator measures the percentage of people moving off Jobseeker’s Allowance 
(JSA), whether to another benefit or leaving the benefit system entirely. It reports 
the proportion of claimants who have left JSA by 52 weeks after they joined. 
The latest data shows that 93.6% of those who started to receive JSA between 
October and December 2013 had stopped receiving it 52 weeks later. 
There is a reporting lag of up to 14 months due to the elapsed time inherent in the 
indicator and the time needed to process the data. Data isn’t seasonally adjusted.
93 .6%
91 .6%
90 .9%
89 .4%
88 .6%
2010-11
2011-12
2012-13
2013-14
2014-15
Source: DWP Jobseeker’s Allowance payment system.
36
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Percentage of people moving from key out-of-work benefits (Employment and 
Support Allowance)
This indicator measures the percentage of people moving off Employment and 
Support Allowance (ESA), whether to another benefit or leaving the benefit system 
entirely. It reports the proportion of claimants who have left ESA by 65 weeks after 
they joined. 
The latest data shows that 51.2% of those who started to receive ESA between 
July and September 2013 had stopped receiving it 65 weeks later (October to 
December 2014). 
There is a reporting lag of up to 17 months due to the elapsed time inherent in the 
indicator and the time needed to process the data. Data isn’t seasonally adjusted.
73 .8%
57 .6%
53 .0%
49 .5%
51 .2%
2010-11
2011-12
2012-13
2013-14
2014-15
 
Source: DWP ESA payment system.
Number of people on key out of work benefits
This indicator measures the number of people aged from 16 to State Pension age 
who claim Jobseeker’s Allowance, Employment and Support Allowance, Incapacity 
Benefit, Severe Disablement Allowance, Income Support (as a lone parent or in the 
“other” category) or Pension Credit. It includes people claiming in Great Britain and 
some living overseas. Figures don’t currently include Universal Credit. 
A total of 3.9 million people aged from 16 to State Pension age claimed a key out-of-
work benefit in November 2014. This is around 351,000 less than the 4.25 million in 
November 2013. 
Data isn’t seasonally adjusted, so only year-on-year comparisons can be made.
5 .02m
4 .78m
4 .83m
4 .64m
4 .25m
3 .90m
November 
November 
November 
November 
November 
November 
2009
2010
2011
2012
2013
2014
Source: Jobseeker’s Allowance data is drawn from the claimant count published by the Office for National Statistics. All 
other figures are from the Work and Pensions Longitudinal Study published by DWP. 
38 Department for Work and Pensions Annual Report and Accounts 2014-15
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Percentage of young people not in education who aren’t in employment 
Our perf
This indicator shows the proportion of people age 18-to-24-years-old who aren’t in 
full-time education and aren’t in employment. 
ormance – analy
The latest data is for January to March 2015, and shows there were 3.9 million 
18-to-24-year-olds not in full-time education. Of these, 1.0 million (26%) weren’t
in work. This is 0.7 percentage points lower than the previous quarter (October to
December) and 1.9 percentage points lower than the previous year. Neither of these
changes are statistically significant.
sis
Data is published quarterly but is seasonally adjusted, so quarter-on-quarter 
comparisons can be made. Our confidence interval for a single quarterly estimate is 
±1.4%, and our confidence interval for a year-on-year change is approximately ±2%.
31 .6%
30 .3%
27 .9%
26 .0%
2011-12
2012-13
2013-14
2014-15
Source: Labour Force Survey.
Other data sets
Percentage of claimants for whom providers have achieved a job outcome 
payment at 12 months on the Work Programme
This indicator measures the proportion of claimants for whom providers were paid 
a job outcome payment at 12 months on the Work Programme. We measure it for 
each monthly intake. The latest data shows the proportion of referrals achieving a 
job outcome payment at 12 months as 13.1% for the cohort joining in March 2012, 
12.9% for the cohort joining in March 2013 and 17.1% for the cohort joining in March 
2014. This compares to 8.4% for those joining in June 2011 – the first monthly intake 
of people to join the Work Programme.
17 .1%
13 .1%
12 .9%
March 
 March 
March 
2012
2013
2014
Source: DWP internal management information.
38
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Number of Incapacity Benefit claimants reassessed and number moving to 
Employment and Support Allowance
This indicator measures progress in reassessing claimants who still claim incapacity 
benefits that preceded the introduction of Employment and Support Allowance 
(ESA). 
The data, published 11June 2015, shows that a total of 1,395,290 claimants had 
begun the Incapacity Benefit reassessment before the end of September 2014. Of 
the 1,395,290 claimants: 1,084,550 were entitled to the benefit and moved onto 
ESA; 257,700 were assessed as fit for work and so not entitled to ESA; and 53,040 
left benefit before the process was complete.
Latest outcome information covers to the end of March 2015. The graph doesn’t 
include 25,760 claimants who began the reassessment before the end of September 
2014 but whose Incapacity Benefit claims are still going. 
53,040
Left before completing assessment
257,700
Assessed as fit for work and 
therefore not entitled to ESA
1,084,550
Number of people moving  
 
on to ESA
Source: DWP benefit data plus assessment data from Atos Healthcare.
Priority 3: Enabling disabled people to fulfil their 
potential
Business plan actions 
Actions due in 
due in 2014-15
Completed 
Missed 
future years
5
5
0
3
Achievements in 2014-15
•  publishing a third-party review of the way we assess people for Personal 
Independence Payment 
•  publishing a cross-government report on initiatives to improve disability 
employment
•  publishing ‘Fulfilling Potential – Making it Happen’ and reviewing progress and 
publishing updates against it
•  administering the Facilitation Fund, working with representatives from disabled 
people’s user-led organisations and ambassadors to make local organisations 
more sustainable
40 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Business plan impact indicators
Gap between the employment rates for disabled people and the 
overall population
ormance – analy
This indicator compares the employment rate of disabled people to the employment 
rate of the total working-age population. The data for January to March 2015 shows 
a gap of 26.6 percentage points. This is an improvement of 1.2 percentage points 
from 12 months earlier – though this change isn’t statistically significant.
Data is published quarterly and isn’t seasonally adjusted, so only year-on-year 
sis
comparisons are meaningful. The 95% confidence interval is ±1.4 percentage points. 
Estimates of disability from the Labour Force Survey for 2013 onwards should not be 
compared directly with earlier years due to a change in definitions. 
27 .8%
26 .6%
2013-14
2014-15
Source: Labour Force Survey (published by the Office for National Statistics).
Rate of disability poverty
This indicator measures the rate of disability poverty by producing a ‘Before Housing 
Costs’ equivalised income for all individuals, calculating the median (which in  
2013-14 was £453 a week) and then looking at how many people in families 
containing someone who is disabled fall below a threshold of 60% of the median.
The latest figure for 2013-14 is 20%. The change in the poverty rate is 1 percentage 
point higher than the previous year once figures are rounded. The actual change 
is less than 0.5 percentage points (19.29% to 19.63%) and is not statistically 
significant. 
The Family Resources Survey definition of disability changed in 2012-13. As a result, 
comparisons between 2012-13 and previous years should be made with caution.
20%
20%
19%
18%
2010-11
2011-12
2012-13
2013-14
Source: Family Resources Survey with analysis by DWP.
Our Disability Confident campaign seeks to challenge attitudes and build 
confidence in employing disabled people. It receives support from several high profile 
companies and organisations.
Sponsorship over £5,000 (2014-15)
Sponsor
Amount
Purpose
Motability
£5,562
To cover the accommodation costs of the 
Cardiff Disability Confident event.
40
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Priority 4: Promoting saving for retirement and 
ensuring saving pays 
Business plan actions 
due to complete in 
Actions due in 
2014-15
Completed 
Missed 
future years
2
2
0
3
Achievements in 2014-15

introducing legislation to change state and private pensions by:
- creating the new State Pension and Bereavement Support Payment
-  increasing the State Pension age to 67, eight years earlier than originally
planned
-  introducing a framework for periodic review of the State Pension age subject to
Parliamentary approval

raising awareness about automatic enrolment
Business plan impact indicators
Number of people in a pension scheme sponsored by their employer 
This indicator measures the number of employees (in other words, excluding the 
self-employed) who are at least 22 years old, under State Pension age, earning 
above the earnings threshold for automatic enrolment (£9,440 in 2013-14 earnings 
terms) and participating in a pension scheme sponsored by their employer.
The number of employees in a pension scheme sponsored by their employer increased 
by 2.2 million between 2013 and 2014, continuing the reversal of the previous 
downward trend. This change is statistically significant. An increase of at least 100,000 
employee jobs, based on unrounded data, would demonstrate an improvement.
13 .9m
11 .4m
11 .7m
11 .0m
10 .7m
2010
2011
2012
2013
2014
Source: Annual Survey of Hours and Earnings.
Average age people stop working
This indicator measures the ages at which older people withdraw from the labour 
market.
The latest data for January to March 2015 shows that men, on average, stop working 
42 Department for Work and Pensions Annual Report and Accounts 2014-15
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at 64.8, the same as one year ago. Women, on average, stop working at 63.1. This 
Our perf
is slightly lower than the same quarter in 2013, but the difference isn’t statistically 
significant. However, there has been a statistically significant change of 0.5 years for 
women since January to March 2011.
ormance – analy
A 0.5-year increase in the average age of withdrawal would demonstrate an 
improvement. Data isn’t seasonally adjusted, so only year-on-year comparisons are 
meaningful.
sis
Men
64 .5
64 .6
64 .7
64 .8
64 .8
62 .8
63 .0
63 .2
63 .1
Women
62 .4
2010-11
2011-12
2012-13
2013-14
2014-15
 
Source: Labour Force Survey.
Rate of pensioner poverty
This indicator measures the rate of pensioner poverty by producing an ‘after  
housing costs’ equivalised income for all individuals, calculating the median (which 
in 2013-14 was £386 a week) and then looking at how many pensioners fall below 
a threshold of 60% of the median. The figures for each year are adjusted for family 
size and composition. This adjustment allows us to compare different household 
types in a robust way.
The rate of pensioner poverty in 2013-14 was 14%. Although this represents 
an increase of 1 percentage point since 2012-13, this change is not statistically 
significant. 
This slight upward trend is explained by net overall household incomes being 
supported by several impacts which pensioners would have benefitted from less. 
These include high employment rates, a fall in the number of workless families, and 
reductions in job-related taxes from changes in the tax-free Personal Allowance. The 
combined impact has been to keep the median income steady and the relative low-
income rate flat.
14%
14%
13%
13%
2010-11
2011-12
2012-13
2013-14
Source: Family Resources Survey with analysis by DWP.
42
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Priority 5: Recognising the importance of the 
family in children’s lives
Business plan actions 
Actions due in 
due in 2014-15
Completed 
Missed 
future years
2
2
0
2
Achievements in 2014-15

implementing the Family Test across Whitehall. When we develop policy this test
will ensure that any possible impact on family relationships is clear

delivering a programme to help separated parents work together in the best
interests of their children
Business plan impact indicators
Percentage of children living in workless households 
(October to December each year)
This indicator measures the proportion of children (aged under 16) who live in 
workless households. We define these as households where none of the members 
aged 16 or over are in employment. 
The latest data shows that an estimated 12.7% of children were living in workless 
households in October to December 2014. Changes over time have a confidence 
interval of ±0.9 percentage points, so the 0.8 percentage point fall since 2013 isn’t 
statistically significant. However, since 2010 there has been an improvement of 3.5 
percentage points, and that is statistically significant.
The Household Labour Force Survey data is published for April to June and October 
to December each year. Data isn’t seasonally adjusted, so only year-on-year 
comparisons are meaningful.
16 .2%
15 .9%
14 .4%
13 .5%
12 .7%
2010
2011
2012
2013
2014
Revised prior year figures.
Source: Household Labour Force Survey.
44 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Other data set
Percentage of households that are workless in the UK  
 
 
(October to December each year)
ormance – analy
This indicator measures the proportion of households in the UK that are workless. 
We define these as households where none of the members aged 16 or over are in 
employment. 
The latest data shows that an estimated 15.9% of households were workless 
sis
in October to December 2014. Changes over time have a confidence interval of 
±0.5 percentage points, so the 0.9 percentage point improvement since 2013 is 
statistically significant. Since 2010 there has been an improvement of 3.0 percentage 
points, and this is also statistically significant.
The Household Labour Force Survey data is published for April to June and October 
to December each year. Data isn’t seasonally adjusted, so only year-on-year 
comparisons are meaningful.
18 .9%
18 .8%
17 .4%
16 .8%
15 .9%
2010
2011
2012
2013
2014
Revised prior year figures.
Source: Household Labour Force Survey. 
 
Priority 6: Improving public services and reducing 
costs
Business plan actions 
Actions due in 
due in 2014-15
Completed 
Missed 
future years
3
3
0
0
Achievements in 2014-15
•  matching data with HM Revenue and Customs to identify where claimants have 
either failed to declare or under-declared earnings and private pensions. In  
2014-15 we issued 368,872 referrals and achieved significant savings. This project 
won the prevention category in the public sector 2015 Fighting Fraud awards
•  recovering an additional £50 million in benefit debt in 2014-15 – for a total of 
£455 million recovered 
•  taking forward plans to remove or improve around 84% of health and safety 
regulations
44
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Business plan input indicator
Productivity
Our productivity measure relates the volume of output in each financial year to 
the volume of input consumed. An increase in this measure indicates that we’ve 
delivered relatively more output for less input. Our provisional figures for 2014-15 
show that we’ve sustained the same level of productivity as in 2013-14. Overall, our 
productivity has increased by 14% since 2010-11.
150
140
Productivity
130
120
110
Output
100
90
Index (2007-08 = 100)
80
70
Input
60 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Business plan impact indicators
Fraud and error in the benefit system
This indicator estimates the levels of overpayment and underpayment, as a 
percentage of benefit expenditure, due to fraud and error. It spans the benefit 
system and includes benefits administered by us and local authorities. Estimates 
are published twice a year: preliminary estimates in May or June and final estimates 
in November or December. The preliminary estimate of total benefit expenditure 
overpaid in 2014-15 is 1.9%. This is a slight (not statistically significant) decrease 
when compared to the previous final estimates of 2.1%. The preliminary estimate 
of total benefit expenditure underpaid in 2014-15 is 0.9%, which is unchanged from 
the 2013-14 and 2012-13 final estimates.
3
Overpayments
2.5
Underpayments
2
1.9%
% 1.5
1
0.9%
0.5
0
2010-11
2011-12
2012-13
2013-14
2014-15
Source: DWP sample survey of approximately 26,000 benefit cases covering Income Support, Jobseeker’s 
Allowance, Employment and Support Allowance, Pension Credit and Housing Benefit, and one-off National 
Benefit Reviews for various benefits.
46 Department for Work and Pensions Annual Report and Accounts 2014-15
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Claimant opinion of departmental service
Our perf
This indicator looks at Jobseeker’s Allowance, Employment and Support Allowance, 
Income Support, Disability Living Allowance, Attendance Allowance, Carer’s 
ormance – analy
Allowance, State Pension, Pension Credit, Personal Independence Payment and 
Universal Credit claimants who had meaningful contact with us in the three months 
before the fieldwork. It measures the percentage of claimants who are either fairly 
or very satisfied with the service they received. 
Latest data shows we have achieved an overall customer satisfaction rating of 82%, 
sis
which is an improvement on the 81% achieved in 2013. 
In April 2014 the survey changed from annually to quarterly. The survey uses data 
from 14,918 telephone interviews, conducted on a quarterly basis between July 
2014 and May 2015. Therefore the overall annual score is based on all four quarters 
of data for the financial year 2014-15.
89%
83%
81%
82%
2011
2012
2013
2014-15
Source: Claimant Service and Experience Survey conducted by a third-party research organisation and 
analysed by DWP.
Other data set
Percentage of Jobseeker’s Allowance claims submitted online
This indicator measures the proportion of all new Jobseeker’s Allowance claims that 
are submitted online.
The latest data for May 2015 shows that 85.1% of Jobseeker’s Allowance claims 
were submitted online. This is slightly lower than the 86.8% achieved in May 2014, 
and up 72.8 percentage points from the 12.3% achieved in May 2011.
86 .8%
85 .1%
65 .4%
23 .4%
12 .3%
May 2011
May 2012
May 2013
May 2014
May 2015
Source: DWP internal management information.
46
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Our performance against other 
required reporting
Financial overview
For each government department HM Treasury submits an annual financial plan to 
Parliament. This is called an Estimate, and it’s how we get Parliament’s authority 
to spend public money. Our Main Estimate, which starts the process, was agreed in 
April 2014. During the year we agreed some changes to our administrative budget 
with HM Treasury. We announced these to Parliament through our Supplementary 
Estimate in February 2015:
•  £167.6 billion for pension and benefit payments (known as Annually Managed 
Expenditure (AME)) 
•  £7.2 billion for daily operations and our arm’s length bodies (known as 
Departmental Expenditure Limit (DEL))
When Parliament granted its authority, it voted for limits in some areas of our 
spending. It also put control limits on our spending (both voted and non-voted) in 
our DEL budget. In 2014-15 we didn’t exceed any of our voted limits and control 
totals. 
The table below shows the difference between our total resource outturn and the 
Supply Estimate. It also shows that our net operating costs were £175 billion. That’s 
2.4% more than in 2013-14, mainly due to an increase of £3.95 billion in pension 
and benefit payments. Further information is in the Statement of Comprehensive Net 
Expenditure and in notes 6 and 7 to the departmental accounts. 
Reconciliation of resource expenditure between 
Estimate, accounts and budget 
 
2014-15
2013-14
£m
£m
Total resource budget Estimate
178,903
174,480
Adjusted to remove non-budget 
(2,557)
(2,490)
Total resource budget Estimates
176,346
171,990
Total resource outturn
176,850
172,731
Total resource non-budget outturn
(2,059)
(2,051)
Total resource budget outturn
174,791
170,680
Of which:
Departmental expenditure limits (DEL)
7,152
7,359
Annually managed expenditure (AME)
167,639
163,321
Adjustments include:
Capital Grants
(1)
-
Consolidated fund extra receipts
(12)
(10)
Private Finance Initiative adjustment
27
23
Net operating cost (accounts)
174,805
170,693
48 Department for Work and Pensions Annual Report and Accounts 2014-15
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At the start of each year we estimate our costs for each budget type and we monitor 
Our perf
these throughout the year. The size and complexity of our budget, along with 
economic, environmental and social changes, means there will inevitably be some 
variance from our Estimates. Significant variances are:
ormance – analy
Variance to 
Outturn £m
Estimate % Reason for variance
Voted DEL
Operational delivery - resource
1,859
(15%) Service concession costs now reported here 
(previously departmental operating costs)
sis
Other programmes - resource
256
(13%) Additional costs relating to Remploy 
pensions deficit not forecast at 
Supplementary Estimate
Departmental operating costs – resource
2,150
14% Service concession costs now reported 
against operational delivery
Departmental operating costs - capital
97
29% £30 million legal costs anticipated at 
Supplementary Estimate did not materialise
Voted AME
Universal Credit
56
57% Expenditure reflects changes to UC rollout
Non-voted AME
Expenditure incurred by the Social Fund - resource
2,125
20% Very mild winter resulted in minimal 
expenditure on Cold Weather Payments, 
and net Social Fund lending was lower than 
expected
Expenditure incurred by the Social Fund - capital
(124)
(24%) Recoveries were higher than the £100 million
anticipated in the Estimate
Voted non-budget
Cash paid into the Social Fund - resource
2,059
20% Winter 2014-15 was milder than anticipated 
when the Supplementary Estimate was 
finalised, resulting in minimal expenditure on 
Cold Weather Payments, reducing the cash 
requirement to be paid into the Fund
Our assets and liabilities are shown in the Consolidated Statement of Financial 
Position (SoFP) and core table 3, with the following exceptions:

possible future liabilities which cannot be quantified with any certainty (these are
disclosed in note 24 to the accounts)

possible future liabilities which would require the voting of additional funding
through a Supply Estimate (these are disclosed in note 25 to the accounts)
48
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Promoting mainstream sustainability
Economic 
We aim to achieve high and sustainable levels of 
employment to support economic growth.
Social
We aim to recognise the needs of everyone and support 
those with complex barriers to turn their lives around for the 
better.
Environmental
We aim to make prudent use of natural resources to help 
protect the environment.
We support the UK Strategy for Sustainable Development and the government’s 
commitment to make sustainable development standard in everything we do. The 
overall goal is to become the ‘greenest government ever’.
Our sustainability report, which can be found on www.gov.uk, includes more detail 
but here’s a summary:
Initiative
Activity in 2014-15
Mainstreaming sustainability
•  assessing and managing the social and environmental impact when
developing new policies
•  building sustainability training into induction training for all staff
•  developing a network of over 900 environment champions
Sustainable procurement
•  procuring more sustainable and efficient products by improving our
understanding of the supplier chain
•  working towards the government target of 25% of our expenditure with
providers going to small and medium sized businesses – current estimates
show we are achieving 15.84% which is up slightly from 15.63% in 2013-14
Climate change adaptation
•  using evaluation tools which contain questions about climate change
•  using flood risk assessments as a practical tool in business continuity
planning
Rural proofing
•  being flexible enough to meet the needs of rural communities, businesses
and people
•  Case Study:
The ‘Elevate me’ programme in Thames Valley provides a web supported
job and training service for young unemployed people.  It seeks to reach
and support employers and claimants throughout the Thames Valley area, 
including several rural areas
Biodiversity
Increasing  biodiversity activity on our estate through projects such as:
• installing bird boxes, feeders and planted areas on our site in Blackpool
•  sowing wild flowers and grassland with habitat management on our site in
Hastings
•  establishing an environmental garden to support the local wildlife
population on our site in Cardiff
50 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Summary of our performance: cross-government 
greening government commitments
ormance – analy
2009-10 
2013-14 
2014-15 
2015-16 
Our performance 
baseline
performance
performance
target
against target
Reduce greenhouse gas emissions by 25% from a 2009-10 baseline from the whole estate and business-related transport (TCO e)
sis
2
Total greenhouse gas emissions 
202,3411 
133,483
130,9592
151,755
exceeded
Reduce domestic business travel flights by 20% from a 2009-10 baseline
Number of domestic flights 
21,931
8,397
9,042
17,5453
exceeded
Reduce the amount of waste we generate by 25% from a 2009-10 baseline (tonnes)
Total volume of waste produced
16,626
12,548
10,612
12,470
exceeded
Target is to reduce 
Volume of waste recycled
10,522
8,332
6,680 and not numerical
met
Reduce the amount of paper used
Target is to reduce 
A4 reams
2,061,685
1,094,590
890,570 and not numerical
met
Target is to reduce 
A3 reams
8,606
3,655
3,610 and not numerical
met
Target is to reduce 
Cost of cut paper
Not available
£2,114,3724 
£1,691,958 and not numerical
met
Reduce water consumption from a 2009-10 baseline and report on office water use against best practice benchmarks
Target is to reduce 
Total water consumption
810,701 
626,818
595,194 and not numerical
met
Water use performance against best practice benchmarks (based upon rounded data)
2009-10 
2013-14 
2014-15 
baseline 
performance 
performance
Best practice (<4m³/FTE) 
107
110
66
There is currently 
no target for water use 
Best practice (4-6m³/FTE)
500
311
267
against best practice 
Best practice (>6m³/FTE)
156
296
372
benchmarks
Our waste management costs are included in our PRIME contract overall facilities 
management fee and cannot be separated out. Our supplier manages the collection 
and recycling of all the waste on our sites.
1.  The Department for Environment, Food and Rural Affairs changed the way carbon was calculated
two years ago and applied this retrospectively to the baseline year. This changed our baseline from
204,621. It calculates carbon by multiplying consumption of gas, electricity and mileage on business 
travel by a factor that converts kilowatt hours or miles into kilograms of carbon.
2.  This figure contains estimated fugitive emissions data as annual data wasn’t available.
3.  This figure is adjusted due to the new baseline. It was previously 16,448.
4.  There was a transposition error in the Annual Report and Accounts 2013-14. The correct figures for 
the costs of cut paper are: £2,448,188 in 2012-13 and £2,114,372 in 2013-14.
50
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Reducing costs through better regulation
By improving regulation we reduced burdens on businesses across the UK. In 2013 
we moved to a one-in, two-out system from a one-in, one-out system. One-in, 
two-out means that no new primary or secondary UK legislation which imposes 
direct costs on business or civil society organisations can be brought in without 
an offsetting reduction of at least twice the cost imposed. We had a deficit of 
£16 million in 2014-15 under the one-in, two-out system but this needs to be seen 
in the context of the £800 million saved under the one-in, one-out system over the 
last Parliament. This was the highest level of net saving of any department and 
was recognised in the Department for Business, Innovation and Skills (BIS) Ninth 
Statement of New Regulation published on www.gov.uk in December 2014. 
We implemented most of our key Red Tape Challenge measures by prioritising the 
areas which reduced burdens on businesses. In particular, we saved businesses 
£10.7 million a year by replacing two sets of regulations with one: the Occupational 
and Personal Pension Schemes (Disclosure of Information) Regulations 2013. 
Through our programme to reinvigorate occupational pensions, we introduced 
legislative measures that could have a significant impact on businesses. These 
included automatic enrolment and fairer pension scheme charges. We tried to 
minimise burdens on businesses through measures such as delaying the start of the 
roll-out for small employers by 15 months and delaying the incremental increases in 
minimum employer contributions by a year. 
Over the course of the last Parliament, the Health and Safety Executive reviewed its 
200 pieces of legislation and made substantial reforms. These included removing or 
improving around 84% of its regulations by December 2014. This reduced the overall 
stock of legislation by 50%. Through its revisions to the Construction Design and 
Management Regulations alone, the Health and Safety Executive saved businesses 
£19.6 million a year. And vitally, it achieved all this without compromising health and 
safety protections for workers. 
In March 2015 the Regulatory Policy Committee published ‘Securing the evidence 
base of regulation’. This report which can be found on www.gov.uk ranked the Health 
and Safety Executive in first place, as it found 92% of their initial submissions on the 
impact of its regulations were fit for purpose during 2010-15. This compared to a 
cross-government average of 78%.
52 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Claimant feedback
We value feedback from our claimants and learn from this wherever possible. This 
ormance – analy
year, we made several improvements as a direct result of claimant feedback. These 
included:

setting up dedicated teams to manage all call-back requests for new claims and
mandatory reconsiderations to make sure we meet our promised timescales

improving the process for updating claimants’ bank details to make sure we
sis
don’t send payments to the wrong bank

making our call-handling more professional through technical improvements
and staff training
During 2014-15 we continued to focus on improving the way we interact with 
the public. This has contributed to a 13,661 drop in the number of complaints we 
received this year compared to last year - a significant reduction.
Complaints received
2012-13
2013-14
2014-15
93,688
67,666
54,005
We’ve restated the figure for 2012-13 since the publication of the Annual Report and 
Accounts 2013-14.  We previously recorded it as 94,609 but assurance testing showed 
that we’d incorrectly counted some cases as complaints.  
We publish our complaints procedure on our website. 
People can ask the Independent Case Examiner to investigate their complaint if they 
aren’t happy with our response or a response from one of our providers. In 2014-15, 
the Independent Case Examiner dealt with 1,046 complaints. Of these:

42 were withdrawn by the complainant

220 had an agreement brokered by the Independent Case Examiner between
the relevant parties

487 were upheld, fully or partially, by the Independent Case Examiner

297 were not upheld
Complaints considered 
by the Independent Case 
Examiner
2012-13
2013-14
2014-15
1,273
1,117
1,046
If the Independent Case Examiner can’t resolve a complaint, people can sometimes 
ask an MP to raise their issue with the Parliamentary Ombudsman. In April 2013, 
the Ombudsman’s office introduced new operational practices. These mean every 
complaint which has been properly made will be accepted for investigation. This has 
led to an increase in investigated complaints. Figures for 2014-15 will be available in 
late summer 2015, but in 2013-14 the Ombudsman investigated and reported on 76 
complaints.
Complaints considered 
by the Parliamentary 
Ombudsman
2011-12
2012-13
2013-14
18
16
76
52
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Complaints to the Parliamentary Ombudsman in 
2013-14
e than 
or 
ed f
ve mor
ted on
tially upheld 
ts ha
ts accept
epor
ully upheld
ation
ts r
ts f
ts par
ts not upheld
Complain
Recommendations complied with 
ecommendation)
Recommendations not 
Departmental business
investig
Complain
Complain
Complain
Complain
(some complain complied with
one r
Jobcentre Plus
12
11
3
3
5
8
0
Child Maintenance Group
7
3
1
2
0
4
0
Independent Case Examiner
133
58
2
5
51
5
0
Pension, Disability and Carers 
Service
2
2
0
0
2
0
0
Debt Management Unit
1
1
0
1
0
2
0
Independent Living Fund
0
0
0
0
0
0
0
Independent Review Service for 
the Social Fund
1
1
0
0
1
0
0
Total 
156
76
6
11
59
19
0
We make special payments to people who have incurred additional costs, losses 
or other effects due to our maladministration. In 2014-15, we authorised 9,197 
ex gratia payments totalling £1.6 million. 
These payments exclude financial redress paid for loss of statutory entitlement 
and advance payments of child maintenance. The total cost of these payments in 
2014-15 was £864,800. This money is excluded as it is not an extra cost arising from 
maladministration and it would have been either paid or recovered from another 
person. 
These figures also exclude any special exercises to address cases where current 
legislation does not allow payments which were intended by Parliament or ministers. 
54 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our perf
Correspondence with our ministers 
Our ministers frequently receive correspondence about our services from MPs and 
ormance – analy
members of the public. Between January and December 2014, our ministers received 
more than 32,000 pieces of correspondence. Of these, 15,280 were from other MPs 
and the rest were from members of the public. We replied to 89% of these within 20 
working days - just short of the 90% target.
sis
54
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Our controls
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Our con
How we were structured in 2014-15
tr
ols
The Secretary of State for Work and Pensions, appointed by the Prime Minister, has 
overall responsibility for the departmental group. This group consists of the core 
department and 12 arm’s length bodies. The core department consists of our public 
services and our corporate centre. Our arm’s length bodies (as shown in the table 
below) consist of non-departmental public bodies and public corporations that vary 
in purpose and nature. They provide a number of functions including regulation and 
pensions and nuclear industries, protection and safeguards for the public, as well 
as the provision of information and guidance. They operate independently but are 
accountable to the department.
Classification
Pension bodies
Other bodies
Public corporations
Pension Protection Fund
Office for Nuclear Regulation
National Employment Savings Trust  Disabled People’s Employment 
Corporation
Corporation (formerly Remploy Ltd)
Executive non-departmental 
The Pensions Regulator
Health and Safety Executive
public bodies
The Pensions Advisory Service
Independent Living Fund
Tribunal or advisory non-
Pensions Ombudsman
Industrial Injuries Advisory Council
departmental public bodies
Pension Protection 
Social Security Advisory Committee
Fund Ombudsman
Most of these arm’s length bodies come within our accounting boundary and are 
consolidated into the accounts of the departmental group. The exceptions are the 
Office for Nuclear Regulation, Disabled People’s Employment Corporation, Pension 
Protection Fund and National Employment Savings Trust Corporation.
The Secretary of State is supported by ministers, non-executive directors, the 
Permanent Secretary and 3 executive directors general, all of whom form the 
departmental board. The board met 4 times during 2014-15.
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Our departmental board
Our ministers
The Right Honourable Iain Duncan Smith MP
 Secretary of State for Work and Pensions and chair of the 
departmental board
Attended all board meetings 
Lord Freud
 Parliamentary Under-Secretary (Lords) and Minister for Welfare 
Reform 
Attended all board meetings
Steve Webb MP
Minister of State for Pensions
Attended all board meetings
The Right Honourable Esther McVey MP
Minister of State for Employment
Attended 3 board meetings
Mark Harper MP 
 Minister of State for Disabled People
 (The Right Honourable Mike Penning MP also held this role during 2014-15)
Attended 3 board meetings
(The Right Honourable Mike Penning MP attended 1 board meeting)
Our non-executive directors
Dame Clara Furse DBE
Lead non-executive director
(Sir Ian Cheshire also held this role in 2014-15)
Attended all board meetings
(Sir Ian Cheshire attended 2 board meetings) 
David Lister
Non-executive director
Attended all board meetings
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Our con
Willy Roe 
tr
Non-executive director
ols
Attended 3 board meetings
Lieutenant General (retired) Andrew Graham CB CBE
Non-executive director
 (Lt General (retd) Andrew Graham was appointed a non-executive director 
on 12 March 2015)
Attended 1 board meeting as a non-executive director and 
interim chair of the Departmental Audit and Risk Assurance 
Committee 
Our executive directors
Robert Devereux
Permanent Secretary 
Attended all board meetings
Mike Driver
Director General, Finance
Attended all board meetings
Noel Shanahan 
Director General, Operations
Attended all board meetings
Mayank Prakash
Director General, Technology
Attended 1 board meeting
Before Mayank Prakash’s appointment, we had a Director General of IT who was a 
member of the departmental board. In 2014-15 this role was held by Andy Nelson 
until 10 July 2014 and by Steve Riley from 7 July 2014 to 31 December 2014. Andy 
Nelson attended 1 board meeting.
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What the board does
The departmental board led the core department both strategically and 
operationally. It also scrutinised and challenged issues affecting our performance 
and policies. The board has 5 main areas of responsibility:

setting standards and values and monitoring performance against our plans

ensuring all our activities contribute to our strategies

scrutinising our financial allocations and our change portfolio

ensuring we can deliver our plans

setting our risk appetite and ensuring the controls we have in place work
The departmental board had two sub-committees: the Departmental Audit and Risk 
Assurance Committee and the Nominations Committee. In addition, in March 2015, 
the board agreed to set up a new sub-committee called the Technology Advisory 
board to advise on IT and digitisation from April 2015. The board delegates work to 
the committees so smaller groups of board members can examine issues in more 
detail. The committees then present their findings to the board for discussion and 
conclusion.
The Departmental Audit and Risk Assurance Committee provided an independent 
view of the appropriateness, adequacy and value for money of our governance, risk 
management, control and associated assurance processes. The committee received 
and reviewed regular updates on our significant control issues. 
The Nominations Committee advised on raising our leadership capability and 
on talent management. Its goal was to improve our succession planning. It also 
scrutinised our incentive schemes. 
The Permanent Secretary was responsible for the executive management of the 
core department and, as the Principal Accounting Officer, was directly responsible to 
Parliament for departmental group expenditure and management. The Permanent 
Secretary was supported by a team of directors general who form the executive 
team.
Our executive team 
As at 31 March 2015, our executive team consisted of the Permanent Secretary and 
8 directors general, 3 of whom also sit on the departmental board. 
The directors general had responsibility for supporting the Permanent Secretary 
in managing the department and its business, in line with ministers’ aims and the 
business strategy set by the departmental board. 
Robert Devereux
Permanent Secretary, Principal Accounting Officer 
and departmental board member
Responsible for overall departmental expenditure 
and management
Mike Driver 
Director General, Finance
Responsible for providing financial and commercial 
services, information management, security services 
and governance advice
Noel Shanahan
Director General, Operations
Responsible for leading day-to-day delivery of the 
department’s public services
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Our con
Mayank Prakash
Director General, Technology
Responsible for providing technology services
tr
Neil Couling
Director General, Universal Credit 
ols
(Howard Shiplee CBE also held this role for part of 2014-15)
Responsible for the Universal Credit programme
Debbie Alder
Director General, Human Resources
Responsible for providing human resources services 
and business continuity
Jeremy Moore 
Director General, Strategy, Policy and Analysis
Responsible for giving ministers a joined-up view of 
their policies, developing proposals for change and 
managing the department’s spending on welfare
Kevin Cunnington
Director General, Digital Transformation
Responsible for developing and overseeing the 
department’s business and digital transformation 
strategies
Claire Johnston
Director General, Legal Services and the department’s 
senior legal adviser (DWP’s legal services are provided 
by the Government Legal Department)
Responsible for providing legal services
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Staff information
Senior civil servants
Our executive directors are all senior civil servants. In total there were 213 individual 
senior civil servants in the core department, totalling 210.05 whole-time equivalents, 
as at 31 March 2015. This is 7 fewer than a year earlier.
31 March  31 March  31 March  31 March 
Senior civil servant headcount by payband
2012
2013
2014
2015
Permanent Secretary
£142,000 to £200,000
1
1
1
1
SCS3
£103,000 to £208,100
6
5
7
7
SCS2
£84,000 to £162,000
47
54
45
47
SCS1
£60,000 to £117,000
162
165
167
158
Total
216
225
220
213
Staff numbers
In the departmental group, which includes the core department and our arm’s 
length bodies that fall within our accounting boundary, we had 81,936 whole-time 
equivalent staff on payroll as at 31 March 2015. That’s 5,728 fewer than a year 
earlier and 18,314 fewer than in 2012. 
Departmental Group Staffing (WTE) as at 31 March
100,250
96,284
87,664
81,936
2012
2013
2014
2015
Breakdown of departmental group staffing (Core Table 5)1
31 March
31 March
31 March
31 March
Payroll staff WTE
2012
2013
2014
2015
Core department
88,626
92,530
83,942
78,743
Arm’s length bodies
11,624
3,754
3,722
3,193
My Civil Service Pension transferred to the Cabinet Office on 1 February 2011 but the 
staff remained on our payroll in 2012. They were removed from the 2013 figures for 
the core department. 
1.  The numbers for previous years have been restated to include only those arm’s length bodies that are 
included in our accounting boundary as per Cabinet Office guidance.
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The Child Maintenance Group, which was an arm’s length body, became part of the 
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core department on 1 August 2012. Its staffing figures are included in the arm’s 
length bodies’ figures for 2012 in the table above.
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2,366 people left the core department on voluntary exit schemes in 2014-15. Most of 
these were from schemes in Operations launched in December 2013. We launched a 
targeted voluntary exit scheme in October 2014. 3,834 people left on this scheme in 
June 2015. 
We recruited 2,222 whole-time equivalent staff this year to fill specific geographical 
frontline vacancies and skills gaps. Over 1,800 of these were recruited on fixed-term 
or temporary contracts. They included over 350 apprenticeships.
Diversity and Equality
We are committed to ensuring that our workforce represents the diversity of the 
people we serve.  We treat all our staff fairly and with respect regardless of their 
individual circumstances.
31 March  31 March  31 March 
Staff diversity by gender (core department)
2013
2014
2015
Workforce
Women %
68.3
68.9
68.9
Senior civil servants1
Women %
37.7
37.7
36.6
Ministers
Women %
20.0
20.0
Non-executive directors
Women %
25.0
28.6
Executive team
Women %
12.5
22.5
We continue to play an active role in developing talent through the Civil Service High 
Potential Stream (CSHPS). In 2014 we made 63 nominations for the CSHPS of which 
31(49%) were female. 13 of our 63 nominations were successful and of these 6 were 
female.
We also currently have 8 participants on the Future Leaders Scheme. 5 of these 
are female which is helping us to grow our talent for, and support diversity at, the 
deputy director level.   
Our 2014 cohort on the Senior Leaders Scheme is currently all male. We are working 
with civil service and departmental support networks, such as the director general 
champions, to understand the reasons behind this with a view to redressing the 
imbalance in future years.  
We currently have one female accepted on to the High Potential Development 
Scheme.  This indicates that women are being actively considered and accepted on 
to our most senior talent development programmes.
Loaning staff is another way in which we develop our top talent by broadening their 
careers through the acquisition of valuable skills and knowledge. During 2014-15 we 
loaned 4 females to other organisations compared to 1 male.
We embrace equality and diversity in our services and our day-to-day interaction 
with claimants and partners, as well as our staff. 
1.   The SCS figures for March 2013 and March 2014 have been restated to exclude legal SCS staff who 
transferred to the Government Legal Department in 2014-15. This is to enable direct comparisons to
be made between the years following a machinery of government change to transfer our legal team to
the Government Legal Department.
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Our equality policy
Area of focus
Activity
Improving the day-to-day  We are bound by employment legislation, the Civil 
experience of our disabled  Service Commission’s Recruitment Principles and 
employees
the Civil Service Management Code for all selection 
activity.  We make reasonable adjustments for 
job applicants and we implement the Guaranteed 
Interview Scheme.
Other activities include: 

supporting the cross Civil Service pilot to deliver
a centralised and consistent service for complex
workplace adjustments

working with the national staff equality group to
implement an employee ‘disability passport’ so
people can quickly get the right support when
they move job roles

demonstrating commitment to the Time to
Change and Public Health Responsibility pledges
on mental health
Raising aspirations and 
We encouraged our employees to participate in 
developing diverse talent in  the cross-government Positive Action Pathway 
conjunction with the Civil 
development programme for women, ethnic 
Service Talent action plan
minorities and disabled employees.  We have the 
highest number of participants of any department.
Continuing to embed  the 
We looked critically at our major change 
Equality Act
programmes to ensure our services are accessible for 
everyone.  We publish our Public Sector Equality Duty 
information and our Equality Information reports on 
our website on www.gov.uk.
Employee health and safety and attendance management
We remain committed to protecting the health and wellbeing of our employees, 
claimants and visitors across our organisation. This year we showed this through a 
wide range of activities and services. This was recognised for the sixth consecutive 
year by our achievement of a Royal Society for the Prevention of Accidents Gold 
Award. We managed our employee health and safety risks through proportionate 
policies and procedures. In September 2014 we published the ‘DWP Health, Safety 
and Wellbeing Annual Report’, which contains details of our health and safety 
performance.
We recognise the costs associated with high levels of employee absence, including 
the impact on productivity and customer service. Our attendance management 
policies are designed to help our people achieve satisfactory attendance and 
performance. We aim to minimise absences by supporting those who are absent to 
help them return to work as soon as possible. We also endeavour to treat all staff 
fairly and consistently.
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Average number of days lost due to sickness
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7 .4
 Our continued focus on our attendance 
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management policies has reduced the 
average number of days lost due to sickness. 
This has fallen from 7.4 days in March 2013 
6 .9
to 6.5 days in March 2015. Our average 
number of days lost due to sickness is 
6 .5
significantly below the civil service average 
of 7.3 days and we are consistently one of 
the best performing large departments.
March 
March 
March 
2013
2014
2015
Off-payroll (includes temporary and consultancy) staff 
We use off-payroll temporary and consultancy staff where it is necessary and 
prudent to do so. This year we spent £10.7 million on consultancy compared to 
£13.2 million last year. We also spent £41.6 million on temporary staff compared to 
£25.2 million last year. Our spending on consultancy remains closely aligned to the 
challenges we face with delivering significant welfare reforms. This year’s increase 
in temporary staff spend was to support the delivery of policies such as Personal 
Independence Payment, pension reforms and child maintenance reforms. We also 
took on temporary staff to backfill vacancies in our benefit centres and contact 
centres as permanent staff transferred to support the expansion of the Universal 
Credit programme.
Consultancy (£ million)
2012-13
2013-14
2014-15
Core department
10.6
11.7
10.5
Arm’s length bodies (consolidated)
3.4
1.5
0.2
Departmental group
14 .0
13 .2
10 .7
Temporary Staff (£ million)
2012-13
2013-14
2014-15
Core department
34.9
21.7
38.7
Arm’s length bodies (consolidated)
4.1
3.5
2.9
Departmental group
39 .0
25 .2
41 .6
At 31 March 2015, we had 264 whole-time equivalent off-payroll staff working for 
us. The number of off-payroll staff and their costs fluctuated throughout the year as 
we took on people to help us with specific activities, including IT, Universal Credit and 
other digital projects.
Departmental group whole-time equivalent staffing (Core table 5)1
31 March 
31 March 
31 March 
31 March 
Off-payroll staff WTE
2012
2013
2014
2015
Core department
81
121
85
226
Arm’s length bodies
103
49
37
38
Departmental group
184
170
122
264
1.   The numbers for previous years have been restated to include only those arm’s length bodies that are 
included in our accounting boundary as per Cabinet Office guidance.
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Tax arrangements for off-payroll staff
HM Treasury guidance means we have to seek assurance of the tax arrangements 
of some of our off-payroll staff who receive more than £220 per day. In 2014-15, 
HM Treasury conducted a review to check that all departments were doing this. The 
review found we had followed the guidance but had under-reported the position 
in our Annual Report and Accounts for 2013-14. We issued an amendment in our 
mid-year report to Parliament in December 2014. Our position for 2014-15 is shown 
in the following tables and includes the figures for the core department and those 
arm’s length bodies within our accounting boundary.
Table 1: Off-payroll engagements as at 31 March 2015, that were paid more than 
£220 a day and had lasted longer than 6 months
Core 
Arm’s  Departmental 
department length bodies
group
Total number of existing 
engagements as of 31 March 
2015
236
12
248
of which:
Number that have existed for less 
than a year at time of reporting
185
11
196
Number that have existed 
between 1 and 2 years at time of 
reporting
51
1
52
We did not have any off-payroll engagements over 2 years at time of reporting.
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Table 2: All off-payroll engagements that were new or reached a length of 6 
months between 1 April 2014 and 31 March 2015, where they were paid more 
than £220 a day
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Core 
Arm’s  Departmental 
department length bodies
group
Total number of engagements 
that were new or reached a 
length of 6 months between 1 
April 2014 and 31 March 2015
161
27
188
Number which include contractual 
clauses giving us the right to 
request assurance about income 
tax and National Insurance 
obligations
1601
122
172
Number for which we’ve 
requested assurance*
161
103
171
of which:
Number for which we’ve received 
assurance 
147
9
156
Number for which we’ve not 
received assurance 
144
1
15
Number whose jobs we’ve ended 
as a result of a lack of assurance 
1
15
2
*Includes engagements that didn’t have the required clause but we sought assurance anyway.
Table 3: Board members and senior officials with significant financial 
responsibility between 1 April 2014 and 31 March 2015
Core 
Arm’s  Departmental 
department length bodies
group
Total
81
17
98
Number of individuals on-payroll 
who have been deemed board 
members or senior officials with 
significant financial responsibility 
81
17
98
We don’t have any individuals off-payroll who have been deemed board members 
or senior officials with significant financial responsibility.
1.   One engagement didn’t have the required clause but we assured their tax arrangements. We’ve 
reviewed our arrangements with suppliers to ensure this scenario does not happen again.
2.   Of the 27 engagements, 14 were secondments and we agreed with their employers that the employer 
would pay their tax and National Insurance obligations. One engagement did not have a clause but we
sought assurance. This was not received so we terminated this engagement on 2 April 2015. Following
the 2014-15 HM Treasury review we now seek assurance for every contract from 1 April 2015 at the 
outset.
3.   We didn’t request assurance for 3 engagements due to the initial contracts being shorter than 6 
months but subsequently extended. The contracts for all 3 have now ended.
4.   This includes 2 engagements who have given us assurance of compliance but we are still awaiting their
returns in order to clear their cases as at 19 June 2015. We terminated 1 contract and 11 left before 
we reviewed our processes following the 2014-15 HM Treasury review of tax arrangements.
5.  This contract was terminated on 2 April 2015.
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External audit 
These accounts have been audited by the Comptroller and Auditor General in 
accordance with the Government Resources and Accounts Act 2000. His report and 
certificate can be found later in this report.
The total cost of audit work was £2.0 million (£2.4 million in 2013-14). This includes 
cash fees of £0.2 million (£0.3 million in 2013-14 (see notes 4 and 5)) and notional 
fees of £1.8 million (£2.1 million in 2013-14 (see note 4)). 
In 2014-15, the National Audit Office completed and published 5 value-for-money 
studies that were relevant to us:

‘The Disposal of the Remploy Businesses’ (April 2014)

‘Child Maintenance 2012 Scheme: Early Progress’ (June 2014)

‘The Work Programme’ (July 2014)

‘Housing Benefit Fraud and Error’ (October 2014)

‘Universal Credit: Progress Update’ (November 2014)
As at 31 March 2015, two more studies were still under way:

‘Welfare Reform Lessons Learned’ (formerly called ‘Implementation of
Transformation Programmes’ and ‘Implementing Welfare Reform’)

‘Fraud and Error Stocktake’
Robert Devereux
Permanent Secretary
10 July 2015
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Remuneration report
(This information is audited by the Comptroller and Auditor General)
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Ministers’ pay
2014-15
2013-14
Full year 
Pension 
Full year 
Pension 
Salary equivalent
benefits
Total
Salary equivalent
benefits
Total
Minister and 
to nearest  to nearest 
to nearest  to nearest 
date appointed
£
£
£1,0001
£1,0002
£
£
£1,000
£1,000
Rt Hon Iain Duncan Smith MP
67,505
67,505
22,000
89,000
68,169
68,169
23,000
92,000
Appointed 12 May 2010
Lord Freud3 
-
-
-
-
-
-
-
-
Appointed 14 May 2010
Steve Webb MP
31,680
31,680
8,000
39,000
32,344
32,344
8,000
41,000
Appointed 13 May 2010
Rt Hon Esther McVey MP
31,680
31,680
11,000
43,000
27,541
27,541
12,000
40,000
Appointed 5 September 2012
Rt Hon Mike Penning MP4
10,560
31,680
4,000
14,000
13,477
32,344
5,000
19,000
Appointed 7 October 2013  
Left 14 July 2014
Mark Harper MP
22,568
31,680
8,000
30,000
-
-
-
-
Appointed 15 July 2014 
Our ministers have not received any benefits in kind.
Government departments bear only the cost of the additional ministerial salary. 
Salaries for services as MPs (£67,060 from April 2014) and other allowances are 
borne centrally. 
Non-executive directors’ fees 
Fees 2014-15
Fees 2013-14
to the nearest £1,000
to the nearest £1,000
Sir Ian Cheshire
Honorarium of 20,000 waived
Honorarium of 20,000 waived
(left 10 November 2014)
Dame Clara Furse DBE
Honorarium of 20,000 waived
Honorarium of 20,000 waived
David Lister
4,000
Honorarium of 15,000 waived
Lynne Turner5
15,000
15,000
Martin Hagen5
15,000
-
Willy Roe
17,000
18,000
(left 30 May 2015)
Sir Robert Walmsley6
15,000
10,000
Lt Gen (retd) Andrew Graham CB CBE
1,000
-
Total
67,000
43,000
1.   To calculate the value of pension benefits accrued during the year, we first take the real increase in 
pension and multiply it by 20. Then we subtract the contributions made by the individual. The real
increase excludes increases due to inflation or any increase or decrease due to a transfer of pension
rights.
2.   Totals may not sum due to rounding on pension and totals columns.
3.   Lord Freud did not receive any salary.
4.   The Rt Hon Mike Penning MP left our department on 14 July 2014.
5.   Departmental Audit and Risk Assurance Committee member.
6.   Chair of the Universal Credit Programme Board.
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We now disclose all non-executive directors’ fees irrespective of which board they sit 
on. In previous years we disclosed fees only for departmental board non-executive 
directors.
Executive directors’ pay
2014-15
2013-14
Bonus 
Pension 
Bonus 
Pension 
Executive Director 
Salary
payments
benefits
Total
Salary
payment
benefits
Total
and date appointed
£000
£000
£000
£000
£000
£000
£000
£000
Robert Devereux
180-185
-
-
180-185
180-185
-
-
180-185
Appointed 1 January 2011
Mike Driver
140-145
15-20
132
285-290
130-135
10-15
185
325-330
Appointed 3 September 2012
Noel Shanahan
190-195
15-20
45
250-255
170-175
15-20
35
225-230
Appointed 8 October 2012
Mayank Prakash
70-75 (FYE 
-
27
100-105
-
-
-
-
Appointed 17 November 2014
195-200)
Andrew Nelson
55-60 (FYE 
-
20
75-80
180-185
-
661
250-255
Appointed 25 February 2013
175-180)
Left 10 July 2014
Steve Riley
50-55 (FYE 
-
51
105-110
-
-
-
-
Appointed 7 July 2014
110-115)
Left 31 December 2014
Neil Couling
55-60 (FYE 
-
58
110-115
-
-
-
-
Appointed 1 October 2014
110-115)
Howard Shiplee
95-100 (FYE 
-
38
135-140
170-175
-
631
235-240
Appointed 13 May 2013
195-200)
Left 30 September 2014
Debbie Alder
125-130
-
47
170-175
30-35 (FYE 
-
121
40-45
Appointed 1 January 2014
125-130)
Jeremy Moore
115-120
-
130
245-250
55-60 (FYE 
-
401
95-100
Appointed 27 January 2014
110-115)
Kevin Cunnington
150-155
-
56
205-210
65-70 (FYE 
-
261
95-100
Appointed 14 October 2013 
150-155)
(due to leave 13 October 
2015)
Claire Johnston (appointed 12 January 2015) is director general of legal services and our senior legal adviser. Our legal services are provided 
by the Government Legal Department and as a result her remuneration is disclosed in the annual report and accounts of the Government 
Legal Department.
A benefit in kind of £400 (rounded to nearest £100) was paid to Steve Riley. No other executives received a benefit in kind.
Appointment of directors
Civil service appointments are made in accordance with the Civil Service 
Commissioner’s Recruitment Principles. These principles require appointments to be 
made on merit and on the basis of fair and open competition. However, there may 
be exceptions to this principle.
Unless stated otherwise in the tables above, all appointments are open-ended. 
Early termination, other than for misconduct, would result in the individual receiving 
compensation as set out in the Civil Service Compensation Scheme. 
1.   We’ve restated this as several factors weren’t included in the original calculation.
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Executive directors’ pay
The pay of most senior civil servants is set by the Prime Minister following 
independent advice from the Senior Salaries Review Body. Further information about 
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ols
the work of the review body can be found at www.gov.uk. This body also advises the 
Prime Minister on peers’ allowances; the pay, pensions and allowances of MPs and 
others whose pay is determined by the Ministerial and Other Salaries Act 1975.
Salaries are solely for the period in the year when an individual served as a member 
of our executive team. Salaries include:

gross salary

overtime

reserved rights to London weighting or London allowances

recruitment and retention allowances

private office allowances

any other allowances and contracted expenses to the extent that they are
subject to UK taxation
Benefits in kind
The monetary value of benefits in kind covers any benefits provided by the 
department and treated by HM Revenue and Customs as a taxable emolument. 
Elements of the remuneration package which are not cash are classified as benefits 
in kind.
Bonuses
Bonuses are non-consolidated variable performance related payments awarded to 
the highest performing senior civil servants at the end of the year. 
Conflict of interest
None of our ministers or executive directors held directorships which conflicted with 
their management responsibilities during 2014-15.
Executive director pay compared to staff median 
The pay band of our highest-paid executive director during 2014-15 was £195,000 to 
£200,000. This was 8.9 times the median pay of the workforce, which was £22,194. 
The ratio shows a small decrease from 2013-14, and this can be attributed to a slight 
increase in the lowest pay scale. 
Pay band of highest paid 
executive director
Median total pay
Ratio
2014-15
£195,000-£200,000
£22,194
1:8.90
2013-14
£195,000-£200,000
£21,974
1:8.99
In 2013-14 and 2014-15 no employee was paid more than the highest-paid 
director. Pay ranged from £15,000-£15,500 (2013-14: £14,500-£15,000) to 
£195,000-£200,000 (2013-14: £195,000-£200,000). Total pay includes salary, 
non-consolidated performance-related pay and benefits in kind. It does not include 
severance payments, employer pension contributions and the cash equivalent 
transfer value of pensions. 
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Ministers’ and executive directors’ pensions 
Total accrued 
pension at age 65 
Cash equivalent 
Real increase in 
as at 31 March 
Real increase in  transfer value at 31 
Cash equivalent 
cash equivalent 
2015
pension at age 65
March 2015  transfer value at 31 
transfer value 
Ministers
£000
£000
£000
March 2014 £000
£000
Rt Hon Iain Duncan Smith MP
10-15
0-2.5
215
180
17
Lord Freud
-
-
-
-
-
Steve Webb MP
0-5
0-2.5
37
29
4
Rt Hon Esther McVey MP
0-5
0-2.5
23
13
4
Rt Hon Mike Penning MP1
0-5
0-2.5
48
44
2
Mark Harper MP
0-5
0-2.5
38
31
3
Where a minister left our department part way through the year the cash equivalent transfer value column refers to the date of leaving.
Real increase 
Accrued pension at 
in pension and 
Real increase in 
pension age as at 
related lump sum 
Cash equivalent 
Cash equivalent 
cash equivalent 
31 March 2015
at pension age transfer value at 31  transfer value at 31 
transfer value 
Executive directors
£000
£000
March 2015 £000
March 2014 £000
£000
Robert Devereux2
75-80 plus 
0-2.5 plus 
1,727
1,633
25
235-240 lump sum
2.5-5 lump sum
Mike Driver
60-65 plus
5-7.5 plus 
1,185
1,026
106
185-190 lump sum
17.5-20 lump sum
Noel Shanahan
25-30
2.5-5
419
356
35
Mayank Prakash
0-5
0-2.5
16
-
9
Andrew Nelson
5-10
0-2.5
76
593
13
(left 10 July 2014)
Steve Riley
50-55 plus
0-2.5 plus
1,142
1,086
49
(left 31 December 2014)
155-160 lump sum
5-7.5 lump sum
Neil Couling
35-40 plus
2.5-5 plus
681
612
44
110-115 lump sum
7.5-10 lump sum
Howard Shiplee CBE
5-10
0-2.5
107
673
30
(left 30 September 2014)
Debbie Alder
10-15
2.5-5
155
116
22
Jeremy Moore
50-55 plus
5-7.5 plus 
1,137
965
123
155-160 lump sum
17.5-20 lump sum
Kevin Cunnington
5-10
2.5-5
79
203
32
Where an executive director left our department part way through the year the cash equivalent transfer value column refers to the value at 
the date of leaving.
None of the above opted to open a Partnership pension account.
Ministerial pensions 
Pension benefits for ministers are provided by the Parliamentary Contributory 
Pension Fund (PCPF). This scheme is made under statute (the regulations are set out 
in Statutory Instrument SI 1993 No 3253, as amended). 
Ministers who are MPs may also accrue an MP’s pension under the PCPF (we haven’t 
included details in this report). The accrual rate has been 1/40 since 15 July 2002 (or 
5 July 2001 for those who chose to backdate the change), but ministers, like all other 
1.   The Rt Hon Mike Penning MP left our department on 14 July 2014.
2.   Robert Devereux opted out of PCSPS from 31 March 2012. He has voluntarily agreed to the disclosure 
of his preserved pension figures, for which the latest estimates are shown above. The real increase
columns reflect the cost of living increases (adjusted for inflation) applied each year until his pension
comes into payment.
3.   We’ve restated this as several factors weren’t included in the original calculation.
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members of the PCPF, can opt for a 1/50 accrual rate and a lower rate of member 
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contribution. An additional 1/60 accrual rate option (backdated to 1 April 2008) was 
introduced from 1 January 2010. 
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Benefits for ministers are payable at the same time that MPs’ benefits become 
payable under the PCPF or, for those who are not MPs, on retirement from ministerial 
office from age 65. Pensions are revalued each year in line with Pensions Increase 
legislation. From 1 April 2014 members paid contributions between 8.4% and 17.9% 
depending on their level of seniority and chosen accrual rate. 
The accrued pension quoted is the pension the minister is entitled to receive when 
they reach 65, or as soon as they cease to be an active member of the scheme if 
they are already 65. 
In line with reforms to other public service pensions, there are plans to reform 
the Ministerial Pension Scheme in 2015. The new scheme will be a career average 
pension scheme, have an accrual rate of 1.775%, revaluation based on change in 
prices, a normal pension age equal to State Pension age and a member contribution 
of 11.1%. 
Executive directors’ pensions 
Pension benefits are provided through the Civil Service Pensions1 arrangements. From 
30 July 2007, civil servants may be in 1 of 4 defined benefit schemes: either a final 
salary scheme (classic, premium or classic plus), or a whole career scheme (nuvos). 
These statutory arrangements are unfunded, with the cost of benefits met by money 
voted by Parliament each year. Pensions payable under classicpremiumclassic 
plus and nuvos are increased annually in line with Pensions Increase legislation. 
Members joining from October 2002 may opt for either the appropriate defined 
benefit arrangement or a “money purchase” stakeholder pension with an employer 
contribution (called a partnership pension account). 
Employee contributions are salary-related and range between 1.5% and 6.25% of 
pensionable earnings for classic and 3.55% and 8.25% for premiumclassic plus 
and nuvos
Benefits in classic accrue at the rate of 1/80 of final pensionable earnings for each 
year of service. In addition, a lump sum equivalent to 3 years’ initial pension is 
payable on retirement. 
For premium, benefits accrue at the rate of 1/60 of final pensionable earnings for 
each year of service. Unlike classic, there is no automatic lump sum. 
Classic plus is a hybrid with benefits for service before 1 October 2002 calculated 
broadly as per classic and benefits for service from October 2002 worked out as in 
premium
In nuvos a member builds up a pension based on pensionable earnings during 
their period of scheme membership. At the end of the scheme year (31 March) 
the member’s earned pension account is credited with 2.3% of their pensionable 
earnings in that scheme year. The accrued pension is uprated in line with Pensions 
Increase legislation. 
Members of all 4 schemes may opt to give up (commute) their pension in exchange 
for a lump sum up to the limits set by the Finance Act 2004.
1.   Further details about the Civil Service pension arrangements can be found at:
www.civilservicepensionscheme.org.uk
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The partnership pension account is a stakeholder pension arrangement. The 
employer makes a basic contribution of between 3% and 12.5% (depending on the 
age of the member) into a stakeholder pension product chosen by the employee 
from a panel of 3 providers. The employee does not have to contribute, but where 
they do make contributions, the employer will match these up to a limit of 3% of 
pensionable salary (in addition to the employer’s basic contribution). Employers 
also contribute a further 0.8% of pensionable salary to cover the cost of centrally 
provided risk benefit cover (death in service and ill health retirement). 
The accrued pension quoted is the pension the member is entitled to receive when 
they reach pension age, or as soon as they stop being an active member of the 
scheme if they are already at or over pension age. Pension age is 60 for members of 
classicpremium and classic plus and 65 for members of nuvos
Cash equivalent transfer value (CETV) – ministers and executive 
directors
This is the actuarially assessed capitalised value of the pension scheme benefits 
accrued by a member at a particular point in time. The benefits valued are the 
member’s accrued benefits and any contingent spouse’s pension payable from the 
scheme. 
A CETV is a payment made by a pension scheme or arrangement to secure pension 
benefits in another pension scheme or arrangement. It can be made when a 
member leaves a scheme and chooses to transfer the pension benefits they have 
accrued in their former scheme. 
The pension figures shown relate to the benefits the individual has accrued from 
their total service. For ministers that’s all their time as a minister, not just their 
current employment. For executive directors, that’s all the time they’ve been a 
member of that pension scheme, not just the time they were in a senior role.
CETVs are calculated in accordance with the Occupational Pension Schemes (Transfer 
Values) (Amendment) Regulations 2008. They don’t take account of any actual or 
potential reduction to benefits resulting from lifetime allowance tax which may be 
due when pension benefits are taken.
Real increase in the value of the CETV 
This is the element of the increase in accrued pension funded by the Exchequer 
for ministers and by the employer for executive directors. It excludes increases in 
accrued pension due to inflation and contributions paid by the minister or employee. 
It is worked out using common market valuation factors for the start and end of the 
period. 
Robert Devereux
Accounting Officer
10 July 2015
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Statement of Accounting Officer’s 
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responsibilities 
Under the Government Resources and Accounts Act 2000 (the GRAA), I have 
been directed by HM Treasury to prepare consolidated resource accounts for 
the Department for Work and Pensions, for each financial year. These detail the 
resources acquired, held, used or disposed of during the year by the departmental 
group. This group consists of the department itself and our sponsored arm’s length 
bodies, as listed in ‘Our controls’ on page 57. The arm’s length bodies are designated 
by order made under the GRAA by Statutory Instrument 2013 number 488.
The accounts are prepared on an accruals basis and must give a true and fair view of 
the state of affairs of the departmental group. This should include the departmental 
group’s net resource outturn, application of resources, changes in taxpayers’ equity 
and cash flows for the financial year.
In preparing the accounts I am, as Permanent Secretary and Accounting Officer, 
required to comply with the requirements of the Government Financial Reporting 
Manual (FReM). In particular, I must:

observe the Accounts Direction issued by the Treasury, including the relevant
accounting and disclosure requirements, and apply suitable accounting policies
on a consistent basis

ensure that we have in place appropriate and reliable systems and procedures to
carry out the consolidation process

make judgements and estimates on a reasonable basis, including those
judgements involved in consolidating the accounting information provided by
our arm’s length bodies

state whether applicable accounting standards, as set out in the FReM, have
been followed, and disclose and explain any material departures in the accounts

prepare the accounts on a going-concern basis
HM Treasury has appointed me as the Accounting Officer of the Department for 
Work and Pensions. I have also appointed the chief executives of our sponsored and 
other arm’s length bodies as accounting officers of those bodies. I am responsible 
for ensuring that appropriate systems and controls are in place to ensure that any 
grants that we make to our sponsored bodies are applied for the purposes intended. 
I must also make sure such expenditure, and the other income and expenditure of 
the sponsored bodies, is properly accounted for, for the purposes of consolidation 
within the resource accounts. Under their terms of appointment, the accounting 
officers of the sponsored bodies are accountable for the use, including the regularity 
and propriety, of the grants received and the other income and expenditure of the 
sponsored bodies.
The responsibilities of an accounting officer are set out in ‘Managing Public Money’, 
published by HM Treasury. These include responsibility for the propriety and 
regularity of the public finances for which the accounting officer is answerable, 
and responsibility for keeping proper records and for safeguarding the assets of the 
department or arm’s length body for which the accounting officer is responsible.
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Governance statement
My overview shows the breadth and complexity of what we do, and how we use our 
control frameworks to ensure we work effectively. 
This governance statement describes the system of control, reviews the assurances 
the system has provided, and explains our critical control issues. It has been 
endorsed by the departmental board in July. 
Governance framework
We are governed by a system of three complementary responsibilities:

the Secretary of State’s overall responsibility for the department

my responsibility, both to the Secretary of State and directly to Parliament, as the
Principal Accounting Officer for my department’s expenditure and management

the departmental board’s collective responsibility for advising us on strategic
and operational issues, and for scrutinising and challenging our policies and
performance
Our governance framework is described in ‘How we were structured in 2014-15’. 
The system of control comprises the role and responsibilities of the departmental 
board and its committees, my role as the Principal Accounting Officer, and by 
delegation, my executive team and our arm’s length bodies. It includes the control 
framework we have created, which is supported by internal and external assurance. 
There were no ministerial directions in 2014-15.
Departmental board
The Secretary of State chairs the board which comprises his ministerial team, our 
non-executive directors, me and three members of my executive team (the directors 
general for operations, finance and technology). The board met 4 times in 2014-15. 
The board has 2 sub-committees: the Departmental Audit and Risk Assurance 
Committee and the Nominations Committee. It delegates work to these committees 
so that smaller groups of board members can examine issues in closer detail 
alongside other executives and non-executive directors. The committees then 
present their findings to the board for discussion and conclusion (as described in 
‘Corporate Governance in Central Government Departments: Code of Good Practice’). 
The responsibilities and attendance of the board are described in ‘How we were 
structured in 2014-15’. 
In 2014-15 the board focused on:

reviewing our key change programmes

reviewing the challenges for financial planning arising from the welfare cap

reviewing the implications of elements of Scottish devolution for the department
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considering our commercial and IT capability and staff engagement as key
Our con
factors underpinning the success of our reform programme
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The board’s review of its own effectiveness found that it continues to operate well. It 
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also found that our non-executive members have used their expertise to support and 
challenge delivery. For example: 

Sir Ian Cheshire has supported the building of our financial capability and
developing talent management

Dame Clara Furse DBE tested and supported the commercial procurement
process for a major new contract

David Lister helped us develop our digital and technology capability, in particular
with the recruitment and induction of senior posts
The ‘Lead non-executive director’s report’ contains more detail of the board’s work. 
As required under the ‘comply or explain’ approach, the board is satisfied that we 
have complied with the provisions in ‘Corporate Governance in Central Government 
Departments: Code of Good Practice’.
Departmental Audit and Risk Assurance Committee
The Departmental Audit and Risk Assurance Committee gives me an independent 
view of the adequacy, effectiveness and value for money of our governance, risk, 
control and associated assurance processes. The committee met 4 times during 
2014-15, and focused on reviewing regular updates on our significant control issues.
In November 2014 the committee closed its sub-committee. This sub-committee 
had provided updates on the Social Fund White Paper Account and the Child 
Maintenance Client Funds Account. The controls around these accounts will now 
be considered by the committee as a whole, which has increased its number of 
meetings to cover the work.
This year’s effectiveness review of the committee focused on its role, scope and 
support. It once again found the committee to be effective and well supported. 
Nominations Committee
Nominations Committee members advise on identifying and developing leadership 
and high potential. They also scrutinise our incentive structure and succession 
planning. The committee met once this year and considered senior appointments, 
workforce planning, talent management and succession planning. A further planned 
meeting of the committee was postponed to July 2015.
Financial and business interests of our non-executive directors and 
ministers 
Senior management remuneration is disclosed in the remuneration report. We also 
keep a register of our non-executive and ministerial board members’ interests. This 
contains details of company directorships and other significant interests held by 
those members. None of our ministers or senior managers held directorships which 
conflicted with their management responsibilities in 2014-15. 
Copies of the register are available on request. We also lay them in the House of 
Commons library and you can view them online.1
1.   www.publications.parliament.uk
www.parliament.uk
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Our executive team 
As Permanent Secretary, I am responsible for the executive management of the 
core department. As the Accounting Officer, I am responsible for maintaining 
a sound system of internal control that helps us achieve our policies, aims and 
objectives, while safeguarding public funds and our assets, for which I am personally 
responsible. The full responsibilities of accounting officers are listed in ‘Managing 
Public Money’. 
I am supported by a team of directors general and, together with a legal 
representative (employed and paid by the Government Legal Service) we collectively 
form the executive team. Our individual accountabilities for 2014-15 are described in 
‘How we were structured in 2014-15’.
The executive team collectively agrees the framework of responsibilities, plans and 
resources that will deliver our agenda. We also make sure our culture supports that 
agenda, and are responsible for challenging and approving investment plans.
A major part of our work is managing risk. To do this we have agreed a risk 
management framework (compatible with the international risk management 
standard ISO31000) and we hold a weekly discussion of individual members’ highest 
priority risks and concerns. The discussion looks at where additional controls are 
needed and agrees actions to take, such as on our capability and capacity. It also 
assesses the risks in our major change programmes. Another way we monitor 
and manage our risk profile is through monthly in-depth discussions of our most 
significant risks, as well as reviewing our risk management processes to ensure they 
remain proportionate and useful.
Members of the executive team have delegated financial authority appropriate to 
their responsibilities, business and personal objectives. I have delegated authority 
to them to manage risks in their business areas. They also escalate risks where they 
affect other businesses, or where a collective decision is needed on a risk that affects 
the responsibilities or objectives of others. 
Meeting support
Individual departmental board or sub-committee members will sponsor discussion 
papers for each item brought to the meeting. This helps to ensure they are of 
a similar quality and support focused discussion on key issues. Financial and 
performance data is extracted from corporate accounting and operational systems. 
This means it is subject to regular, planned internal quality assurance checks, 
independent audits and proportionate external assurance (such as from the National 
Audit Office). No concerns have been raised about the quality of information received 
by the board or its sub-committees in 2014-15.
Accountability System Statement
My Accountability System Statement (available from www.gov.uk) explains how 
we meet our responsibilities for funding streams provided to local authorities and 
other local bodies outside our direct control, where they aren’t governed directly by 
contractual arrangements. It records that there is a generally robust framework for 
each of the funding streams.
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Risk management, control and assurance
This year, especially within our major change programmes, we clarified and 
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strengthened the way we manage risks, ensure compliance and enable assurance in 
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line with the ‘three lines of defence’ approach. 
Three lines of defence
Governing body/board/audit committee
Major P
National Audit Office
Senior management
rojec
ts Authority
First line of defence
Second line of defence
Third line of defence
Management 
Internal 
control
control
Functional experts
Internal audit
measures
The first line includes our operational and change managers, who identify, assess, 
manage and take responsibility for risks. In the second line, functional experts 
operate across the department to set the boundaries for delivery by defining policies, 
procedures and guidance. They also support management in identifying and 
controlling risks. The third line is our internal auditors. They provide an independent, 
objective assurance on the adequacy and effectiveness of governance, risk 
management and control.
After consulting programme senior responsible owners and second line functional 
experts, we have agreed and communicated revised responsibilities to support 
the management of risks and the success of change programme delivery. This 
included revising each programme board’s terms of reference, including their 
membership. Senior responsible owners’ accountabilities have also been updated 
to take account of changes to the Osmotherly rules (which govern our interactions 
with parliamentary select committees). New official appointment letters have been 
issued jointly by me and the chief executive of the Major Projects Authority. These 
were published in March 2015 and are available through www.gov.uk.
We continue to review both our risk management framework and the management 
of risks across the department. We also continue to improve alignment of risk 
controls through performance discussions with directors general and within our 
major programmes. Our risk management team is enabling our staff to better 
understand and manage risks, for example through training sessions on having 
the right risk conversations (attended by more than 1,400 staff). Our improved 
collaboration and use of best practice risk management guidance and tools supports 
better decision-making across all business areas.
Change Portfolio management
The executive team manages the Change Portfolio and advises ministers on 
the department’s vision and strategy for delivering ministerial objectives. A sub-
committee tracks progress, enables financial drawdowns, and reviews programme 
and project delivery.
In November, I established a series of stocktakes for those of our programmes 
on the government’s Major Projects Portfolio. This involves me, my finance and 
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business transformation directors general and the senior responsible owner of each 
programme. These stocktakes provide further assurance that each programme is 
supported by realistic and achievable plans, and that these plans use resources 
affordably and sustainably within agreed limits. They also ensure that each senior 
responsible owner understands the issues, risks and dependencies associated with 
delivering their programme. 
External bodies, including the National Audit Office and the Major Projects 
Authority, continue to give us independent external assurance on major projects 
and programmes. The Major Projects Authority conducted 21 reviews of 11 of our 
projects in 2014-15. These complement internal and other external assurance 
activity. Their delivery confidence ratings reflect our continuing delivery of significant 
and complex business transformation projects, often enabled by digital technology, 
and delivered in phases frequently spanning several years. In addition to the Major 
Project Authority reviews, we carried out internal gateway reviews of high and 
medium-risk rated projects.
The Major Projects Authority conducted final reviews on three projects which were 
successfully removed from the Government Major Projects Portfolio. These reviews, 
coupled with lessons learned from internal and external assurance providers and 
parliamentary select committee hearings, have given us a better understanding 
of the relationship between assurance interventions, risk management, and the 
projects and associated benefits we deliver. 
In agreement with the Major Projects Authority we have improved our post-project 
reviews. By doing this and ensuring we achieve more of our programmes’ benefits, 
we have reduced the need for the Major Projects Authority to conduct final gateway 
reviews on our projects.
Security
Departmental security is overseen by the senior information risk owner (SIRO), who 
chairs the Departmental Security Oversight Board. Three teams manage security 
planning and capabilities for our information, people, and premises. This includes:

providing protective security policy, strategy, guidance and assurance

assessing and monitoring threats and vulnerabilities

developing IT security architecture and protective monitoring

fixing IT security issues

assessing the risks of new or changed systems, applications and services

giving operational support and advice to all parts of our business – including
managing the response to data or other security breaches
The SIRO is accountable for our information risk management. He is supported by 
the departmental security officer (who is also the deputy SIRO), and a network of 
business SIROs and support teams. Each business SIRO is accountable in their part 
of the business. They escalate decisions on assessments of information and other 
security risks to the SIRO, and disseminate our response as required.
The 2013-14 Information Assurance Maturity Model assessment identified that we 
should focus on information risk management and compliance, while maintaining 
effort on other areas such as leadership, security governance and through-year 
reporting.  
We have made good progress in strengthening governance and leadership, and 
in improving assured information sharing and training, education and awareness. 
The review of programme boards and strengthened senior responsible owner 
accountabilities has also begun to remove barriers to consistent information risk 
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management. This improvement has been championed by the SIRO and supported 
Our con
by the network of business SIROs, as well as by new strategic products introduced 
this year. We have established a separate compliance team that has started working 
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on a new compliance framework and regime. 
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Information security vulnerability is a problem for every organisation that uses 
technology, but it’s another area where we are making progress. A mid-year 
assessment helped us target areas that needed additional attention in the second 
half of the year. These included assessing vulnerabilities, protective monitoring, and 
privileged user access controls. At the same time we are improving our approach to 
user education to make sure everyone is clear about their personal responsibility for 
using and protecting information, and to support a change in our culture. 
Personal data incidents
In 2014-15 two personal data incidents were formally reported to the Information 
Commissioner’s Office. One involved the unauthorised disclosure of paper 
documents containing the name, address, National Insurance number and contact 
details of 1,100 people. Everyone affected was notified in writing. The second 
incident involved the loss of paper documents from outside secure government 
premises. There was no need to notify those affected as the documents were 
recovered soon after the loss occurred. 
In each case, we put in place further controls to reduce the risk of future incidents 
of this type. In both instances the Information Commissioner was satisfied with our 
response and took no action. 
There were no personal data incidents that were recorded centrally that we didn’t 
tell the Information Commissioner’s Office about. 
We continuously monitor and assess our information risks to address weaknesses 
and create new capabilities. We are upgrading our technology infrastructure, and 
this will further reduce the risks from electronic storage, though it will require 
prudent management.
Service providers
As a department we have long taken a lead in the wider government shared 
services agenda by providing shared financial and HR services for other government 
departments. We also took a lead role in setting up government joint ventures 
(Shared Services Connected Ltd and MyCSP) to deliver accounting and employee 
services, staff pension administration, and invoice processing. We continue to 
monitor these arrangements through contractual relationships managed by the 
Cabinet Office. 
We supported Pension Wise before its launch in April 2015. This support came 
from one of our arm’s length bodies - The Pensions Advisory Service – which has a 
contract with HM Treasury to provide guidance on defined contribution pensions. 
Analytical models
An improved quality assurance framework, covering our business-critical analytical 
models, was agreed last year. It has now been tested and deployed. Lead analysts 
are now accountable for the quality of the models in their area, and we are providing 
further best practice guidance and training to all staff developing models. 
We have updated our list of business-critical analytical models and we are 
conducting an in-depth audit to ensure appropriate quality assurance for each 
model’s level of risk and impact. This has already been completed for the Finance 
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Group’s models. The cross-departmental working group on quality assurance has 
developed the Analytical Quality Assurance (Aqua) Book. This was published in March 
2015 to provide guidance on producing quality analysis for government.
Letters of assurance
At the end of the year, each director general writes me a letter of assurance 
reporting on the effectiveness of the controls that support their business activities 
and delivery of policies. 
Assurances in the department
Directors general have identified a number of issues this year which they are 
currently managing within their teams. These include:
•  annually managed expenditure – as this can be affected by economic changes 
we maintain robust forecasts to ensure that it remains within the agreed welfare 
cap – Strategy, Policy and Analysis Group
•  management and oversight of the contracts supporting the European Social 
Fund 2014-2020 programme – Finance Group
•  planning for effective management of the parts of the Smith Report for Scottish 
devolution that are relevant to the department. We have introduced a Scotland 
Bill, and there is significant work underway to deliver the powers to Scotland that 
the bill sets out. This work will be led by the new Devolution Programme working 
closely with the Scotland Office
The finance director general also highlighted the actions taken to improve our 
financial controls. These include creating a new Financial Assurance and Control 
Team. The team has developed a roles and responsibilities matrix for financial 
controls, strengthened the letters of budget delegation to directors general, and 
ensured (through a finance budget licence) that our senior civil servants fully 
understand our financial framework and their financial control responsibilities. A 
new contract management framework has established clearer accountability for 
contracts, with senior responsible owners and senior contract owners for all our 
highest priority contracts. Over time we will extend this to all contracts.
Assurances covering arm’s length bodies
The strategy, policy and analysis director general provides similar assurances over 
governance and control arrangements in our 12 arm’s length bodies which deliver 
outcomes on our behalf. 
The Office for Nuclear Regulation was established as a statutory public corporation 
on 1 April 2014 under the Energy Act 2013. Its aim is to provide efficient and 
effective regulation of the nuclear industry, holding it to account on behalf of the 
public. This year it reported a control weakness around a lack of transparency over 
some types of expenditure and a failure to seek appropriate authorisations. I have 
accepted assurance that these limitations have now largely been mitigated and that 
it will continue to improve its internal controls. 
In a change to our arm’s length bodies from April 2015, Remploy Employment 
Services has been established as a new company, free from government control. It is 
now in partnership with Maximus following a successful commercial process. Current 
Remploy employees and contracts are now being transferred to the new company. 
Once this is complete, we will work with the current Remploy board to manage the 
activities we have retained. From April 2015 these have been managed by a new 
arm’s length body called the Disabled People’s Employment Corporation (GB) Ltd. 
This operates as a non-trading company.
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Internal audit
The head of internal audit provides independent assurance to me and the 
departmental board (via the Departmental Audit and Risk Assurance Committee). A 
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recent external quality assessment of the internal audit service by KPMG reflected 
that it achieved the desired impact on governance, risk and control, and compared 
favourably with benchmarks from their recent reviews in central government. We 
make sure that as far as possible our internal and external assurance providers work 
closely and minimise duplication of work. 
In the opinion of the head of internal audit, the governance, risk management and 
control arrangements throughout the year have provided a ‘moderate assurance’. 
This is based on the consolidated findings and recommendations from reviews in 
2014-15, and the cumulative audit knowledge and experience of the department 
and its operations.
Reviews during the year have reflected continuing improvement in risk management 
and controls – in particular:

defining clearer programme management roles, responsibilities and
accountabilities

enhancing and creating robust programme assurance frameworks
Improvements are being made to address identified control issues and to provide an 
effective control framework to manage the continuing challenges and risks faced. 
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Control issues
Having reviewed our system of internal control, and the assurances it has given me, I 
have identified the following as significant control issues for the department:
Finance
Monetary value of fraud and error (MVFE)
This continuing control issue is to protect the annual spend on benefits and pensions 
(around £167.6 billion in 2014-15) against fraud and error. Preliminary estimates 
show that the level of overpayment due to fraud and error in 2014-15 is 1.9% 
(down from 2.1% last year). Within the overall total, the rate of fraud and error has 
worsened with respect to some benefits, such as Housing Benefit (due mainly to 
claimant error), but improved in other areas, such as Jobseeker’s Allowance. The 
government is fully committed to reducing fraud and error within the benefit system. 
We are addressing the rising levels of loss associated with Housing Benefit fraud and 
error and are working across central and local government to ensure plans are robust 
and in line with other changes currently facing local authorities.
What we’re doing
We are developing a new long-term Fraud, Error and Debt Strategy for 2015 to 2020. 
Level of concern 
The strategy focuses on making savings from welfare reform and targeting the 
decreased over 
known major areas of loss (such as Housing Benefit and Pension Credit) as set out in 
the last six 
note 27 to the accounts.
months
The National Audit Office has submitted its provisional audit findings on the Fraud 
and Error Stocktake. These are now subject to discussion as part of the formal 
clearance process, with the final report and associated recommendations expected 
to be published on 21 July 2015.
We are working closely with HM Revenue and Customs to support more coordinated 
action to prosecute those who commit fraud. We and HM Revenue and Customs 
will also increase our combined ability to recover overpayments and penalties. This 
should reduce the further build-up of debt as people will only receive what they are 
entitled to.
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Child Maintenance Client Funds Account
There are longstanding issues with the accuracy of child maintenance assessments, 
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and hence also recorded arrears, under both the 1993 and 2003 Child Maintenance 
Schemes. These are reflected in NAO qualifications to the Child Maintenance Client 
Funds Account.
What we’re doing
The fundamental action to manage this issue is the structure of the 2012 Child 
Level of concern 
Maintenance Scheme. The 2012 regime, supported by new technology, ensures that 
decreased over 
the client funds can be fully reconciled every evening. The indicative assessment 
the last six 
accuracy of the 2012 accounts is already at 98% (compared with 97% on the 1993 
months
and 2003 schemes). 
While this may not quite avoid a qualification this year, as levels of automation 
continue to increase, we intend to achieve unqualified Client Funds Account for 
the 2012 Scheme. We have agreed with HM Treasury to produce simpler separate 
accounts for both the 2012 scheme, and 1993 and 2003 schemes. This will clarify 
that this issue only relates to the 1993 and 2003 schemes. 
At the same time, we are closing cases on the 1993 and the 2003 schemes, which 
will mean that other historical issues will be resolved.
Reliance on contractors that deliver key welfare reform services
We spent more than £3 billion on contracted services supporting our day to day 
operations. The main control challenges are:

managing provider performance when we are often the only buyer in the market

recovering backlogs of Personal Independence Payment and Employment and
Support Allowance work capability assessments that built up in 2013

improving the performance regime for managing Work Programme contractors
What we’re doing
We have been improving our in-house capability this year. As part of this we have:
Level of concern 
has stayed the 

implemented a new contract management framework that re-defines the role
same over the 
and accountabilities of the senior contract owner for each provider contract. It
last six months
also establishes new governance processes that provide greater commercial
assurance

created a new workforce planning process to improve our commercial capability.
We are also recruiting for senior commercial professionals

appointed a new capability transformation director to improve supplier
management capability in IT
For Personal Independence Payment, our work is already paying off. We are speeding 
up processes and getting closer to eliminating the backlog of claims.
We are also making progress on the 1.5 million work capability assessments required 
for Employment and Support Allowance claimants and are implementing all the 
recommendations from the independent reviews undertaken on these assessments.
We have also agreed a package of contract changes with each Work Programme 
primary provider, which has strengthened our performance management regime 
and improved our financial controls.
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Information
Keeping our systems and data safe
Since we hold a huge amount of sensitive personal data, we face – like similar 
organisations – a challenge to secure this data, and our IT systems, from ever 
changing threats, including cyber attacks.
What we’re doing
We have enhanced our security, and the governance of information risk 
Level of concern 
management. We have also developed a new security model for online digital 
has stayed the 
services, and further enhanced our Cyber Intelligence and Response Centre, and our 
same over the 
threat assessment capability.
last six months
A mid-year Information Assurance Maturity Model assessment helped us target 
further areas needing attention. These included assessments of our IT security 
vulnerabilities, and risk assessments of our critical national infrastructure.
Our subsequent assessment at the end of 2014-15 confirmed our progress in these 
and other areas. It found we had made progress from last year’s assessment, and 
essentially achieved level 3 in three of the six assessment areas, compared with a 
level 3 in only one assessment area last year.
We are now focusing on other key areas including compliance, and controls for 
privileged users. 
Transforming our IT infrastructure to meet future digital and 
welfare reform needs while maintaining our existing systems
IT transformation requires the careful management of IT systems, our relationship 
with our IT providers, and the upgrading or changing of much of our IT infrastructure.
What we’re doing
We continue to solve problems as they arise with a clear focus on delivering effective 
Level of concern 
stable services to underpin operational performance. This action included:
has stayed the 
same over the 

prioritising activity to improve live running of a number of systems that affect
last six months
how staff deliver services to customers

identifying and implementing solutions for various staff access issues

enhancing the level of automation for financial and performance reporting
We are also managing the critical interface between old and new IT until our older 
systems are phased out or replaced, and providing a commercial and organisational 
framework to support the swift movement to new digital services (Carer’s Allowance, 
Universal Credit, and the new State Pension). 
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Change
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Delivering large, complex welfare reform programmes 
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Large, complex, welfare reforms present a series of challenges to ensure they are 
safely controlled.
What we’re doing
We have improved the scrutiny and effectiveness of our programme boards by 
Level of concern 
enhancing their delegated controls. 
decreased over 
the last six 
We have closely monitored, and revised when necessary, the implementation plans 
months
of all our major programmes. Specific actions taken include:

minimising the risks to the delivery of Universal Credit by using a “test and learn”
approach

revising the timetable for natural reassessment of Disability Living Allowance
claims to ensure we have sufficient capacity and capability available

developing a digital pension statement service as a parallel project with
HM Revenue and Customs to support the delivery of State Pension reform from
April 2016
We also continued to improve our delivery capability by sharing best practice from 
the successful early implementation of child maintenance reforms, and through 
feedback from the Major Projects Authority, parliamentary select committees and 
the National Audit Office. 
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People
Professional capability and skills 
We need to develop our professional skills and experience in a number of key areas 
to reflect our changing business needs.
What we’re doing
Overall, our capability has improved since last year, but this remains a key issue 
Level of concern 
reported by most directors general. We have delivered our first capability plan (and 
has stayed the 
reviewed it in 2015), with activities to build the skills and experience of staff in the 
same over the 
civil service priority areas:
last six months

leading and managing change

digital

commercial

project and programme delivery
To these we have added a fifth priority: customer service.
Activities include:

ensuring our leaders are equipped to carry out our business

embedding our new approach to commercial category management, and
building specific market capability through recruitment

developing our digital capability through recruitment (9 new digital head roles)
and through our DWP Digital Academy – now recognised as an exemplar across
government (by the end of 2014-15 it had 150 graduates, with a further 1,000
people attending an insight day)

developing a framework to embed the operational delivery profession across our
operations
A capability board, chaired by the HR director general, steers this work. It provides 
challenge and assurance of plans and outcomes in these priority areas.
Robert Devereux
Accounting Officer
10 July 2015
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Lead non-executive director’s 
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report for 2014-15
In the final year of this parliament, the department has continued to drive forward 
its programme of welfare reforms, including expanding Universal Credit and 
achieving record levels of employment while driving the department’s costs down. 
The departmental board continues to operate well and our non-executive members 
have used their expertise to support and challenge the team in the delivery of the 
department’s extensive agenda. In 2014-15, Sir Ian Cheshire stepped down as lead 
non-executive in November and Lieutenant General (retired) Andrew Graham was 
appointed to the departmental board and to chair of the Departmental Audit and 
Risk Assurance Committee, having previously been its deputy chairman. This year 
also saw the extension of the appointments of David Lister and Willy Roe as non-
executive board members. Willy Roe’s appointment was extended to the end of this 
parliament and he now steps down, having worked with the department in different 
roles for 22 years, latterly serving 5 years on the departmental board. Mark Harper 
MP joined the board, following his appointment as Minister for Disabled People 
in June 2014 and Mayank Prakash, the new director general for technology, was 
appointed to the board in November 2014, following Andy Nelson’s departure.
In addition to their roles on the departmental board, several of the non-executive 
members have undertaken wider activities. Sir Ian Cheshire supported the 
department in building its financial capability and developing talent management. 
David Lister helped the department to develop its digital and technology capability, 
in particular with the recruitment and induction of key senior posts. Willy Roe 
continued his oversight of the department’s arm’s length bodies, notably through 
the triennial reviews of the Social Security Advisory Committee and the Industrial 
Injuries Advisory Committee. In his Audit Committee role, Andrew Graham gave 
particular attention and support to the team responsible for the rollout of Universal 
Credit. I tested and supported the commercial procurement process for a major new 
departmental contract.
At its quarterly meetings, the board reviewed the performance of key departmental 
programmes including the delivery of Universal Credit, the Work Programme, 
Disability Benefits and the new State Pension. The board also reviewed the 
challenges for financial planning arising from the welfare cap and the implications 
of elements of Scottish devolution for the department. In addition the board 
considered the department’s commercial and IT capability and staff engagement as 
key factors underpinning the successful delivery of an ambitious reform programme.
I would like to thank my fellow non-executives for their commitment and work 
over the last year and particularly Sir Ian Cheshire and Willy Roe as they take on 
new roles. Looking to the year ahead, we will endeavour to continue to help the 
department and its ministers to deliver their agenda efficiently and effectively. 
Dame Clara Furse DBE
Lead non-executive
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The Certificate of the Comptrol er and 
Auditor General to the House of Commons
I certify that I have audited the financial statements of the Department for Work and 
Pensions and of its Departmental Group for the year ended 31 March 2015 under 
the Government Resources and Accounts Act 2000. The Department consists of 
only the core Department. The Departmental Group consists of the Department and 
the bodies designated for inclusion under the Government Resources and Accounts 
Act 2000 (Estimates and Accounts) Order 2015. The financial statements comprise: 
the Department’s and Departmental Group’s Statements of Comprehensive Net 
Expenditure, Financial Position, Cash Flows, Changes in Taxpayers’ Equity; and the 
related notes. I have also audited the Statement of Parliamentary Supply and the 
related notes. These financial statements have been prepared under the accounting 
policies set out within them. I have also audited the information in the Remuneration 
Report that is described in that report as having been audited.
Respective responsibilities of the Accounting Officer and auditor
As explained more fully in the Statement of Accounting Officer’s Responsibilities, the 
Accounting Officer is responsible for the preparation of the financial statements and 
for being satisfied that they give a true and fair view. My responsibility is to audit, 
certify and report on the financial statements in accordance with the Government 
Resources and Accounts Act 2000. I conducted my audit in accordance with 
International Standards on Auditing (UK and Ireland). Those standards require me 
and my staff to comply with the Auditing Practices Board’s Ethical Standards for 
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether caused by fraud or error. 
This includes an assessment of: whether the accounting policies are appropriate 
to the Department’s and the Departmental Group’s circumstances and have been 
consistently applied and adequately disclosed; the reasonableness of significant 
accounting estimates made by the Accounting Officer; and the overall presentation 
of the financial statements. In addition I read all the financial and non-financial 
information in the ‘Our performance overview’, ‘Our performance story’, ‘Our 
performance analysis’ and ‘Our controls’ sections of the Annual Report to identify 
material inconsistencies with the audited financial statements and to identify 
any information that is apparently materially incorrect based on, or materially 
inconsistent with, the knowledge acquired by me in the course of performing the 
audit. If I become aware of any apparent material misstatements or inconsistencies 
I consider the implications for my certificate.
I am required to obtain evidence sufficient to give reasonable assurance that the 
Statement of Parliamentary Supply properly presents the outturn against voted 
Parliamentary control totals and that those totals have not been exceeded. The 
voted Parliamentary control totals are Departmental Expenditure Limits (Resource 
and Capital), Annually Managed Expenditure (Resource and Capital), Non-Budget 
(Resource) and Net Cash Requirement. I am also required to obtain evidence 
sufficient to give reasonable assurance that the expenditure and income recorded in 
the financial statements have been applied to the purposes intended by Parliament 
and the financial transactions recorded in the financial statements conform to the 
authorities which govern them.
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Basis for Qualified Opinion on Regularity
Note 27 to the Accounts records benefit expenditure of £168.1 billion in  
2014-15. Some £86.5 billion (51.5 per cent) of this expenditure relates to State 
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Pension. The Department estimates that in 2014-15, fraud and error within 
State Pension expenditure resulted in overpayments of £130 million (0.2 per 
cent of related expenditure) and underpayments of £150 million (0.2 per cent of 
related expenditure). For all other benefit expenditure, the Department estimates 
that fraud and error resulted in overpayments of £3.02 billion (3.7 per cent of 
related expenditure) and underpayments of £1.28 billion (1.6 per cent of related 
expenditure). Where fraud and error result in over or underpayment of benefits, the 
transactions are not in conformity with the primary legislation which specifies the 
entitlement criteria for each benefit and the method used to calculate the amount 
of benefit to be paid.  
I have therefore qualified my opinion on the regularity of benefit expenditure other 
than State Pension because of the level of overpayments attributable to fraud and 
error, which have not been applied to the purposes intended by Parliament and 
because the level of under and overpayments in such benefit expenditure which are 
not in conformity with the relevant authorities. 
Opinion on regularity
In my opinion, except for the level of fraud and error in certain benefit expenditure 
referred to in the basis for qualified opinion on regularity paragraph, in all material 
respects:

the Statement of Parliamentary Supply properly presents the outturn against
voted Parliamentary control totals for the year ended 31 March 2015 and shows
that those totals have not been exceeded; and

the expenditure and income recorded in the financial statements have been
applied to the purposes intended by Parliament and the financial transactions
recorded in the financial statements conform to the authorities which govern
them.
Details of these matters are set out in my accompanying report. 
Opinion on financial statements 
In my opinion:

the financial statements give a true and fair view of the state of the
Department’s and the Departmental Group’s affairs as at 31 March 2015 and of
the Department’s net operating cost and Departmental Group’s net operating
cost for the year then ended; and

the financial statements have been properly prepared in accordance with the
Government Resources and Accounts Act 2000 and HM Treasury directions
issued thereunder.
Opinion on other matters
In my opinion:

the part of the Remuneration Report to be audited has been properly prepared in
accordance with HM Treasury directions made under the Government Resources
and Accounts Act 2000; and

the information given in the ‘Our performance overview’, ‘Our performance
story’, ‘Our performance analysis’ and ‘Our controls’ sections of the Annual
report for the financial year for which the financial statements are prepared is
consistent with the financial statements.
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Matters on which I report by exception
I have nothing to report in respect of the following matters which I report to you if, in 
my opinion:

adequate accounting records have not been kept or returns adequate for my
audit have not been received from branches not visited by my staff; or

the financial statements and the part of the Remuneration Report to be audited
are not in agreement with the accounting records and returns; or

I have not received all of the information and explanations I require for my audit;
or

the Governance Statement does not reflect compliance with HM Treasury’s
guidance.
Sir Amyas C E Morse   
13 July 2015
Comptroller and Auditor General
National Audit Office
157-197 Buckingham Palace Road
Victoria
London
SW1W 9SP
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Report by the Comptrol er and 
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Auditor General
Fraud and error in benefit expenditure
Introduction
1. The Department’s total estimated expenditure on benefits in 2014-15 was some
£168.11 billion, of which £143.8 billion was in respect of benefits paid directly by the
Department and £24.3 billion in respect of benefits paid on the Department’s behalf
by local authorities (Housing Benefit). Benefit expenditure represents 96% of the
Department’s 2014-15 total net operating costs of £174.8 billion, as recorded in the
Department’s Annual Report and Accounts.
2. Fraud and error is a significant problem in benefit expenditure. Overpayments
arising from fraud and error increase costs to taxpayers and reduce public resources
available for other purposes. Underpayments mean households are not getting the
support they are entitled to.
3. Benefit payments are inherently susceptible to fraud and error, because:

Entitlement is based on a range of eligibility criteria;

They are dependent on claimants notifying the Department of changes of
circumstance; and

The complexity of benefits can cause confusion and genuine error.
4. Note 27 to the Department’s accounts sets out forecast expenditure by benefit
type, and the Department’s estimate of the extent of fraud and error in each type.
We consider the estimate of fraud and error disclosed in the Annual Report and
Accounts is the best measure currently available.
5. We acknowledge the significant challenge the Department faces in administering
a complex benefits system to a high degree of accuracy in a cost effective way.
Some benefits, mainly those with means-tested entitlements, are more inherently
susceptible to fraud and error due to their complexity. These tend to be the ones
exhibiting the highest estimated rates of fraud and error, such as Housing Benefit
and Pension Credit.
Estimated level of fraud and error in benefit expenditure
6. In Note 27 to the accounts, the Department estimates total gross overpayments
due to fraud and error in 2014-15 are £3.2 billion (2013-14 – £3.3 billion). This
equates to 1.9 per cent of total forecast benefit expenditure of £168.1 billion
(2013-14 – 2.0 per cent on expenditure of £163.9 billion). While the reduction in the
percentage overpayment is welcome, the Department acknowledges that this is not
a statistically significant change from the levels of fraud and error reported in
2013-14.
7. Figure 1 below shows the estimated overpayments of benefit expenditure due to
fraud and error as a percentage of benefit expenditure since 2006-07.
1 As per Note 27 to the accounts, the total expenditure figures quoted are the latest estimated 
expenditure figures available for 2014-15 at the time the Department produced the fraud and error 
estimates.
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Figure 1: Estimated overpayments of benefit expenditure due to 
fraud and error
3.00%
2.50%
2.00%
t %
ymen 1.50%
erpa 1.00%
Ov
0.50%
0.00% 2006-07 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15
Year
NOTES: 1.  Vertical bars equal confidence levels around the most likely estimate.
Figure Source: Department for Work and Pensions Annual Report and Accounts 2006-07 to 2014-15
8. The Department estimates total gross underpayments in 2014-15 are £1.4 billion
(2013-14 – £1.4 billion), which equates to 0.9 per cent of total benefit expenditure
(2013-14 – 0.9 per cent).
The Comptroller and Auditor General’s audit opinion
9. Under the Government Resources and Accounts Act 2000, I am required to give an
opinion on whether, in all material respects:

The financial statements give a true and fair view of the state of the Department
for Work and Pensions’ affairs as at 31 March 2015 and of its net operating costs
for the year then ended; and

The financial statements have been properly prepared in accordance with the
Government Resources and Accounts Act 2000 and HM Treasury directions
issued thereunder.
10. In addition, I am required to obtain evidence sufficient to give reasonable
assurance that the expenditure and revenue recorded in the financial statements
have been applied to the purposes intended by Parliament and the financial
transactions conform to the authorities which govern them (my regularity opinion).
11. Legislation specifies entitlement criteria for each benefit and the method to be
used to calculate the amount of benefit to be paid. Where fraud and error result
in over or underpayment of benefit to an individual who is either not entitled to
that benefit, or is paid at a rate which differs from that specified in the legislation,
the transaction is not in conformity with Parliament’s intention and is irregular. In
determining whether this should lead to a qualification of my audit opinion, I have
chosen to apply a materiality judgement.
12. In respect of the 2014-15 financial statements of the Department for Work and
Pensions, I have therefore qualified my opinion on regularity due to the material level
of fraud and error in benefit expenditure, other than State Pension where the level
of fraud and error is significantly lower. For State Pension, the Department estimates
that fraud and error in 2014-15 resulted in gross overpayments of £0.13 billion
(2013-14 – £0.11 billion), which is 0.2 per cent of related expenditure (2013-14 –
0.1 per cent), and gross underpayments of £0.15 billion (2013-14 – £0.12 billion),
which is 0.2 per cent of related expenditure (2013-14 – 0.1 per cent).
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13. The Department’s accounts, and those of predecessor departments
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administering this expenditure, have received similar qualified audit opinions since
1988-89. Issuing an audit qualification is a serious matter, and the fact that similar
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qualifications have been in place for such a long period of time does not lessen that
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seriousness. I consider that the overall value of fraud and error in benefit expenditure
remains unacceptably high, and the qualification of my audit opinion reflects that.
14. This report sets out the reasons and context for my qualified audit opinion by
commenting on the key causes of fraud and error in benefit expenditure and the
actions the Department is taking to try to reduce it.
Fraud and error measurement
15. The Department analyses overpayments and underpayments into three
categories, which it defines as follows:

Official error, which arises when a benefit is paid incorrectly due to inaction,
delay or a mistaken assessment by the Department, a local authority or Her
Majesty’s Revenue and Customs (HM Revenue and Customs);

Claimant error, which occurs when claimants make inadvertent mistakes with no
fraudulent intent; and

Fraud, which arises when claimants deliberately seek to mislead the Department
or local authorities which administer benefits on the Department’s behalf to
claim money to which they are not entitled.
16. The Department has reported the estimated overpayments and underpayments
against each category in Note 27 to the accounts. The Annex to this report
summarises that categorisation, and further analyses overpayments and
underpayments into those benefits administered directly by the Department and
those administered by local authorities.
17. Caution should be exercised when examining the estimates for trends, due to the
measurement uncertainties explained in Note 27. In particular, estimated levels of
fraud and error in some benefits are a number of years old. For example, Disability
Living Allowance, which accounted for £13.8 billion of expenditure in 2014-15, has
not been measured for fraud and error since 2004-05, and the Department does not
plan to measure its successor benefit, Personal Independence Payment, until
2016-17. We believe that the absence of up-to-date information on error rates in
such a large benefit stream creates a risk that the Department is making decisions
based on out-of-date measurements. Furthermore, some smaller value benefits
have never undergone a measurement exercise. The levels of fraud and error in
these benefits are calculated through proxy rates from other measured benefits,
either continuously measured or historically measured.
18. For the 2014-15 estimates, the Department has aligned the Housing Benefit
fraud and error measurement methodology with the measurement methodology for
the other continuously measured benefits (Jobseeker’s Allowance, Employment and
Support Allowance, State Pension Credit and Income Support). If the measurement
methodology had remained the same as in previous years, Housing Benefit fraud
and error would have increased from 5.8 per cent in 2013-14 to 6.1 per cent in
2014-15. The Housing Benefit measurement methodology change has not impacted
the total estimated level of overpayments due to fraud and error of 1.9 per cent.
19. The overpayment and underpayment figures quoted in this report all relate
to the gross level of fraud and error in benefit expenditure. The Department does
recover some overpayments as and when it becomes aware of them. As reported in
Note 27, in 2014-15 the Department expects to recover around £900 million from
overpaid claimants.
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The Department’s work to reduce fraud and error
20. The Department recognises that the level of fraud and error in benefit
expenditure is too high and has, over the years, made many efforts to reduce it. The
2014-15 preliminary estimates suggest that these efforts have had some success, as
the level of fraud and error in benefits directly administered by the Department has
reduced since 2013-14. However, fraud and error within Housing Benefit, which is
administered by local authorities, has increased over the last two years.
21. 2014-15 was the last year of a five year Departmental fraud and error strategy.
The strategy, set in October 2010, proposed to deliver a reduction in overpayments
of some £600 million per year from existing benefits, with a further £200 million per
year to be saved through the introduction of Universal Credit. The Department aimed
to reduce the estimated level of overpayments to 1.7 per cent by April 2015. The
Department did not set a target for reducing underpayments.
22. During 2014-15, the Department has undertaken work in a number of areas to
reduce fraud and error. These include:

Launching advertising campaigns to:
- encourage the public to report known perpetrators of fraud, and
-  make claimants aware of the need to keep the Department informed of any
changes in circumstances which would affect their benefit payments;

Using real-time information (RTI) income and earnings data held by HM Revenue
and Customs to identify inconsistencies in earnings data provided by claimants;

Addressing abroad fraud by greater use of data-sharing to verify the continued
entitlement of UK state pensioners living overseas;

Additional case cleanse activity, using risk rules and data matching to identify
potential error and fraud;

Implementing a Quality Framework for new telephone claims, which is designed
to improve both benefit claim accuracy and claimant experience;

Enforcing stronger penalties. Since 2012, the Department and local authorities
have imposed nearly 70,000 penalties for fraud and more than 150,000
penalties for identified claimant error;

Developing specific initiatives to work with local authorities to reduce fraud and
error in Housing Benefit (further details at paragraph 39); and

Implementing the Single Fraud Investigation Service, which is designed to co- 
ordinate the investigations previously managed individually by the Department,
HM Revenue and Customs and local authorities. The Department intends that
by pooling expertise and information, it will be able to address fraud more
efficiently.
23. Over the last five years, the Department has developed new insight and analysis
on fraud and error. This includes work we undertook with the Department in 2012
and 2013 to identify the root causes of fraud and error in benefit expenditure and
the characteristics required for a robust fraud and error response.
24. One of the principal findings of this work was that the largest proportion of
error enters the benefits system due to changes in claimants’ circumstances after
a correct initial award. As a result, during 2014-15, the Department increasingly
focussed on identifying and correcting errors in existing claims arising from
previously unidentified changes in claimants’ circumstances. This work was
concentrated on Pension Credit, Disability Living Allowance and a range of working
age benefits. This work uses data scans and matching rules to identify cases with
potential fraud and error for further investigation. Building on this, the Department
is developing an analysis and intelligence hub to improve its analytical capability by
using a wider range of data sources. The Department is building the hub for Universal
Credit, but it will also be helpful for legacy benefits.
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25. Going forward, the challenge for the Department will be to move such analysis
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and investigation into its business as usual processing of benefits. As part of this, we
consider the Department should consider applying its recently introduced Quality
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Framework to processing teams dealing with claimants’ changes in circumstances,
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as well as just new claims.
26. Our previous work with the Department also identified the major causes of
overpayments. A breakdown of these for the continuously measured benefits in
the 2014-15 preliminary estimates is set out in Figure 2. This clearly shows that
misreporting of income is the largest cause of overpayments. In response, the
Department has increasingly used data matching. In 2014-15, it carried out a bulk
exercise to match RTI data against legacy benefits. The Department states that
this work has generated savings of some £114 million, and is now integrating such
data matching into business as usual activity for Pension Credit.  The Department
continues to use RTI data to provide information on earnings as part of the
calculation of claimants’ Universal Credit entitlement.
Figure 2: Where overpayments arise
Error Type
£m
Income and earnings - misreporting and incorrect processing
£1,120m
Living arrangements - undisclosed and incorrect processing
£340m
Living abroad and untraceable - undisclosed and incorrect 
processing
£230m
Capital held - misreporting and incorrect processing
£220m
Departmental errors - in application of controls and processing of 
premiums
£130m
Other conditions of entitlement - misreporting and incorrect 
decisions
£80m
Tax Credit income - misreporting
£50m
Other
£190m
Total
£2,360m
NOTES: 1. DWP is able to assess the causes of overpayments on its continuously measured benefits: 
Jobseeker’s Allowance, Pension Credit, Housing Benefit, Income Support and Employment and Support 
Allowance. It can not undertake this analysis on the benefits which are not continuously measured.
Figure Source: Department for Work and Pensions Accounts, Fraud and Error in the Benefit System: 
Preliminary 2014-15 Estimates
27. In March 2015, the Department published a report ‘Tackling Fraud, Error and Debt
in the benefits and tax credits system’. This recorded the progress made over the
last five years against the 2010 strategy and the measures that it has put in place
to secure further improvements. It also reiterated that the ‘levels of fraud, error and
debt in the benefits and tax credits system are unacceptably high’.
28. The Department’s preliminary estimate for 2014-15 shows that it has slightly
reduced overpayments due to fraud and error from 2.0 per cent of benefit
expenditure (2013-14 final estimate) to 1.9 per cent. The Department notes that this
is a non- statistically significant change. As noted above, in 2010 the Department
agreed a target to reduce the estimated level of overpayments due to fraud and
error to 1.7 per cent of benefit expenditure by April 2015. Whilst the final estimates
of fraud and error for 2014-15 will not be published until November 2015, in my view
the Department is not on track to achieve this target. The Department also set its
own target to reduce the levels of overpayments and underpayments caused by its
own mistakes (Official Error) by £200 million between October 2010 and March 2015.
The 2014-15 preliminary estimates indicate that it has not met this target.
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29. Furthermore, the Department has reduced the pace of the roll out of Universal
Credit, on which I commented in my report ‘Universal Credit: Progress Update’
(HC786 2014-15).  As a result, Universal Credit has not yet realised the £200m
annual fraud and error savings originally expected by March 2015. However, the
Department expects that once fully rolled out, the implementation of Universal
Credit will reduce annual fraud and error overpayments by around £0.5 billion.
Before that happens, the Department should not neglect the existing levels of fraud
and error on those legacy benefits which will continue to be in operation until fully
replaced by Universal Credit.
30. In April 2015, the Department issued a new fraud, error and debt strategy for
the period 2015 to 2020. The strategy details a range of interventions planned
by the Department to address overpayments. This new strategy is designed to be
supported by benefit level fraud, error and debt reduction strategies. In March 2015
the Department produced such strategies for Housing Benefit and Pension Credit;
two of the benefits with the largest levels of fraud and error. These two strategies set
out specific success criteria and envisage the development of detailed activity plans
setting out exactly what work will be done in support of the strategies, including new
initiatives and process reviews.
31. We welcome the Department’s move towards preparing strategic approaches on
an individual benefit basis. This should provide greater focus on the specific risks and
challenges in each benefit, allow the development of benefit specific interventions
and provide greater prioritisation of activity. However, these strategic approaches
need to be supported by:

Clear operational plans, which set out expectations, activity, and accountability
for various teams within the Department, including those responsible for front-
line operations;

Clear baselines and success criteria, against which the Department can regularly
and robustly measure and monitor progress; and

As planned interventions are rolled out, the Department must collate
information and undertake rigorous measurement so that each intervention
can be assessed to determine if it works and is actually delivering the planned
savings and outcomes.
Housing Benefit
32. Estimated overpayments in Housing Benefit due to fraud and error have
continued to rise in 2014-15. This contrasts to most other continuously measured
benefits where levels are reducing or remaining similar. As referenced in paragraph
18 above, in 2014-15 the Department has amended the measurement methodology
for Housing Benefit to align it with the methodology used for other continuously
measured benefits. The estimated overpayments in Housing Benefit due to fraud
and error for 2014-15 based on the old methodology is 6.1%, however based on the
new methodology the estimated level is 5.7%.
33. Housing Benefit is administered by local authorities on behalf of the Department.
Nevertheless, the Department has a key role in setting the framework within which
local authorities manage Housing Benefit. The funding arrangement between the
Department and local authorities contains a formula intended to encourage local
authorities to make accurate payments by affecting the amounts paid to them
based on accuracy targets.
34. Many of the reasons for overpayments in Housing Benefit are similar to those
of other benefits. In particular, Housing Benefit is means-tested, which means
entitlement can be based on complex, interlinked or subjective evidence, which is
sometimes difficult to obtain or verify. This is more challenging for Housing Benefit,
which because of its high caseload of in-work claimants, is particularly susceptible to
fraud and error arising from misreporting of earnings and income.
98 Department for Work and Pensions Annual Report and Accounts 2014-15
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35. Errors also arise from poor or non-timely exchange of information between the
Our con
Department and the local authority regarding whether a claimant is in receipt of,
or entitled to, a qualifying benefit. In practice, given the lack of direct integration
tr
between the Department’s systems and those of all local authorities, such errors will
ols
be difficult to eliminate.
36. In response to the high error rate, my staff undertook and published a detailed
study, ‘Housing Benefit fraud and error’ (HC720 2014-15), which focused on the
Department’s ownership and oversight of the administration of Housing Benefit and
its associated fraud and error.
37. In my report, I recommended the Department set clearer responsibilities for
reducing fraud and error, improve incentives for local authorities to prevent and
identify fraud and error and improve the quality of information about fraud and error
in oversight and assurance processes. As noted earlier in this report, in March 2015
the Department designed a Housing Benefit fraud and error strategy, by which it
aims to address the key findings identified in my report.
38. The key elements of the Department’s revised strategy are:

To utilise data and analytics to ensure a quality exchange of claimant data;

Review the end to end claimant journey to understand where processes,
guidance, learning and claimant engagement could be improved;

Consider further incentives for local authorities to support them to reduce the
monetary value of fraud and error; and

Better understand local authority performance.
39. This will build on previous initiatives by the Department to enhance the sharing of
data. These include:

In February 2012, the Department started supplying daily updates of changes
in benefit entitlements to local authorities through Automated Transfers to
Local Authority Systems (ATLAS). Whilst ATLAS provides a welcome opportunity
for data sharing, the Work and Pensions Select Committee has recommended
that the Department and local authorities jointly review ATLAS so that local
authorities can access the information they need to verify Housing Benefit claims
more easily;2

In November 2014, the Department launched the Fraud and Error Reduction
Incentive Scheme (FERIS). The scheme aims to encourage local authorities to
identify changes of circumstances which will lead to a reduction in the Housing
Benefit fraud and error. Financial rewards are offered to local authorities that
identify reductions above a set threshold. FERIS is intended to run through
2014-15 and 2015-16 with 98% of local authorities, covering 99% of the
Housing Benefit caseload, having enrolled to participate in the scheme.
40. In due course we intend to review the success of the Department’s revised
strategy for fraud and error in Housing Benefit.
Conclusion
41. The estimated value of fraud and error overpayments in benefit expenditure
in 2014-15 is £3.2 billion, or 1.9 per cent of expenditure. This is a non-statistically
significant reduction in the level of fraud and error from 2013-14 (2013-14 –
£3.3 billion and 2.0 per cent respectively).
42. Over the period in which the Department has measured them, fraud and error
rates have consistently remained high. As a result, both I and my predecessors have
2. Work and Pensions Committee Report Fraud and error in the benefits system HC 1082 2013-14 para 37
99
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qualified our audit opinion on the Department’s accounts on the grounds of material 
amounts of fraud and error in benefit expenditure since 1988-89. I consider that this 
view remains consistent with the views expressed by the Government in the March 
2015 Cabinet Office Fraud, Error and Debt Taskforce document ‘Tackling Fraud, Error 
and Debt in the benefits and tax credits system’, that the level of fraud and error in 
the benefit system is unacceptably high.
43. In order to develop effective ways of reducing fraud and error in benefits
expenditure, the Department needs to further enhance its understanding of how
and why overpayments arise in individual benefits. This requires the collection and
analysis of quantitative and qualitative data on fraud and error to identify key risk
areas and an understanding of how it will exploit this data to direct operational
activity. The Department needs to use this data to develop fraud and error strategies
for individual benefits, as it has started to do with Pension Credit and Housing
Benefit. The strategies then need to be put into effect, which will need to include
designing controls to tackle the inflow of fraud and error into the benefits system,
as well as removing the fraud and error already in the system. To make this work
will require commitment and focus on behalf of the whole Department, including
operational teams.
44. The 2010 Spending Review ended in March 2015. We have taken this as an
opportunity to take stock of the work that has been done by both the Department
and HM Revenue and Customs to reduce the levels of fraud and error in benefits
during the Spending Review period. I will shortly issue my report, ‘Fraud and Error
Stocktake’ in which we look at the Department’s progress in reducing fraud and error
in the 2010 Spending Review period, and their emerging plans to tackle fraud and
error.
Sir Amyas C E Morse 
National Audit Office
Comptroller and Auditor General 
157-197 Buckingham Palace Road
Victoria
London SW1W 9SP
13 July 2015
100 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our con
Annex: Overview of fraud and error estimates
1. The tables below report fraud and error rounded to the nearest £100 million, and
tr
rows and columns may not sum due to rounding. The percentages are, however,
ols
calculated on the basis of unrounded figures.
Figure 3: Estimated overpayments and underpayments by category
2014-15
2014-15
2014-15
2013-14
2013-14
Category
Total expenditure
Overpayments
Underpayments
Overpayments
Underpayments
£ million*
£ million*
£ million*
£ million*
(% of related 
(% of related 
(% of related 
(% of related 
£ million*
expenditure)
expenditure)
expenditure)
expenditure)
Official error
700 (0.4)
500 (0.3)
700 (0.4)
500 (0.3)
Claimant error
1,300 (0.8)
900 (0.6)
1,500 (0.9)
900 (0.6)
Fraud
1,100 (0.7)
-      -  
1,100 (0.7)
-      -  
Total
168,100
3,200 (1 .9)
1,400 (0 .9)
3,300 (2 .0)
1,400 (0 .9)
NOTES
Figure Source: Unrounded estimates provided by the Department for Work and Pensions for the purposes 
of our financial audit work. The same estimates were used by the Department to produce the report Fraud 
and Error in the Benefit System: Preliminary 2014-15 Estimates (for the 2014-15 estimates) and Fraud and 
Error in the Benefit System: Preliminary 2013-14 Estimates (for the 2013-14 estimates).
*Rounded to the nearest £100 million. Rows and columns may not sum due to rounding.
2. Overall, the level of fraud and error within benefits directly administered by
the Department has fallen in 2014-15. However, fraud and error within Housing
Benefit (which is administered on the Department’s behalf by local authorities)
has increased. As stated in paragraph 18, if the measurement methodology had
remained the same as in previous years, Housing Benefit fraud and error would
have increased from 5.8 per cent in 2013-14 to 6.1 per cent in 2014-15.  I comment
specifically on Housing Benefit in paragraphs 32 to 40.
3. We set out in figure 4 below the split of overpayments and underpayments
between those benefits administered directly by the Department, and those
administered by local authorities.
101
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Figure 4: Breakdown of estimated overpayments and 
underpayments by category
2014-15
2013-14
Benefits 
Housing related 
Benefits 
Housing related 
administered 
benefits 
administered 
benefits 
directly by the 
administered by 
All DWP 
directly by the 
administered by 
All DWP 
Department Local Authorities**
benefits
Department Local Authorities**
benefits
Total expenditure 
£ million*
143,800
24,300
168,100
140,000
23,900
163,900
Official error 
overpayments
£ million* (% of 
related expenditure)
600 (0.4)
100 (0.6)
700 (0.4)
600 (0.4)
100 (0.6)
700 (0.4)
Official error 
underpayments
£ million* (% of 
related expenditure)
400 (0.3)
100 (0.3)
500 (0.3)
400 (0.3)
100 (0.3)
500 (0.3)
Claimant error 
overpayments
£ million* (% of 
related expenditure)
500 (0.4)
800 (3.2)
1,300 (0.8)
600 (0.4)
900 (3.8)
1,500 (0.9)
Claimant error 
underpayments
£ million* (% of 
related expenditure)
700 (0.5)
200 (0.9)
900 (0.6)
600 (0.4)
300 (1.2)
900 (0.6)
Claimant fraud 
overpayments
£ million* (% of 
related expenditure)
700 (0.5)
500 (1.9)
1,100 (0.7)
800 (0.5)
300 (1.4)
1,100 (0.7)
Claimant fraud 
underpayments
£ million* (% of 
related expenditure)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
0 (0.0)
NOTES
Figure Source: Unrounded estimates provided by the Department for Work and Pensions for the purposes 
of our financial audit work. The same estimates were used by the Department to produce the report Fraud 
and Error in the Benefit System: Preliminary 2014-15 Estimates (for the 2014-15 estimates) and Fraud and 
Error in the Benefit System: Preliminary 2013-14 Estimates (for the 2013-14 estimates).
*Rounded to the nearest £100 million. Rows and columns may not sum due to rounding.
**In 2014-15 DWP introduced changes to the way it measured Housing Benefit fraud and error.
4. Official error arises where the Department or the local authority makes a mistake
in administering a benefit. In the benefits administered directly by the Department,
official errors are proportionately higher in means-tested or disability related
benefits, where entitlement depends on the Department collating and assessing
a wide range of information. In general, the more complex the data requirements
required to establish entitlement to a benefit, the more difficult it is to administer
and therefore the higher the inherent risk of an official error being made.
5. Claimant error accounts for just under half the total cost of the Department’s
overpayments and around two thirds of the total cost of underpayments. As with
official error, those benefits with the highest claimant error rates are means-tested
benefits, such as Pension Credit, Jobseeker’s Allowance and Income Support, which
have entitlement conditions that relate to the level of income and/or savings of
claimants. Mistakes can arise here as a result of the claimant failing to provide
accurate or complete information to the Department, or having failed to report a
change in their circumstances, which leads to an incorrect assessment being made.
6. Claimants have a responsibility, as a condition of receiving benefit, to provide the
Department with accurate and complete information and to tell the Department
promptly about any changes in their personal circumstances that might affect the
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amount of benefit to which they are entitled. This relies on claimants being pro-
Our con
active in notifying changes. In the past the Department has adopted this approach 
because it did not have routine access to verifiable third party sources of information, 
tr
or the information may not exist that would allow them to track such changes. This 
ols
is now changing with the increased use of income and earnings information from HM 
Revenue and Customs.
7. Overpayments due to fraud again arise primarily in the means-tested benefits
that require claimants to supply complete and accurate information in order to
establish entitlement to benefit. Most commonly, fraudulent claimant statements
relate to the claimant’s living arrangements where the claimant has a partner but
is claiming and receiving benefit as a single person, or falsely stating the level of
their earnings or savings, whether those are legitimate earnings or from the grey
economy. There are also instances where the claimant has provided a false address
in order to claim benefit.
8. The Department’s research indicates that claimant difficulties in reporting changes
in their circumstances, and concerns about potential changes or disruptions to
benefit payments, contribute to fraud3. The complex administration of benefits
also allows potential fraudsters the opportunity to present themselves differently
to different administering agencies, which are not always sufficiently integrated to
identify those instances. The introduction of RTI is seeking to tackle the disparity
between information provided to the Department and HM Revenue and Customs.
3. ‘Tackling fraud and error in the benefit and tax credits system’, October 2010. 
103
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Our expenditure
104 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
Statement of Parliamentary Supply
e
Summary of resource and capital outturn 2014-15
2014-15
2013-14
Estimate
Outturn
Voted  
outturn 
Outturn 
compared 
with 
Estimate: 
SOPS 
saving/
Note
Voted
Non-Voted
Total
Voted
Non-Voted
Total
(excess) 
Total
£000
£000
£000
£000
£000
£000
£000
£000
Departmental 
Expenditure 
Limit
- Resource
2.1
6,637,258
579,570
7,216,828
6,571,145
580,823
7,151,968
66,113
7,358,612
- Capital
2.2
235,311
45,500
280,811
205,053
44,165
249,218
30,258
185,683
Annually 
Managed 
Expenditure
- Resource
2.1
73,995,765
95,133,357 169,129,122
73,259,533
94,379,240 167,638,773
736,232 163,321,323
- Capital
2.2
-
(100,000)
(100,000)
-
(124,364)
(124,364)
-
(87,020)
Total budget
80,868,334
95,658,427 176,526,761
80,035,731
94,879,864 174,915,595
832,603 170,778,598
Non-budget
- Resource
2.1
2,556,662
-
2,556,662
2,059,428
-
2,059,428
497,234
2,051,250
Total
83,424,996
95,658,427 179,083,423
82,095,159
94,879,864 176,975,023
1,329,837 172,829,848
Total resource 
80,633,023
95,712,927 176,345,950
79,830,678
94,960,063 174,790,741
802,345 170,679,935
budget
Total resource 
non-budget
2,556,662
-
2,556,662
2,059,428
-
2,059,428
497,234
2,051,250
Total 
83,189,685
95,712,927 178,902,612
81,890,106
94,960,063 176,850,169
1,299,579 172,731,185
Resource
Total capital
235,311
(54,500)
180,811
205,053
(80,199)
124,854
30,258
98,663
Total
83,424,996
95,658,427 179,083,423
82,095,159
94,879,864 176,975,023
1,329,837 172,829,848
SOPS note
2014-15
2014-15
2013-14
Outturn 
compared 
with 
Estimate: 
saving/
Estimate
Outturn
(excess)
Outturn
£000
£000
£000
£000
Net cash requirement 2014-15 core department
4
83,416,714
82,149,880
1,266,834
80,405,233
2014-15 
2014-15 
2013-14 
Estimate
Outturn
Outturn
£000
£000
£000
Administration costs 2014-15 departmental group
3.2
1,207,663
893,684
1,091,334
Explanations of variances between estimate and outturn are given on page 49.
The notes on pages 106 to 113 form part of this statement.
105
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Notes to the Statement of 
Parliamentary Supply
SOPS 1 . Statement of accounting policies 
The Statement of Parliamentary Supply and supporting notes have been prepared 
in accordance with the 2014-15 Government Financial Reporting Manual (FReM) 
issued by HM Treasury. The Statement of Parliamentary Supply accounting policies 
contained in the FReM are consistent with the requirements of the 2014-15 
Consolidated Budgeting Guidance and Supply Estimates Guidance Manual. 
Accounting convention 
The Statement of Parliamentary Supply and related notes are presented consistently 
with Treasury budget control and Supply Estimates. The aggregates across 
government are measured using National Accounts, prepared in accordance with the 
internationally agreed framework European System of Accounts (ESA95). ESA95 is 
in turn consistent with the System of National Accounts (SNA93), which is prepared 
under the auspices of the United Nations. 
The budgeting system and the consequential presentation of Supply Estimates, 
the Statement of Parliamentary Supply and related notes, have different objectives 
to accounts based on the International Financial Reporting Standards (IFRS). 
The budgeting system supports macro-economic stability by making sure public 
spending has parliamentary authority and is controlled in a way that supports the 
government’s fiscal framework. It gives departments incentives to manage spending 
well, and so provide high quality public services that offer value for money. 
The government’s objectives for fiscal policy are set out in the Charter for Budget 
Responsibility. These are to: 

ensure sustainable public finances that support confidence in the economy,
promote intergenerational fairness, and ensure the effectiveness of wider
government policy

support and improve the effectiveness of monetary policy in stabilising economic
fluctuations
Differences in accounting treatment
Many transactions are treated in the same way in the System of National 
Accounts and IFRS-based accounts. However, there are differences, as described 
below. In SOPS note 3.1 we compare our outturn as recorded in the Statement 
of Parliamentary Supply with the IFRS-based Statement of Comprehensive Net 
Expenditure.

Private Finance Initiatives and other service concession arrangements
The System of National Accounts basis for recognising service concession
arrangements is similar to the UK’s Generally Accepted Accounting Principles (UK
GAAP), as it applies a risk-based test to determine the financial reporting. IFRS-
based recognition of service concession arrangements (IFRIC 12) is determined
using control tests, which can lead to differences in whether it’s included in the
Statement of Financial Position.
106 Department for Work and Pensions Annual Report and Accounts 2014-15
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Capital grants
Our expenditur
Grant expenditure used for capital purposes is treated as capital in the
Statement of Parliamentary Supply. In accordance with the FReM, there is no
distinction between capital grants and other grants.  This is because they count
as an item of expenditure in the Consolidated Statement of Comprehensive Net
Expenditure.
e

Provisions - administration and programme expenditure
Under IFRS, provisions aren’t recognised as expenditure for National Account
purposes until the actual payment of cash (or accrual liability) is recognised.
To meet the requirements of both resource accounting and National Accounts
additional data entries are made in the Statement of Parliamentary Supply
across Annually Managed Expenditure (AME) and Departmental Expenditure
Limit (DEL) control totals, which do not affect the Statement of Comprehensive
Net Expenditure. Administration and programme expenditure reported in the
Statement of Parliamentary Supply will differ from that reported in the IFRS-
based accounts.

Social Fund
The expenditure of the Social Fund is recorded in the Statement of
Comprehensive Net Expenditure and is recorded in the Supply Estimate to make
sure Parliament can see our total AME budget provision.
However, legislation requires Parliament to vote the cash paid into the Social
Fund rather than the Social Fund expenditure.  As a result, the cash paid into
the Social Fund also has to be recorded in the Supply Estimate, as a non-
budget item. The Statement of Parliamentary Supply reflects these legislative
requirements.
Analysis of net resource outturn by section
The 2013-14 outturn is the original outturn against the 2013-14 Supply Estimate. 
We haven’t restated this to show changes that happened during 2014-15. The main 
change was that we moved Financial Assistance Scheme expenditure from DEL to 
AME.  We’ve restated the core tables on pages 181 to 193. These show trends and 
comparisons in expenditure over the last 6 years.
107
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SOPS 2. Analysis of net outturn
SOPS 2.1 Analysis of net resource outturn by section
2014-15
2013-14
Outturn
Estimate
Outturn 
Net total 
compared 
Administration
Programme
to 
Net total  Estimate, 
compared  adjusted 
to 
for 
Gross Income
Net
Gross
Income
Net
Total Net Total
Estimate Virements
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Spending in 
Departmental 
Expenditure 
Limit
Voted:
A Operational 
Delivery
112,340
(328) 112,012 1,753,562
(6,564) 1,746,998 1,859,010 1,615,839 (243,171)
2,630 2,403,562
B Child 
Maintenance 
Group
80,479
(254) 80,225
254,831
(3,188) 251,643
331,868
330,682
(1,186)
-
462,776
C Health 
and Safety 
Executive (Net)
83,030
-
83,030
56,317
-
56,317
139,347
139,474
127
-
155,345
D European 
Social Fund
-
-
-
281,781 (281,650)
131
131
191
60
-
(3,228)
E Executive 
Non-
Departmental 
Public Bodies 
(Net)
18,728
-
18,728
329,538
-
329,538
348,266
355,175
6,909
-
354,103
F Employment 
Programmes
-
-
-
967,638
(17,443) 950,195
950,195
953,006
2,811
- 1,037,286
G Support 
for Local 
Authorities
-
-
-
536,376
-
536,376
536,376
523,052
(13,324)
-
643,929
H Other 
Programmes
-
-
-
317,510
(61,963) 255,547
255,547
225,202
(30,345)
-
62,225
I Departmental 
operating costs 637,688 (37,999) 599,689 1,641,460
(90,744) 1,550,716 2,150,405 2,494,637
344,232
63,483 1,477,765
Financial 
Assistance 
Scheme
-
-
-
-
-
-
-
-
-
-
153,470
932,265 (38,581) 893,684 6,139,013 (461,552) 5,677,461 6,571,145 6,637,258
66,113
66,113 6,747,233
Non-voted:
J National 
Insurance Fund 
-
-
-
547,403
-
547,403
547,403
547,403
-
-
611,379
K Expenditure 
incurred by the 
Social Fund 
-
-
-
33,420
-
33,420
33,420
34,162
742
742
-
L Consolidated 
Fund Extra 
Receipts 
-
-
-
-
-
-
-
(1,995)
(1,995)
(1,995)
-
-
-
-
580,823
-
580,823
580,823
579,570
(1,253)
(1,253)
611,379
108 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
2014-15
2013-14
Outturn
Estimate
Outturn 
Net total 
compared 
Administration
Programme
to 
Net total  Estimate, 
e
compared  adjusted 
to 
for 
Gross Income
Net
Gross
Income
Net
Total
Net total Estimate Virements
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Annually 
Managed 
Expenditure
Voted:
M Severe 
Disablement 
Allowance
-
-
-
735,167
-
735,167
735,167
750,562
15,395
15,395
859,728
N Industrial 
Injuries Benefit 
Scheme
-
-
-
907,808
-
907,808
907,808
911,868
4,060
4,060
900,692
O Universal 
Credit
-
-
-
56,151
-
56,151
56,151
129,729
73,578
73,578
5,861
P Jobseeker’s 
Allowance
-
-
- 2,698,206
(2,376) 2,695,830 2,695,830 2,693,412
(2,418)
-
3,811,521
Q Employment 
and Support 
Allowance
-
-
- 8,726,473
(8) 8,726,465 8,726,465 8,635,221
(91,244)
-
6,897,958
R Income 
Support
-
-
- 2,908,343
(14,865) 2,893,478 2,893,478 2,996,220
102,742
102,742
3,582,670
S Pension 
Credit
-
-
- 6,576,079
- 6,576,079 6,576,079 6,657,080
81,001
81,001
7,041,522
T Financial 
Assistance 
Scheme
-
-
-
688,416
-
688,416
688,416
675,228
(13,188)
-
284,336
U TV Licences 
for the over 
75s
-
-
-
611,939
-
611,939
611,939
636,861
24,922
24,922
606,395
V Attendance 
Allowance
-
-
- 5,421,774
- 5,421,774 5,421,774 5,447,843
26,069
26,069
5,360,075
W Personal 
Independence 
Payment
-
-
- 1,570,631
- 1,570,631 1,570,631 1,649,900
79,269
79,269
165,304
X Disability 
Living 
Allowance
-
-
- 13,798,262
- 13,798,262 13,798,262 13,777,756
(20,506)
- 13,762,514
Y Carer’s 
Allowance
-
-
- 2,319,211
- 2,319,211 2,319,211 2,292,275
(26,936)
-
2,088,265
Z Housing 
Benefit
-
-
- 17,897,961
- 17,897,961 17,897,961 18,318,643
420,682
265,775 17,883,096
AA Rent 
Rebates
-
-
- 5,843,842
- 5,843,842 5,843,842 5,904,204
60,362
60,362
5,817,409
AB Statutory 
Sick Pay and 
Statutory 
Maternity Pay
-
-
- 2,390,969
- 2,390,969 2,390,969 2,393,000
2,031
2,031
2,258,201
AC Other 
benefits
-
-
-
139,811
-
139,811
139,811
140,148
337
337
471,356
AD Other 
expenditure
-
-
-
(13,359)
-
(13,359)
(13,359)
(13,974)
(615)
-
11,406
AE Other 
expenditure 
ENDPBs (Net)
-
-
-
(902)
-
(902)
(902)
(211)
691
691
(1,623)
-
-
- 73,276,782 (17,249) 73,259,533 73,259,533 73,995,765
736,232
736,232 71,806,686
109
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2014-15
2013-14
Outturn
Estimate
Outturn 
Administration
Programme
Net total 
compared 
to 
Net total  Estimate, 
compared  adjusted 
to 
for 
Gross Income
Net
Gross
Income
Net
Total
Net total
Estimate Virements
Total
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
£000
Annually 
Managed 
Expenditure
Non-voted:
AF 
Incapacity 
Benefit
-
-
-
244,529
-
244,529
244,529
247,422
2,893
2,893
1,186,804
AG 
Jobseeker’s 
Allowance
-
-
-
369,222
(12)
369,210
369,210
382,934
13,724
13,724
526,695
AH 
Employment 
and Support 
Allowance
-
-
-
4,100,919
-
4,100,919
4,100,919
4,134,117
33,198
33,198
3,538,882
AI Maternity 
Allowance
-
-
-
416,557
-
416,557
416,557
416,052
(505)
(505)
399,993
AJ State 
Pension
-
-
-
86,552,310
-
86,552,310
86,552,310
86,721,357
169,047
169,047
83,137,207
AK 
Bereavement 
benefits
-
-
-
570,666
-
570,666
570,666
562,682
(7,984)
(7,984)
582,231
AL 
Expenditure 
incurred by 
the Social 
Fund
-
-
-
2,125,049
-
2,125,049
2,125,049
2,668,793
543,744
543,744
2,142,825
-
-
-
94,379,252
(12)
94,379,240
94,379,240
95,133,357
754,117  
754,117
91,514,637
Non-budget 
resource 
Voted:
AM Cash 
paid into the 
Social Fund
-
-
-
2,059,428
-
2,059,428
2,059,428
2,556,662
497,234
497,234
2,051,250
-
-
-
2,059,428
-
2,059,428
2,059,428
2,556,662
497,234
497,234
2,051,250
Total 
resource
932,265
(38,581)
893,684 176,435,298
(478,813) 175,956,485 176,850,169 178,902,612
2,052,443
2,052,443 172,731,185
110 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
SOPS 2.2 Analysis of net capital outturn by section
2014-15
2013-14
Outturn
Estimate
Outturn 
Net total 
compared 
e
to 
Net total  Estimate, 
compared 
adjusted 
to 
for  
Gross
Income
Net
Net
Estimate Virements
Net
£000
£000
£000
£000
£000
£000
£000
Spending in Departmental Expenditure Limit
Voted:
A Operational Delivery
1,560
-
1,560
1,050
(510)
-
233
B Child Maintenance Group
9,946
-
9,946
10,365
419
419
14,987
C Health and Safety Executive (Net)
4,194
-
4,194
5,281
1,087
1,087
5,108
E Executive Non-Departmental Public Bodies (Net)
2,697
-
2,697
2,759
62
62
2,592
F Employment Programmes
(121)
(3,970)
(4,091)
(3,158)
933
933
5,515
H Other programmes
95,830
(2,000)
93,830
82,270
(11,560)
-
60,000
I Departmental operating costs
98,202
(1,285)
96,917
136,744
39,827
27,757
97,248
Total
212,308
(7,255)
205,053
235,311
30,258
30,258
185,683
Non-Voted:
K Expenditure incurred by the Social Fund
44,165
-
44,165        45,500
1,335
1,335
-
Total
44,165
-
44,165
45,500
1,335
1,335
-
Spending in Annually Managed Expenditure
Voted:
N Industrial Injuries Benefit Scheme
-
-
-
-
-
-
4
O Universal Credit
-
-
-
-
-
-
669
P Jobseeker’s Allowance
-
-
-
-
-
-
997
Q Employment and Support Allowance
-
-
-
-
-
-
84
R Income Support
-
-
-
-
-
-
58
S Pension Credit
-
-
-
-
-
-
3
-
-
-
-
-
-
1,815
Non-Voted:
AG Jobseeker’s Allowance
-
-
-
-
-
-
2
AL Expenditure incurred by the Social Fund
(124,364)
-
(124,364)
(100,000)
24,364
24,364
(88,837)
(124,364)
-
(124,364) (100,000)
24,364
24,364
(88,835)
Total
132,109
(7,255)
124,854
180,811
55,957
55,957
98,663
111
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SOPS 3 . Reconciliation of outturn to net operating 
cost and against administration budget
SOPS 3.1 Reconciliation of net resource outturn to    
 
 
net operating cost
2014-15 Outturn 2013-14 Outturn
SOPS 
£000
£000
Budget
174,790,741
170,679,935
Non-budget
2,059,428
2,051,250
Total resource
2.1
176,850,169
172,731,185
Add:
Capital grants
(1,453)
3
PFI Adjustment
27,424
22,908
Other
-
698
176,876,140
172,754,794
Less:
Income payable to the 
consolidated fund
5
(12,083)
(10,118)
Cash paid to the Social Fund 
- Voted Non-Budget
(2,059,428)
(2,051,250)
Net operating costs in Consolidated Statement
of Comprehensive Net Expenditure
174,804,629
170,693,426
SOPS 3.2 Reconciliation of administration outturn against final 
administration budget and administration net operating costs
2014-15
2013-14
SOPS 
£000
£000
Administration budget - estimate
1,207,663
1,275,939
1,207,663
1,275,939
Gross administration costs
2.1
932,265
1,167,380
Gross income relating to administration costs
2.1
(38,581)
(76,046)
Administration - net outturn
2.1
893,684
1,091,334
Reconciliation to operating costs:
Add: PFI adjustment
2,623
108,042
Less: other
(5,973)
(3,661)
Administration net operating costs
890,334
1,195,715
112 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
SOPS 4 . Reconciliation of net resource outturn    
to net cash requirement
2014-15
Net total outturn 
e
compared with 
Estimate:  
Estimate
Outturn
saving/(excess)
SOPS 
£000
£000
£000
Net resource outturn
2.1
178,902,612
176,850,169
2,052,443
Capital:
    Adjustment for capital items
2.2
180,811
124,854
55,957
Accruals adjustments
    Non-cash items
(1,225,910)
(1,184,176)
(41,734)
    Changes in working capital other than cash
1,000,000
1,057,514
(57,514)
    Utilisation of provisions
200,021
183,699
16,322
Adjustments for Arm’s length bodies 
    Voted resource and capital
(502,478)
(493,602)
(8,876)
    Cash grant in aid
520,085
491,286
28,799
    
    Adjustment for non-voted budget
(95,658,427)
(94,879,864)
(778,563)
Net cash requirement of core department
83,416,714
82,149,880
1,266,834
SOPS 5 . Income and excess funds payable to the 
consolidated fund
In addition to income we retain, we received the following income which is payable 
to the consolidated fund (cash receipts being shown in italics):
Outturn 2014-15
Outturn 2013-14
Income
Receipts
Income
Receipts
£000
£000
£000
£000
Income outside the ambit of the estimate
12,083
4,155
10,118
7,915
Repayment to the consolidated fund
150,000
150,000
114,000
114,000
Total income payable to the consolidated fund
162,083
154,155
124,118
121,915
Consolidated fund income shown above does not include any amounts we collect 
from the Financial Assistance Scheme while acting as agent for the consolidated 
fund rather than as principal. Full details of income collected as agent for the 
consolidated fund are in our Trust Statement, page 166.
113
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Financial Statements
for the year ended 31 March 2015
These financial statements present the operating costs and financial position of the 
Department for Work and Pensions for the year ended 31 March 2015.
In addition to our functions of paying benefits for welfare and pensions, our accounts 
include the following areas of spending:
Social Fund 
We are responsible for the Social Fund which is used to make grants and repayable 
loans to individuals. It makes regulated payments of Funeral Expenses Payments, 
Sure Start Maternity Grants, Winter Fuel Payments and Cold Weather Payments plus 
discretionary payments for Budgeting Loans. 
National Insurance Fund
HM Revenue and Customs is responsible for the National Insurance Fund (NIF). 
However, we administer the contributory benefits funded from the NIF on HM 
Revenue and Customs’ behalf. We include these in our Statement of Comprehensive 
Net Expenditure. We recover these contributory benefit payments, together with the 
associated costs of administration, from the NIF.
European Social Fund
The European Social Fund is one of the European Union structural funds designed 
to strengthen economic and social cohesion. It helps unemployed and socially 
excluded people find work or become more employable. It can also be used to help 
prevent people in work from becoming unemployed.
Other programme expenditure 
This includes all non-contributory benefit plus miscellaneous grants and 
compensation payments. It also includes subsidies paid by grants to local authorities 
that administer and pay Housing Benefit.
Our arm’s length bodies are shown in ‘Our controls’ on page 56. They are all 
administered separately from the department and they produce their own annual 
reports and accounts. 
Financial Assistance Scheme Trust Statement
Further regulations came into force on 2 April 2010 for the Financial Assistance 
Scheme (FAS). This allows assets that remain in qualifying schemes to transfer to the 
government. We have prepared a Trust Statement for the revenue associated with 
asset transfers from FAS qualifying schemes. We’ve published the Trust Statement 
alongside this Annual Report and Accounts at page 166.    
The Accounting Officer authorised these financial statements for issue 
on 10 July 2015.
114 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
Consolidated Statement of     
Comprehensive Net Expenditure
for the year to 31 March 2015
e
The notes on pages 120 to 165 form part of these accounts.
2014-15
2013-14
Departmental 
Departmental 
Core Department
Group Core Department
Group
Note
£000
£000
£000
£000
Administration costs
    Staff costs
3
401,167
455,320
422,163
473,548
    Other costs
4
430,783
508,638
728,459
818,837
    Income
10
(45,755)
(73,624)
(76,297)
(96,670)
Programme expenditure
    Staff costs
3
2,189,929
2,316,241
2,351,722
2,513,319
    Other costs
5
171,890,818
172,200,091
167,092,510
167,421,548
    Income
10
(548,383)
(602,037)
(332,908)
(437,156)
Grant in aid to arm’s length bodies
8
491,286
-
510,926
-
Net operating costs
174,809,845
174,804,629
170,696,575
170,693,426
Total expenditure
175,403,983
175,480,290
171,105,780
171,227,252
Total income
10
(594,138)
(675,661)
(409,205)
(533,826)
Transfer of ALB’s net assets
30
-
11,281
-
-
Net costs for the year
174,809,845
174,815,910
170,696,575
170,693,426
Other comprehensive net expenditure:
Items that will not be reclassified to net 
operating costs
Net (gain)/loss on:
    revaluation of property, plant and equipment
(25,909)
(22,587)
(27,662)
(29,761)
    revaluation of intangibles
(45,662)
(45,662)
(10,271)
(10,267)
    actuarial loss on pensions
-
-
-
107
Items that may be reclassified subsequently to 
net operating costs
Net loss/(gain) on:
     revaluation of available-for-sale financial 
assets
(638)
(638)
1,956
1,956
Total comprehensive net expenditure 
174,737,636
174,747,023
170,660,598
170,655,461
All income and expenditure is derived from continuing operations.
115
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Consolidated Statement of 
Financial Position
as at 31 March 2015
The notes on pages 120 to 165 form part of these accounts.
31 March 2015
31 March 2014
Departmental 
Departmental 
Core Department
Group Core Department
Group
Note
£000
£000
£000
£000
Non-current assets:
    Property, plant and equipment
11
524,588
613,921
608,007
703,418
    Intangible assets
12
559,305
563,516
605,592
608,572
    Financial assets
14
401,304
401,304
312,432
312,432
    Trade and other receivables
20
1,484,302
1,485,560
1,399,957
1,400,935
Total non-current assets
2,969,499
3,064,301
2,925,988
3,025,357
Current assets:
    Inventories
-
717
-
876
    Assets classified as held for sale
22
11,919
11,919
-
-
    Trade and other receivables
20
3,816,995
3,851,158
2,136,360
2,181,369
    Cash and cash equivalents
19
136,689
147,791
256,064
262,337
Total current assets
3,965,603
4,011,585
2,392,424
2,444,582
Total assets
6,935,102
7,075,886
5,318,412
5,469,939
Current liabilities:
    Trade and other payables
21
(5,458,193)
(5,512,171)
(4,198,201)
(4,251,406)
    Provisions
23
(247,170)
(247,325)
(122,712)
(122,856)
Total current liabilities
(5,705,363)
(5,759,496)
(4,320,913)
(4,374,262)
Total assets less current liabilities
1,229,739
1,316,390
997,499
1,095,677
Non-current liabilities:
    Provisions
23
(4,608,503)
(4,610,464)
(4,124,814)
(4,126,757)
    Other payables
21
(484,593)
(584,725)
(593,181)
(695,471)
Total non-current liabilities
(5,093,096)
(5,195,189)
(4,717,995)
(4,822,228)
Assets less liabilities
(3,863,357)
(3,878,799)
(3,720,496)
(3,726,551)
Taxpayers’ equity and other reserves:
    General fund
(4,089,724)
(4,112,365)
(3,940,874)
(3,957,720)
    Revaluation reserve
226,367
233,566
220,378
231,169
Total equity
(3,863,357)
(3,878,799)
(3,720,496)
(3,726,551)
Robert Devereux
Accounting Officer
10 July 2015
116 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
Consolidated 
Statement       
of Cash Flows
for the year ended 31 March 2015
e
The notes on pages 120 to 165 form part of these accounts.
31 March 2015
31 March 2014
Departmental 
Departmental 
Core Department
Group Core Department
Group
Note
£000
£000
£000
£000
Cash flows from operating activities
    Net cost for the year
(174,809,845)
(174,815,910)
(170,696,575)
(170,693,426)
    Adjustments for non-cash transactions
904,642
913,760
659,227
669,118
     (Increase)/decrease in trade and other receivables
(1,764,980)
(1,754,414)
565,730
561,882
     Movements in receivables relating to items not 
passing through the Statement of Comprehensive 
Net Expenditure
750,172
748,868
(395,444)
(396,907)
    Decrease in inventories
-
159
-
225
    (Decrease)/increase in trade and other payables
21
(968,469)
(969,492)
289,396
294,601
     Movements in payables relating to items not passing 
through the Statement of Comprehensive Net 
Expenditure
275,414
278,472
(34,588)
(33,409)
     Utilisation of provisions
23
(183,797)
(184,774)
(154,895)
(155,214)
Net cash outflow from operating activities
(175,796,863)
(175,783,331)
(169,767,149)
(169,753,130)
Cash flows from investing activities
    Purchase of property, plant and equipment
11b
(15,781)
(19,973)
(5,332)
(12,246)
    Purchase of intangible assets
12d
(67,967)
(70,643)
(114,569)
(115,745)
     Proceeds of disposal of property, plant and 
equipment
-
277
1,845
2,173
    Loans to other bodies
(95,709)
(95,709)
 (65,512)
 (65,512)
    Repayment of loans
6,070
6,070
293
293
Net cash outflow from investing activities
(173,387)
(179,978)
(183,275)
(191,037)
Cash flows from financing activities
     From the consolidated fund (supply) current year
81,409,754
81,409,754
80,564,082
80,564,082
    From the consolidated fund (supply) prior year
-
-
512,955
512,955
     Net financing from the National Insurance Fund
92,602,203
92,602,203
89,662,379
89,662,379
    Advances from the contingencies fund
549
549
1,534
1,534
    Repayments to the contingencies fund
(1,533)
(1,533)
(550)
(550)
     Capital element of payments in respect of finance 
leases and on-Statement of Financial Position PFI 
contracts
(121,172)
(122,922)
(124,527)
(126,075)
Net financing
173,889,801
173,888,051
170,615,873
170,614,325
Net (decrease)/increase in cash and cash 
equivalents in the period before adjustment for 
receipts and payments to the consolidated fund
(2,080,449)
(2,075,258)
665,449
670,158
     Payments of amounts due to the consolidated fund
(158,799)
(158,799)
(116,851)
(116,851)
Net (decrease)/increase in cash and cash 
equivalents in the period after adjustment for 
receipts and payments to the consolidated fund
19
(2,239,248)
(2,234,057)
548,598
553,307
Cash and cash equivalents at the beginning of the 
period
19
208,879
214,790
(339,719)
(338,517)
Cash and cash equivalents at the end of the period
19
(2,030,369)
(2,019,267)
208,879
214,790
117
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Consolidated 
Statement 
of Changes in Taxpayers’ Equity
for the year ended 31 March 2015
The notes on pages 120 to 165 form part of these accounts.
General Fund
Revaluation Reserve
Total Reserves
Core  Departmental 
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Department
Group
Note
£000
£000
£000
£000
£000
£000
Balance at 31 March 2013
(3,249,671)
(3,269,673)
243,267
252,064
(3,006,404)
(3,017,609)
Net parliamentary funding drawn 
down (current year)
80,564,082
80,564,082
-
-
80,564,082
80,564,082
Repayments to the consolidated fund
(114,000)
(114,000)
-
-
(114,000)
(114,000)
Net parliamentary funding drawn 
down (prior year)
512,955
512,955
-
-
512,955
512,955
Funding from National Insurance Fund
89,662,379
89,662,379
-
-
89,662,379
89,662,379
Supply payable adjustment
21(i)
(158,849)
(158,849)
-
-
(158,849)
(158,849)
Supply receivable previous year 
clearance
(512,955)
(512,955)
-
-
(512,955)
(512,955)
CFERs payable to the consolidated 
fund
SOPS5
(10,118)
(10,118)
-
-
(10,118)
(10,118)
Advances from the contingencies fund
1,534
1,534
-
-
1,534
1,534
Repayments to the contingencies fund
(550)
(550)
-
-
(550)
(550)
Contingencies fund payable – current 
year
(984)
(984)
-
-
(984)
(984)
Net costs for the year
(170,696,575) (170,693,426)
-
- (170,696,575) (170,693,426)
Non-cash adjustments
     Non-cash charges – Auditor’s 
remuneration
4
2,138
2,138
-
-
2,138
2,138
Actuarial loss on pension
-
(107)
-
-
-
(107)
Movements in reserves
     Recognised in Statement of 
Comprehensive Net Expenditure
-
-
35,977
38,072
35,977
38,072
Transfers between reserves
58,866
58,967
(58,866)
(58,967)
-
-
Other
874
887
-
-
874
887
Balance at 31 March 2014
(3,940,874)
(3,957,720)
220,378
231,169
(3,720,496)
(3,726,551)
Net parliamentary funding drawn 
down (current year)
81,409,754
81,409,754
-
-
81,409,754
81,409,754
Repayments to the consolidated fund
(150,000)
(150,000)
-
-
(150,000)
(150,000)
Net parliamentary funding - deemed
158,849
158,849
-
-
158,849
158,849
Funding from National Insurance Fund
92,602,203
92,602,203
-
-
92,602,203
92,602,203
Supply receivable adjustment
20(i)
581,277
581,277
-
-
581,277
581,277
CFERs payable to the consolidated 
fund
SOPS5
(12,083)
(12,083)
-
-
(12,083)
(12,083)
Advances from the  
contingencies fund (prior year)
984
984
-
-
984
984
Advances from the contingencies fund
549
549
-
-
549
549
Repayments to the contingencies fund
(1,533)
(1,533)
-
-
(1,533)
(1,533)
Comprehensive net cost for the year
(174,809,845) (174,815,910)
-
- (174,809,845) (174,815,910)
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Our expenditur
General Fund
Revaluation Reserve
Total Reserves
Core  Departmental 
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Department
Group
Note
£000
£000
£000
£000
£000
£000
Non-cash adjustments
e
     Non-cash charges – Auditor’s 
remuneration
4
1,797
1,797
-
-
1,797
1,797
Movement in reserves
     Recognised in Statement of 
Comprehensive Expenditure
-
-
72,209
68,887
72,209
68,887
Transfers between reserves
66,220
66,490
(66,220)
(66,490)
-
-
Other
2,978
2,978
-
-
2,978
2,978
Balance at 31 March 2015
(4,089,724)
(4,112,365)
226,367
233,566
(3,863,357)
(3,878,799)
a. The general fund represents the total assets less liabilities of the entities within 
the accounting boundary, to the extent that the total is not represented by other 
reserves and financing items.
b. The revaluation reserve reflects the unrealised element of the cumulative balance 
of indexation and revaluation adjustments.
c. The amount of the revaluation reserve relating to intangible assets is:
Restated 
2014-15 
2013-14 
Total
Total
£000
£000
Balance at 1 April
(16,113)
(13,055)
Net change in revaluation reserve
(33,138)
(3,058)
Balance at 31 March
(49,251)
(16,113)
d. We make two kinds of transfer between reserves:
•  each year, the realised element of the revaluation reserve (in other words, an 
amount equal to the excess of the actual depreciation over depreciation based 
on the historical cost of revalued assets) is transferred from the reserve to the 
general fund 
•  when we dispose of a revalued asset, the balance on the revaluation reserve for 
that asset becomes fully realised and is transferred to the general fund
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Notes to the Departmental Accounts
1 . Statement of accounting policies
1.1 Basis of preparation and statement of compliance  
These financial statements have been prepared in accordance with the 2014-
15 Government Financial Reporting Manual (FReM) issued by HM Treasury. The 
accounting policies in the FReM apply International Financial Reporting Standards 
(IFRS) as adapted or interpreted for the public sector.
Where the FReM lets us choose an accounting policy, we’ve picked the one that we 
think is the most appropriate to our circumstances and for the purpose of giving a 
true and fair view. The policies we’ve adopted are set out below. We’ve applied them 
consistently in dealing with items that we consider are material to the accounts. 
As well as preparing the primary statements under IFRS, we are required under 
the FReM to prepare the Statement of Parliamentary Supply. This statement and 
supporting notes are detailed on pages 105 to 113 and show outturn against 
Estimate in terms of our net resource requirement and net cash requirement. 
1.2 Accounting standards, interpretations and amendments 
We have adopted all IFRS, International Accounting Standards (IAS), International 
Financial Reporting Interpretations Committee (IFRIC) interpretations and 
amendments to published standards that were effective at 31 March 2015. We’ve 
also taken into account the specific interpretations and adaptations included in the 
FReM. This includes the following adoptions effective from 1 April 2014:

IFRS 10 Consolidated Financial Statements

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investments in Associates
We haven’t adopted IFRS 13 Fair Value Measurement. That’s because it’s only 
effective from 1 April 2015 and we haven’t decided to adopt it early. We plan to 
assess its impact on our financial statements and those of our arm’s length bodies.
1.3 Accounting convention 
We have prepared these financial statements under the historical cost convention 
modified to account for the revaluation of property, plant and equipment, intangible 
assets, inventories and some financial assets and liabilities.
1.4 Basis of consolidation
These statements cover the whole departmental group. By this, we mean the core 
department, which is supply financed, plus all of our arm’s length bodies that fall 
within the departmental boundary (as shown on page 56 in ‘Our controls’). We’ve 
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eliminated all transactions between entities included in this consolidation.
Our expenditur
1.5 Areas of judgement and estimation techniques 
In preparing the financial statements we have to make judgements, estimates and 
e
assumptions that affect the application of policies and reported amounts of our 
assets and liabilities, income and expenditure. These are based on historical and 
other factors we think are reasonable, and we review our estimates and underlying 
assumptions regularly. Areas of judgement include non-current asset revaluations, 
depreciation and amortisation periods, provisions, early departure costs and 
impairment. 
The policies below highlight areas that involve a high degree of judgement or 
complexity, and areas where the assumptions and estimates are significant to the 
financial statements.
Impairment of benefit receivables
We review benefit receivables annually for impairment. The impairment calculation 
looks at prior-year recoveries and write-offs arising in the current year. It uses these 
to project the amounts that will be recovered in the next 15 years. Recoveries and 
write-offs are analysed by the age of the debt they relate to. We use this analysis to 
estimate the value of recoveries in future periods, before discounting it to its present 
value.
Financial Assistance Scheme
For the Financial Assistance Scheme, we estimate the net present value of the likely 
assistance payments. Our estimate is based on an actuarial model of likely caseload. 
This estimate is uncertain and may need adjustment in a later year of account once 
actual caseloads are known. 
European Social Fund 
We make payments from the European Social Fund to applicants. Until a declaration 
is received from an applicant, we cannot accurately quantify our liabilities and 
related accrued income. We calculate an estimate at the end of the year based on 
a comparison of the agreed spend profiles provided by the applicants and payments 
made to date. However, the calculation is uncertain and may need adjustment in a 
subsequent year of account.
Departmental estimation of Statutory Sick Pay and Statutory Maternity Pay
Figures disclosed for these benefits are amounts paid to the National Insurance Fund 
for expected recoveries of these benefits. The estimate is produced using information 
on past recoveries. The 2014-15 and comparative year estimate calculations have 
been sourced from the Government Actuary’s Department. The most recent year 
for which full data is available for Statutory Sick Pay and Statutory Maternity Pay is 
2012-13. We generate our estimates by projecting the total from that year forward 
to arrive at a value for the current year. In doing this, we allow for the changes that 
have occurred since 2012-13.
1.6 Administration and programme expenditure
The Statement of Comprehensive Net Expenditure is analysed between 
administration and programme income and expenditure. The classification of 
expenditure and income as administration or programme follows the definition set 
out in the FReM.
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Administration costs reflect our running costs by covering the costs of all 
administration except for direct frontline service provision. 
Programme costs include costs directly associated with frontline service delivery, 
including contributory benefit expenditure funded from the National Insurance Fund, 
expenditure that is within the Supply Process and payment of grants.
1.7 Foreign currency translation
These financial statements are prepared in pounds sterling, which is our functional 
currency. Foreign currency transactions are accounted for in accordance with IAS 
21 (The Effects of Changes in Foreign Exchange Rates). European Social Fund claims 
made to the European Union (EU) are calculated using the monthly exchange rate 
published by the EU. Balances relating to the European Social Fund and which are 
denominated in a foreign currency are translated into pounds sterling using the 
month end exchange rate. We recognise foreign exchange gains and losses resulting 
from such transactions in the Statement of Comprehensive Net Expenditure.
1.8 Operating income
Operating income comprises mainly fees and charges for services provided on a full-
cost basis to external customers, as well as public repayment work and other income 
such as that from investments. It includes both income that we retain and income 
that we surrender to the consolidated fund. All income is treated as operating 
income in accordance with the FReM and is stated net of VAT.
1.9 Revenue recognition
We comply with IAS 18 (Revenue) for income streams and recognise revenue when 
earned.  For the European Social Fund, where we act as an agent, we recognise 
income in the accounting periods in which the EU-sponsored projects are funded.
1.10 Property, plant and equipment
Property, plant and equipment are stated at fair value. However, as permitted by the 
FReM, we have adopted a depreciated historical cost basis as a proxy for fair value 
where non-property assets have a short useful life or are of relatively low value. This 
applies to most IT hardware, motor vehicles, plant and machinery and furniture and 
fittings. 
Assets are capitalised where they have an expected useful life of more than one year 
and where the original cost of the item exceeds the capitalisation threshold. Where 
appropriate, items are pooled. The following thresholds apply: 
leasehold improvements   £100,000
other tangible assets  
£5,000
information technology  
£1,000   
 
All expenditure on repairs and maintenance is charged to the Statement of 
Comprehensive Net Expenditure during the financial period it’s incurred in.
1.11 Land and buildings  
We measure land and buildings initially at cost, restated to current value using 
external professional valuations. This is in accordance with IAS 16 (Property, Plant 
and Equipment), as interpreted by the FReM. We do this at least every 5 years. In 
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the intervening years we use published indices appropriate to the type of land or 
Our expenditur
building. 
We value most land and buildings on an existing-use basis. The exception is the 
specialist laboratory site owned by the Health and Safety Executive, which we’ve 
included at depreciated replacement cost. 
e
Spending on major refurbishment and improvement of properties is capitalised and 
reported as land and buildings or leasehold improvements, depending on its nature. 
This is appropriate because the expenditure provides a long-term continuing benefit.
The following independent valuations have been performed on land and buildings:
Estate
Valuations performed by
Date of valuation
DWP Estate
DVS Valuation Office Agency
31 March 2015
HSE Redgrave Court
DTZ
31 December 2014
HSE Buxton
DTZ
31 March 2015
HSE Carlisle
DTZ
31 December 2013
In each case, the valuations were performed on a fair-value basis by members of 
the Royal Institution of Chartered Surveyors, in accordance with their Appraisal and 
Valuation Standards.
Leasehold land is depreciated in order to write-off the value of land held under the 
PRIME finance lease arrangement over the remaining period of the PRIME contract. 
1.12 Intangible assets
Whether we acquire intangible assets externally or generate them internally we 
measure them initially at cost, with subsequent measurement at fair value. Where 
an active market exists for the asset, it is carried at a revalued amount based on 
market value at the end of the reporting period.  Where no active market exists we 
revalue assets using appropriate indices to indicate depreciated replacement cost as 
an alternative for fair value. 
We revalue internally developed software and software licences using the most 
recent Office for National Statistics published indices.
Purchased software licences
We capitalise software licences and applications at cost as intangible assets if they 
are in use for more than one year and cost more than £1,000. We later revalue these 
using appropriate indices as a proxy for fair value. As we own so many software 
licences, we account for them on a pooled basis.
Spending on annual software licences is charged to the Statement of Comprehensive 
Net Expenditure.
Internally developed software
We capitalise internally developed software if it meets the criteria in IAS 38 
(Intangible Assets). We classify development costs as assets under the course of 
construction until the asset is available for use.  At that point we transfer it to the 
relevant asset class.  
Website development costs
We capitalise website development costs in line with the requirements of SIC 32 
(Intangible assets - Web Site Costs).
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1.13 Depreciation and amortisation
We charge depreciation on property, plant and equipment and calculate 
amortisation on intangible assets with a finite life using the straight-line method 
to reflect the consumption of economic benefits. A recent change to HM Treasury’s 
Consolidated Budgeting Guidance means that depreciation/amortisation is now 
charged to either administration or programme costs in accordance with how the 
associated assets are being used. 
Depreciation
No depreciation is charged on freehold land. Estimated useful asset lives are within 
these ranges: 
Freehold buildings
The shorter of 50 years or remaining life as assessed by valuers
Leasehold land and buildings
Period remaining on lease or to next rent review
Health and Safety Executive/
60 years designated life
Health and Safety Laboratory 
Private Finance Initiative 
leasehold buildings
Leasehold improvements
Period remaining on lease (up to 20 years)
Information technology
2 to 9 years
Plant and machinery
5 to 10 years
Furniture and fittings
2 to 15 years
Motor vehicles
3 to 10 years
Amortisation 
Purchased software licences
Shorter of licence period or 5 years
Internally developed software 2 to 15 years
Websites
5 years
1.14 Impairment of non-current assets 
In accordance with the FReM, we take impairment losses that result from a clear 
consumption of economic benefit directly to the Statement of Comprehensive 
Net Expenditure. We debit other impairment losses to the revaluation reserve up 
to the level of depreciated historic cost, and take any excess to the Statement of 
Comprehensive Net Expenditure. Where the impairment relates to a previously 
revalued asset, the balance on the revaluation reserve that the impairment would 
have been charged to is transferred to the general fund to ensure consistency with 
IAS 36 (Impairment of Assets). 
We review all non-current assets and assets under the course of construction 
annually for impairment.
1.15 Financial assets and liabilities
In line with IAS 39 (Financial Instruments), we recognise financial assets and 
liabilities when we become party to the contracts that give rise to them. Our policy is 
not to trade in financial instruments.
Loans and receivables
The fair value of trade receivables is usually the original invoiced amount.  We 
recognise any changes in value in the Statement of Comprehensive Net Expenditure.  
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, short term deposits with an 
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initial maturity of 3 months or less and current balances with banks and similar 
Our expenditur
institutions. For the purpose of the Consolidated Statement of Cash Flows, cash and 
cash equivalents are as previously defined net of outstanding bank overdrafts and 
encashment control balances. We include bank overdrafts in current liabilities in the 
Statement of Financial Position.
e
Available-for-sale financial assets
We recognise available for sale financial assets at fair value. We recognise unrealised 
gains and losses arising from changes in fair value initially in the Consolidated 
Statement of Changes in Taxpayers’ Equity. Upon sale, the cumulative gain or loss is 
transferred to the Statement of Comprehensive Net Expenditure.
Impairment of financial assets
At the end of the reporting period we assess whether there is objective evidence 
that financial assets are impaired as a result of events that occurred after the initial 
recognition of the asset and before the end of the reporting period. For the purposes 
of a collective evaluation of impairment, we group financial assets where they are 
not individually significant.  We do this on the basis of similar risk characteristics, 
taking into account the type of instrument and other relevant factors.  
1.16 Overpayment receivables
We seek to recover all overpayments unless it would cause financial hardship 
or wouldn’t be cost-effective. Where recovery isn’t cost-effective we write off 
overpayments – with the exception of fraud cases and direct payments after death.
We recognise receivables in the accounts when there is a legal basis to seek recovery. 
Benefit receivables recognised in the Statement of Financial Position are valued at 
the difference between the amount the customer has been paid and what they 
should have been paid, less any impairment of these receivables.  
We do not recognise certain categories of identified benefit overpayment as 
receivables, including:

those due to official error where there is no statutory right of recovery

cases satisfying Secretary of State waiver policies

 where the customer  has died and the estate isn’t large enough to recover the
overpayment
We periodically review the quality and consistency of write-off decision-making. Our 
write-off policy has been agreed with HM Treasury.
The Social Fund scheme administers awards that can be either recoverable or non-
recoverable.  Recoverable loans are automatically recorded as receivables.
Non-recoverable Social Fund grants are only available to claimants with appropriate 
qualifying benefits. However, if an individual’s qualifying benefit is withdrawn (for 
example, because of claimant misrepresentation), our policy is to classify these 
Social Fund grants as overpayments and recover accordingly. However, HM Treasury 
has agreed that where the overpayment was not later identified, we wouldn’t get 
value for money by mounting specific exercises to identify and pursue historical 
grant overpayments from before 1 April 2014.
Housing Benefit, Council Tax Benefit and Discretionary Housing Payment receivables 
arise when we overpay subsidy to a local authority. Following the certification of 
final subsidy claims submitted by local authorities, the Secretary of State will decide 
whether to recover the overpayment, and if so how much. Although Council Tax 
Benefit ceased to exist on 1 April 2013, it will still be included in Secretary of State 
recovery decisions until all its overpayments are cleared. 
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1.17 Provisions
We recognise provisions in accordance with IAS 37 (Provisions, Contingent Liabilities 
and Contingent Assets). They are valued using the best estimate of the expenditure 
required to settle the obligation. Where the effect of the time value of money is 
significant we discount the estimated risk-adjusted cash flows using the real rate set 
by HM Treasury. 
1.18 Early departure costs 
For past early departure schemes for employees who retired early, we meet the 
additional costs of benefits beyond the normal Principal Civil Service Pension Scheme 
(PCSPS) benefits by paying the required amounts annually to the PCSPS over the 
period between early departure and normal retirement date. We provide for this 
in full when the early retirement programme becomes binding by establishing a 
provision for the estimated payments. The provision is discounted by the HM Treasury 
discount rate of 1.3% (2013-14: 1.8%) in real terms. 
From 22 December 2010, all exit costs paid under the civil service compensation 
terms consist of lump sum payments only. 
1.19 Pensions
Past and present employees are covered by the provisions of the PCSPS (see note 3 
for details). The defined benefit schemes are unfunded and are non-contributory 
except for dependants’ benefits. We recognise the expected cost of these elements, 
on a systematic and rational basis, over the period during which it benefits from 
employees’ services, by payment to the PCSPS of amounts calculated on an accruing 
basis. Liability for payment of future benefits is a charge on the PCSPS. For defined 
contribution schemes, we recognise the contributions payable for the year.  
There is a separate scheme statement for the PCSPS as a whole. Details 
can be found in the Cabinet Office accounts: Civil Superannuation (www.
civilservicepensionscheme.org.uk).
1.20 Leases
To determine whether an arrangement is or contains a lease, we look at the 
substance of the arrangement. Then we assess whether fulfilling that arrangement 
will depend on the use of a specific asset and whether the arrangement gives the 
right to use the asset.
Leases of assets where we bear substantially all risks and rewards of ownership 
are classified as finance leases. We’ve assessed significant lease arrangements 
under IFRIC 4 (Determining Whether an Arrangement Contains a Lease) and IAS 17 
(Leases) and accounted for them in accordance with the FReM. We recognise related 
assets as non-current assets in the Statement of Financial Position and account for 
the liability to pay for these assets as a finance lease. Contract payments can be 
attributed to either the service charge element or the capital repayment and interest 
element of the contract.
Leases where the lessor retains a significant portion of the risks and rewards of 
ownership are classified as operating leases, with associated costs charged to the 
Statement of Comprehensive Net Expenditure.
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Our expenditur
1.21 Private Finance Initiative (PFI) transactions
We’ve accounted for PFI transactions in accordance with IFRIC 12 (Service 
Concession Arrangements) and IAS 17 (Leases), as interpreted for the public sector.
Where we have control over the PFI asset, or where we don’t have control but we 
e
bear the balance of risks and rewards of control, we recognise the asset as a non-
current asset and account for the liability to pay for it as a finance lease obligation. 
Contract payments are apportioned between a reduction in the capital obligation, an 
imputed finance lease interest charge and a service charge.
Where we don’t have control over the PFI asset and the balance of risks and rewards 
of control are borne by the PFI operator, we record PFI payments as an expense. 
Where we have contributed assets, a prepayment for their fair value is recognised 
and amortised over the life of the PFI contract. 
Where at the end of the PFI contract a property reverts, the difference between 
the expected fair value of the residual on reversion and any agreed payment on 
reversion is built up over the life of the contract by capitalising part of the unitary 
charge each year.
1.22 Contingent liabilities
We disclose contingent liabilities in accordance with IAS 37(Provisions, Contingent 
Liabilities and Contingent Assets) .
For some statutory and non-statutory contingent liabilities the likelihood of 
transfer of economic benefit is remote. However, we still disclose some of these 
for parliamentary reporting and accountability, where this is needed under the 
requirements of Managing Public Money. 
Where the time value of money is material we state contingent liabilities that 
we have to disclose under IAS 37 at discounted amounts and separately note 
the amount reported to Parliament.  Where we don’t have to disclose contingent 
liabilities under IAS 37, we state them in the amounts reported to Parliament. 
1.23 Third-party assets 
Child Maintenance Group 
The Child Maintenance Group temporarily holds, as a custodian, money belonging 
to third parties.  This money comes from maintenance collected under the existing 
statutory child maintenance schemes. The transactions are included in a client funds 
account, published separately, and excluded from this account.
Financial Assistance Scheme 
Regulations came into force on 2 April 2010, in relation to the Financial Assistance 
Scheme, which enable the transfer of assets remaining in qualifying schemes to the 
government. Full details of the income collected as an agent rather than as principal 
for the consolidated fund are in the Trust Statement. We’ve published this separately 
from, but alongside, these financial statements [page 166].
1.24 Grant in aid 
Grants in aid to our arm’s length bodies (see note 8) are treated as expenditure in 
our Statement of Comprehensive Net Expenditure. In the accounts of the arm’s 
length bodies these grants are treated as financing, and are credited to their 
reserves. Grants in aid are accounted for on a cash basis.
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2 . Statement of operating costs
by operating segment
2014-15
2013-14
Core 
Arm’s length  Departmental 
Core 
Arm’s length  Departmental 
Department
bodies
Group
Department
bodies
Group
£000
£000
£000
£000
£000
£000
AME:
     Expenditure
167,661,348
-
167,661,348
163,316,409
-
163,316,409
DEL Administration:
     Expenditure
831,950
132,008
963,958
1,150,622
141,763
1,292,385
    Income
(45,755)
(27,869)
(73,624)
(76,297)
(20,373)
(96,670)
DEL Programme:
     Expenditure
6,419,399
435,585
6,854,984
6,127,823
490,635
6,618,458
    Income
(548,383)
(53,654)
(602,037)
(332,908)
(104,248)
(437,156)
Total
174,318,559
486,070
174,804,629
170,185,649
507,777
170,693,426
Operating segments are reported in a way that’s consistent with the internal reports 
that are sent to the chief operating decision-maker and used to make strategic 
decisions. Our chief operating decision-maker is the departmental board. 
We have two types of expenditure:

departmental expenditure limit (DEL): spending which is generally within our
control and which can be managed in fixed multi-year limits. Some elements
may be demand led.  DEL is further analysed into DEL programme and DEL
administration expenditure to reflect the distinction between front line and back-
office services

annually managed expenditure (AME): spending which is generally less
predictable and controllable than spending in DEL
We’ve disclosed these segments:

Net cost of the core department which includes:
• frontline costs of delivering benefits for people of working age and pension age
• Housing Benefit subsidies paid by a grant to local authorities
• corporate functions that support the business
• contracts for accommodation and IT services
• payments of Statutory Sick Pay and Statutory Maternity Pay to
HM Revenue and Customs
• employment programmes
• TV licences for the over-75s
• grants to Motability

Net cost of our arm’s length bodies
Grants in aid to our arm’s length bodies are not part of the operating costs of the 
core department for segmental reporting.  Therefore the total for core department 
does not balance to the Statement of Comprehensive Net Expenditure by this 
amount.
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Our expenditur
3 . Staff numbers and related costs
2014-15
2013-14
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
e
£000
£000
£000
£000
Administration staff costs
401,167
455,320
422,163
473,548
Programme staff costs
2,189,929
2,316,241
2,351,722
2,513,319
Total staff costs
2,591,096
2,771,561
2,773,885
2,986,867
Staff costs comprise:
2014-15
2013-14
Permanently 
employed 
Special 
staff
Others
Ministers
Advisers
Total
Total
£000
£000
£000
£000
£000
£000
Wages and salaries
2,225,180
40,763
164
235
2,266,342
2,428,756
Employers’ National Insurance
136,400
268
14
26
136,708
151,190
Superannuation and pension costs
367,906
605
-
-
368,511
406,921
2,729,486
41,636
178
261
2,771,561
2,986,867
Less recoveries in respect of outward 
secondments
(2,448)
-
-
-
(2,448)
(2,757)
Less other recoveries of staff costs
(3,191)
-
-
-
(3,191)
(3,146)
Total net costs
2,723,847
41,636
178
261
2,765,922
2,980,964
The Principal Civil Service Pension Scheme (PCSPS) is an unfunded multi-employer 
defined benefit scheme. However, it’s not possible to identify our share of the 
underlying assets and liabilities. A full actuarial valuation was carried out at 31 March 
2012. Details can be found in the Cabinet Office account: Civil Superannuation (www.
civilservicepensionscheme.org.uk).  
For 2014-15, we paid employer contributions of £367.2 million to the PCSPS (2013-
14: £405.5 million). These were at one of four rates in the range 16.7% to 24.3% 
of pensionable pay. The contribution rates are set to meet the cost of the benefits 
accruing in 2014-15 to be paid when the member retires, and not the benefits paid 
during this period to existing pensioners.
Outstanding contributions of £38.8 million (2013-14: £41.1 million) were payable to 
the Civil Superannuation Vote at 31 March 2015 and are included in trade payables 
and other current liabilities (see note 21).
Employees can opt to open a partnership pension account, a stakeholder pension 
with an employer contribution.  In total we paid employers contributions of £1.3 
million (2013-14: £1.4 million) to three appointed stakeholder pension providers. 
Employer contributions are age-related and range from 3% to 12.5% of pensionable 
pay. We also match employee contributions up to 3% of pensionable pay. 
We also paid £0.1 million (2013-14: £0.1 million), which is 0.8% of pensionable 
pay, to the PCSPS to cover the cost of the future provision of lump sum benefits on 
death in service and ill-health retirement of employees. Contributions due to the 
partnership pension providers at the reporting period date were £0.2 million. There 
were no prepaid contributions at that date.
In 2014-15, 128 people (2013-14: 131 people) retired early on ill-health grounds. 
The total additional accrued pension liabilities in the year were £0.229 million (2013-
14: £0.227 million).
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(i) Average number of people employed
The average number of whole-time equivalent people employed during the year is 
shown in the table below.
2014-15
2013-14 
Number
Number
Permanent 
Special 
staff
Others
Ministers
Advisers
Total
Total
Numbers of Staff
83,038
924
5
4
83,971
92,644
Staff engaged on capital projects
-
-
-
-
-
64
Total
83,038
924
5
4
83,971
92,708
Of which:
Core department
79,808
882
5
4
80,699
88,920
Arm’s length bodies
3,230
42
-
-
3,272
3,788
(ii) Reporting of civil service and other compensation schemes -
exit packages 2014-15
Core Department
Departmental Group
Number  Total number 
Number  Total number 
Number of 
of other 
of exit 
Number of 
of other 
of exit 
compulsory 
departures  packages by 
compulsory 
departures  packages by 
Exit package cost band
redundancies
agreed
cost band redundancies
agreed
cost band
< £10,000
122
333
455
127
339
466
£10,001 - £25,000
-
1,747
1,747
27
1,762
1,789
£25,001 - £50,000
-
2,114
2,114
1
2,118
2,119
£50,001 - £100,000
1
572
573
1
578
579
£100,001 - £150,000
-
9
9
-
9
9
£150,001 - £200,000
-
6
6
-
6
6
Total number of exit packages
123
4,781
4,904
156
4,812
4,968
Total cost £000
596
144,133
144,729
1,085
144,999
146,084
Reporting of civil service and other compensation schemes – 
exit packages 2013-14
Core Department
Departmental Group
Number  Total number 
Number  Total number 
Number of 
of other 
of exit 
Number of 
of other 
of exit 
compulsory 
departures  packages by 
compulsory 
departures  packages by 
Exit package cost band
redundancies
agreed
cost band redundancies
agreed
cost band
< £10,000
221
330
551
221
331
552
£10,001 - £25,000
1
1,453
1,454
1
1,457
1,458
£25,001 - £50,000
1
1,625
1,626
1
1,628
1,629
£50,001 - £100,000
-
694
694
-
694
694
£100,001 - £150,000
2
65
67
2
65
67
£150,001 - £200,000
-
5
5
-
5
5
Total number of exit packages
225
4,172
4,397
225
4,180
4,405
Total cost £000
1,313
139,942
141,255
1,313
140,104
141,417
We’ve paid redundancy and other departure costs in accordance with the provisions 
of the Civil Service Compensation Scheme, a statutory scheme made under the 
Superannuation Act 1972. We account for exit costs in full when the early retirement 
programme becomes binding but actual dates of departure may fall in the following 
reporting period. Where we’ve agreed early retirements we, not the Civil Service 
130 Department for Work and Pensions Annual Report and Accounts 2014-15
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Pension Scheme, meet the additional costs. Ill-health retirement costs met by the 
Our expenditur
pension scheme aren’t included in the table. 
From 22 December 2010, new civil service compensation terms were introduced 
for early release schemes. We make all voluntary exit costs in lump-sum payments. 
Payments for schemes before this date were made as both lump sum and annual 
e
compensation payments. The liability for these annual payments is included in 
“other provisions” in note 23. 
4 . Administration costs
2014-15
2013-14
Core
Departmental 
Core
Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Goods and services
160,713
183,759
164,694
189,652
IT services
156,425
166,101
204,850
223,503
Accommodation costs
18,475
29,532
8,312
18,455
Finance lease charges
6,355
6,355
9,275
9,275
Research and development expenditure
-
2,094
-
2,248
PFI and other service concession arrangements 
service charges
8,821
18,168
8,492
19,578
Rentals under operating leases
488
5,115
1,573
7,012
Compensation payments to customers
140
140
770
770
Audit fee
-
153
-
186
Interest charges
-
-
68
68
Other administration costs
5,231
13,736
4,338
12,974
Administration costs
356,648
425,153
402,372
483,721
Non-cash:
    Auditor’s remuneration
1,797
1,797
2,138
2,138
    Depreciation of non-current assets
26,647
33,340
154,870
161,969
    Amortisation of non-current assets
38,983
40,301
140,906
141,925
    Loss on disposal of non-current assets
426
458
4,322
4,518
    Impairment of non-current assets
13
5,192
5,192
22,739
22,751
    Amortisation of prepayments
5,000
5,000
5,000
5,000
    Movement in impairment of receivables
(4,008)
(4,014)
(4,017)
(4,017)
    Provisions movement in year
98
1,411
129
832
Administration costs – non-cash
74,135
83,485
326,087
335,116
Total administration costs
430,783
508,638
728,459
818,837
The decrease in depreciation and amortisation is as a result of the recent change to 
HM Treasury’s Consolidated Budgeting Guidance, as explained in accounting policies 
note 1.13 – Depreciation and Amortisation.
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5 . Programme costs 
2014-15
2013-14
Core 
Departmental 
Core 
Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Goods and services
691,198
719,862
494,894
524,542
IT services
448,042
450,189
458,704
460,093
Accommodation costs
395,127
396,820
387,410
389,265
Finance lease charges
20,793
20,793
23,283
23,283
Research and development expenditure
-
1,545
-
5,652
PFI and other service concession arrangements 
service charges
49,987
49,987
48,120
48,120
Rentals under operating leases
11,448
12,083
3,465
4,042
Compensation payments to customers
1,542
1,542
2,144
2,144
Audit fee
-
63
-
60
Social Fund expenditure
2,159,890
2,159,890
2,186,298
2,186,298
Voted expenditure 
6
74,277,996
74,552,754
73,179,867
73,468,862
Non-voted expenditure: contributory benefits
7
92,182,343
92,182,343
89,313,001
89,313,001
Agency payments on behalf of EU to third parties
285,871
285,871
158,257
158,257
Programme balances written off
9
470,881
470,881
461,733
461,733
Other programme expenditure
43,045
43,045
40,578
40,578
Programme costs
171,038,163
171,347,668
166,757,754
167,085,930
Non-cash:
    Depreciation of non-current assets
128,488
128,577
-
73
    Amortisation of non-current assets
102,021
102,142
-
103
    Loss on disposal of non-current assets
116
116
1,560
1,560
    Impairment of non-current assets
13
-
-
3,320
3,320
Movement in impairment of receivables:
    Contributory benefits
(11,893)
(11,893)
(7,036)
(7,036)
    Non-contributory benefits
(87,933)
(87,933)
(32,498)
(32,498)
    Social Fund payments
(67,787)
(67,787)
(76,520)
(76,520)
    Other
(868)
442
1,056
2,530
Provisions:
    Movement in year
555,238
554,138
212,201
211,589
    Unwinding of discount
236,606
236,606
230,787
230,787
Revaluation (gain)/loss
(1,964)
(2,616)
1,507
1,331
Other non-cash costs
631
631
379
379
Programme costs – non-cash
852,655
852,423
334,756
335,618
Total programme costs
171,890,818
172,200,091
167,092,510
167,421,548
The increase in depreciation and amortisation is as a result of the recent change to 
HM Treasury’s Consolidated Budgeting Guidance, as explained in accounting policies 
note 1.13 - Depreciation and Amortisation.
132 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
6 . Voted expenditure
2013-14
2014-15
Restated
Restated
Core 
Departmental 
Core 
Departmental 
Department
Group
Department
Group
e
£000
£000
£000
£000
Disability Living Allowance
13,786,187
13,786,187
13,740,606
13,740,606
Income Support
2,914,408
2,914,408
3,563,239
3,563,239
Universal Credit
56,148
56,148
5,862
5,862
Personal Independence Payment
1,567,172
1,567,172
164,817
164,817
Pension Credit
6,452,017
6,452,017
6,928,599
6,928,599
Attendance Allowance
5,387,863
5,387,863
5,324,191
5,324,191
Jobseeker’s Allowance
2,668,337
2,668,337
3,767,985
3,767,985
Carer’s Allowance
2,316,366
2,316,366
2,079,746
2,079,746
Severe Disablement Allowance
734,508
734,508
858,923
858,923
Industrial Injuries Benefit Scheme
907,187
907,187
900,542
900,542
Employment and Support Allowance
8,598,442
8,598,442
6,830,099
6,830,099
Amounts paid to local authorities
24,434,973
24,434,973
24,507,237
24,507,237
Employment Programmes
1,004,686
1,004,686
1,058,120
1,058,120
Statutory Sick Pay and Statutory Maternity Pay
2,390,969
2,390,969
2,258,201
2,258,201
Other Expenditure
1,058,733
1,333,491
1,191,700
1,480,695
74,277,996
74,552,754
73,179,867
73,468,862
The 2013-14 figures have been restated as Social Fund expenditure is not Voted 
expenditure.
7 . Non-voted expenditure
2014-15
2013-14
Core 
Departmental 
Core 
Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
State Pension
86,395,934
86,395,934
82,988,556
82,988,556
Christmas Bonus
124,497
124,497
122,523
122,523
Bereavement benefits
572,557
572,557
581,769
581,769
Jobseeker’s Allowance
366,315
366,315
522,215
522,215
Employment and Support Allowance
4,059,517
4,059,517
3,522,059
3,522,059
Incapacity Benefit
247,128
247,128
1,176,044
1,176,044
Maternity Allowance
416,395
416,395
399,835
399,835
Total contributory benefits
92,182,343
92,182,343
89,313,001
89,313,001
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8 . Grant in aid to arm’s length bodies
2014-15
2013-14
£000
£000
Independent Living Fund
283,976
293,456
Health and Safety Executive
141,055
154,267
The Pensions Regulator
59,588
56,883
The Pensions Advisory Service
3,600
3,141
The Pensions Ombudsman
3,067
3,179
491,286
510,926
Grant in aid to the arm’s length bodies above is shown as grant in aid expenditure in 
the Statement of Comprehensive Net Expenditure. These balances are eliminated on 
consolidation into the departmental group.
9 . Programme balances written off
2014-15
2013-14
Core 
Departmental 
Core 
Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Contributory benefits
52,868
52,868
65,854
65,854
Non-contributory benefits
351,650
351,650
362,832
362,832
Social Fund payments
66,363
66,363
33,047
33,047
470,881
470,881
461,733
461,733
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Our expenditur
10 . Income
(i) Analysis of income
2014-15
2013-14
e
Departmental 
Departmental 
Core Department
Group
Core Department
Group
£000
£000
£000
£000
Administration
Income from other government departments
31,633
31,607
67,059
67,015
ESF income
2,866
2,866
2,733
2,733
HSE administrative income
-
28,215
-
20,532
CFER income
7,176
7,176
251
251
Other administration income
4,080
3,760
6,254
6,139
45,755
73,624
76,297
96,670
Programme
Benefit income
18,244
18,244
22,836
22,836
Pension levy receipts
60,971
60,971
59,815
59,815
Income from other government departments
40,909
40,909
39,469
39,446
ESF income
37,655
37,655
19,590
19,590
EU income where DWP acts as agent for payments 
to third parties
281,650
281,650
139,116
139,116
Exchange rate gain - non cash
22,148
22,148
1,616
1,616
HSE programme income
-
52,492
-
104,000
NIF income
12
12
7
7
CFER income
4,907
4,907
9,867
9,867
Mesothelioma recoveries
31,135
31,135
26,013
26,013
2014 Diffuse Mesothelioma Scheme
24,956
24,956
-
-
Other programme income
25,796
26,958
14,579
14,850
548,383
602,037
332,908
437,156
Total income
594,138
675,661
409,205
533,826
135
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(ii) Analysis of fees and charges
This analysis of income from services provided to external and public-sector 
customers is provided for fees and charges purposes. We’ve complied with the cost 
allocation and charging requirements set out in HM Treasury and Office of Public 
Sector Information guidance.
2014-15
2013-14
Departmental Group
Departmental Group
Surplus/
Surplus/
Income
Full Cost
(Deficit)
Income
Full Cost
(Deficit)
£000
£000
£000
£000
£000
£000
2014 Diffuse Mesothelioma Scheme levy
32,000
24,956
7,044
-
-
-
HSE fees
50,807
55,238
(4,431)
101,954
105,697
(3,743)
Application and collection fees from 2012 
Child Maintenance statutory scheme
10a
2,802
49,432
(46,630)
-
-
-
Pension levy receipts
60,971
60,971
-
59,815
59,815
-
New Generation Human Resources
8,502
8,441
61
8,392
8,362
30
Legal services
-
-
-
6,601
6,601
-
Recovery of healthcare costs
6,600
6,325
275
6,463
6,392
71
161,682
205,363
(43,681)
183,225
186,867
(3,642)
a. The department introduced a £20 application fee for the 2012 Child Maintenance
statutory scheme from 30 June 2014. This covers most applications, though some
are exempt. We also introduced collection charging for the scheme from 11 August
2014. For the parent who will pay the maintenance this charge is 20% of the amount
payable. For the parent receiving the maintenance the charge is 4%. The level of
charging was set following a full government consultation exercise. The aim of the
charge is to encourage parents to make their own collaborative arrangements.
136 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
11 . Property, plant and equipment
Consolidated property, plant and equipment 
Payments 
e
on Account 
and Assets 
Land and 
Leasehold  Information 
Plant and 
Furniture 
Motor 
Under 
Buildings Improvements
Technology
Machinery and Fittings
Vehicles Construction
Total
Note
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2014
1,779,854
29,596
345,479
43,137
10,223
4,194
2,811
2,215,294
Additions
494
238
51,590
1,161
218
887
1,942
56,530
Disposals
(8,464)
(6,600)
(89,031)
(629)
(135)
(730)
-
(105,589)
Impairments
-
-
-
-
-
-
-
-
Transfers out
-
(444)
(17)
(8)
(145)
(676)
-
(1,290)
Reclassifications
586
707
-
-
-
-
(1,293)
-
Revaluations
18,405
30
13
-
10
-
-
18,458
At 31 March 
1,790,875
23,527
308,034
43,661
10,171
3,675
3,460
2,183,403
2015
Depreciation
At 1 April 2014
1,162,787
15,035
296,420
31,650
4,367
1,617
-
1,511,876
Charged in year 11a
131,642
3,507
21,897
3,720
745
406
-
161,917
Disposals
(966)
(6,575)
(88,181)
(562)
(133)
(459)
-
(96,876)
Impairments
-
-
-
-
-
-
-
-
Transfers out
-
(178)
(15)
(7)
(42)
(204)
-
(446)
Reclassifications
-
-
-
-
-
-
-
-
Revaluations
(7,020)
23
7
-
1
-
-
(6,989)
At 31 March 
1,286,443
11,812
230,128
34,801
4,938
1,360
-
1,569,482
2015
Carrying 

amount at 31 
March 2015
504,432
11,715
77,906
8,860
5,233
2,315
3,460
613,921
Carrying 
amount at 31 
March 2014
617,067
14,561
49,059
11,487
5,856
2,577
2,811
703,418
Asset financing:
Owned
10,968
11,715
23,170
4,307
3,274
2,315
3,460
59,209
Finance leased
30,671
-
54,736
4,553
-
-
-
89,960
PFI contracts
462,793
-
-
-
1,959
-
-
464,752
Carrying 
amount at 31 
March 2015
504,432
11,715
77,906
8,860
5,233
2,315
3,460
613,921
Of the total:
Department
438,310
3,716
74,378
4,586
143
-
3,455
524,588
ALBs
66,122
7,999
3,528
4,274
5,090
2,315
5
89,333
Carrying 
amount at 31 
March 2015
504,432
11,715
77,906
8,860
5,233
2,315
3,460
613,921
137
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Payments 
on Account 
and Assets 
Land and 
Leasehold  Information 
Plant and 
Furniture 
Motor 
Under 
Buildings Improvements
Technology
Machinery and Fittings
Vehicles Construction
Total
Note
£000
£000
£000
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2013
1,760,881
23,071
352,637
43,276
10,329
3,680
3,897
2,197,771
Additions
10,976
2,435
17,019
618
1,287
1,297
3,256
36,888
Disposals
(20,299)
(311)
(24,920)
(579)
(1,406)
(783)
-
(48,298)
Impairments
(3,604)
-
-
(181)
-
-
-
(3,785)
Reclassifications
-
4,339
795
3
-
-
(4,342)
795
Revaluations
31,900
62
(52)
-
13
-
-
31,923
At 31 March 
1,779,854
29,596
345,479
43,137
10,223
4,194
2,811
2,215,294
2014
Depreciation
At 1 April 2013
1,039,445
12,145
291,917
27,318
4,784
1,669
-
1,377,278
Charged in year    11a
124,958
3,145
27,698
5,017
770
454
-
162,042
Disposals
(1,527)
(311)
(23,100)
(514)
(1,189)
(506)
-
(27,147)
Impairments
(284)
-
-
(171)
-
-
-
(455)
Reclassifications
-
-
(62)
-
-
-
-
(62)
Revaluations
195
56
(33)
-
2
-
-
220
At 31 March 
1,162,787
15,035
296,420
31,650
4,367
1,617
-
1,511,876
2014
Carrying 

amount at 31 
March 2014
617,067
14,561
49,059
11,487
5,856
2,577
2,811
703,418
Carrying 
amount at 31 
March 2013
721,436
10,926
60,720
15,958
5,545
2,011
3,897
820,493
Asset financing:
Owned
8,617
14,561
15,756
4,216
3,797
2,577
2,811
52,335
Finance leased
30,403
-
33,303
7,271
-
-
-
70,977
PFI contracts
578,047
-
-
-
2,059
-
-
580,106
Carrying 
amount at 31 
March 2014
617,067
14,561
49,059
11,487
5,856
2,577
2,811
703,418
Of the total:
Department
547,739
5,088
45,502
7,299
155
-
2,224
608,007
ALBs
69,328
9,473
3,557
4,188
5,701
2,577
587
95,411
Carrying 
amount at 31 
March 2014
617,067
14,561
49,059
11,487
5,856
2,577
2,811
703,418
a. Total depreciation in the year of £162 million (2013-14: £162 million) includes
£129.1 million (2013-14: £122.8 million) of in year depreciation for PFI contracts.
138 Department for Work and Pensions Annual Report and Accounts 2014-15
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b. Cash flow reconciliation
Our expenditur
2014-15
2013-14
£000
£000
Capital payables and accruals at 1 April 
625
2,112
e
Capital additions 
56,519
36,711
Less: Leased capital additions
(35,866)
(25,952)
Capital payables and accruals at 31 March 
(1,305)
(625)
Purchases of property, plant and equipment as per Statement of Cash Flows
19,973
12,246
Of the total:
Department
15,781
5,332
Arm’s length bodies
4,192
6,914
Capital additions were £56.5 million (2013-14: £36.7 million).  This excludes £0.01 
million (2013-14: £0.2 million) of assets purchased prior to 2014-15 which had 
previously been charged as expenditure.
Land and buildings 
Freehold 
Leasehold 
Land
Buildings
Buildings
Total
£000
£000
£000
£000
Cost or valuation
At 1 April 2014 
725,240
7,318
1,047,296
1,779,854
Additions
-
494
-
494
Disposals
(3,730)
-
(4,734)
(8,464)
Impairments
-
-
-
-
Reclassifications
(11)
597
-
586
Revaluations
7,090
(55)
11,370
18,405
At 31 March 2015 
728,589
8,354
1,053,932
1,790,875
Depreciation
At 1 April 2014
501,823
1,318
659,646
1,162,787
Charged in year
54,685
404
76,553
131,642
Disposals
(418)
-
(548)
(966)
Impairments
-
-
-
-
Reclassifications
-
-
-
-
Revaluations
-
(1,497)
(5,523)
(7,020)
At 31 March 2015 
556,090
225
730,128
1,286,443
Carrying amount at 31 March 2015
172,499
8,129
323,804
504,432
Carrying amount at 31 March 2014 
223,417
6,000
387,650
617,067
Of the total:
Department
169,658
1,461
267,191
438,310
Arm’s length bodies
2,841
6,668
56,613
66,122
Carrying amount at 31 March 2015 
172,499
8,129
323,804
504,432
139
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Freehold 
Leasehold 
Land
Buildings
Buildings
Total
£000
£000
£000
£000
Cost or valuation
At 1 April 2013 
730,352
10,511
1,020,018
1,760,881
Additions
3,797
226
6,953
10,976
Disposals
(8,404)
-
(11,895)
(20,299)
Impairments
-
(3,604)
-
(3,604)
Reclassifications
-
-
-
-
Revaluations
(505)
185
32,220
31,900
At 31 March 2014 
725,240
7,318
1,047,296
1,779,854
Depreciation
At 1 April 2013
447,210
1,213
591,022
1,039,445
Charged in year
55,178
349
69,431
124,958
Disposals
(565)
-
(962)
(1,527)
Impairments
-
(284)
-
(284)
Reclassifications
-
-
-
-
Revaluations
-
40
155
195
At 31 March 2014 
501,823
1,318
659,646
1,162,787
Carrying amount at 31 March 2014
223,417
6,000
387,650
617,067
Carrying amount at 31 March 2013 
283,142
9,298
428,996
721,436
Of the total:
Department
220,799
1,496
325,444
547,739
Arm’s length bodies
2,618
4,504
62,206
69,328
Carrying amount at 31 March 2014 
223,417
6,000
387,650
617,067
140 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
12 . Intangible assets
Payments 
on Account 
Purchased 
Internally
and Assets 
Software 
Developed 
Under 
e
Websites
Licences
Software Construction
Total
Note
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2014 
40,709
207,374
1,037,938
70,888
1,356,909
Additions
-
8,308
99
56,065
64,472
Disposals
(8,669)
(6,962)
(2,915)
-
(18,546)
Impairments
-
(4,322)
(3,785)
(2,728)
(10,835)
Reclassifications
4,256
(10,524)
84,971
(90,622)
(11,919)
Revaluations
501
39,420
18,917
-
58,838
At 31 March 2015 
36,797
233,294
1,135,225
33,603
1,438,919
Amortisation
At 1 April 2014
36,544
134,396
577,397
-
748,337
Charged in year
12a
4,915
28,948
106,374
-
140,237
Disposals
(8,669)
(6,409)
(2,915)
-
(17,993)
Impairments
-
(2,428)
(3,215)
-
(5,643)
Reclassifications
-
-
-
-
-
Revaluations
383
1,111
8,971
-
10,465
At 31 March 2015 
33,173
155,618
686,612
-
875,403
Carrying amount at 31 March 2015
3,624
77,676
448,613
33,603
563,516
Carrying amount at 31 March 2014 
4,165
72,978
460,541
70,888
608,572
Of the total:
Department
3,624
74,901
448,074
32,706
559,305
Arm’s length bodies
-
2,775
539
897
4,211
Carrying amount at 31 March 2015 
3,624
77,676
448,613
33,603
563,516
141
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Payments 
on Account 
Purchased 
Internally 
and Assets 
Software 
Developed 
Under 
Websites
Licences
Software Construction
Total
Note
£000
£000
£000
£000
£000
Cost or valuation
At 1 April 2013 
40,185
212,091
770,454
257,319
1,280,049
Additions
21
7,920
420
93,158
101,519
Disposals
-
(8,253)
(5,862)
-
(14,115)
Impairments
(446)
(31)
(5,032)
(17,014)
(22,523)
Reclassifications
-
1,976
259,789
(262,560)
(795)
Revaluations
949
(6,329)
18,169
(15)
12,774
At 31 March 2014 
40,709
207,374
1,037,938
70,888
1,356,909
Amortisation
At 1 April 2013
28,190
112,693
470,225
-
611,108
Charged in year
12a
7,689
31,787
102,552
-
142,028
Disposals
-
(6,694)
(4,158)
-
(10,852)
Impairments
-
170
58
-
228
Reclassifications
-
62
-
-
62
Revaluations
665
(3,622)
8,720
-
5,763
At 31 March 2014 
36,544
134,396
577,397
-
748,337
Carrying amount at 31 March 2014
4,165
72,978
460,541
70,888
608,572
Carrying amount at 31 March 2013 
11,995
99,398
300,229
257,319
668,941
Of the total:
Department
4,142
71,047
459,646
70,757
605,592
Arm’s length bodies
23
1,931
895
131
2,980
Carrying amount at 31 March 2014 
4,165
72,978
460,541
70,888
608,572
a. Total amortisation in the year was £140.2 million (2013-14: £142 million).  This
consisted of £142.4 million charged to the Statement of Comprehensive Net
Expenditure and £(2.2) million (2013-14: £nil) relating to assets purchased before
2014-15 that were charged to the general fund.
b. The carrying amount that would have been recognised had the revalued classes of
intangible assets been measured after recognition using the cost model is
£531.3 million.
c. The Purchased Software Licences includes £25.6 million IPv4 addresses (unique
identifier for devices on a network) which were initially recognised at nominal value
and then revalued to the fair market value at the Statement of Financial Position
date.  A further £11.9 million were re-classified as held for sale (see note 22).
d. Cash flow reconciliation:
2014-15
2013-14
£000
£000
Capital payables and accruals at 1 April 
5,945
20,890
Capital additions 
66,664
100,800
Capital payables and accruals at 31 March 
(1,966)
(5,945)
Purchases of intangible assets
70,643
115,745
Of the total:
Department
67,967
114,569
Arm’s length bodies
2,676
1,176
142 Department for Work and Pensions Annual Report and Accounts 2014-15
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Capital additions were £66.7 million (2013-14: £100.8 million).  This excludes £(2.2) 
Our expenditur
million of prior year additions expensed in 2014-15 (2013-14: £0.7 million).
e. £120.1 million (2013-14: £131.3 million) of the £563.5 million carrying value
(2013-14: £608.6 million) of intangible assets relate to Universal Credit (UC) assets as
follows:
e
Internally 
Developed 
Assets under 
Software
Licences
Construction
Total
£m
£m
£m
£m
Carrying amount at 31 March 2014
102 .1
17 .6
11 .6
131 .3
Additions
-
0.8
20.6
21.4
Transfer from Assets Under Construction to internally developed software
21.7
-
(21.7)
-
Impairment
-
-
(2.7)
(2.7)
Annual amortisation
(25.5)
(5.9)
-
(31.4)
Revaluation
1.3
0.2
-
1.5
Carrying amount at 31 March 2015
99 .6
12 .7
7 .8
120 .1
We continue to roll out UC Live service because of the assessed economic benefits. 
This allows us and the UC claimants to get hands-on experience while we continue 
to “test and learn” the digital solution. 
We estimated in 2013 that expanding the UC live service in this way brings 
forward the benefits of the programme and increases the net present value of the 
programme by £1.8 billion.
The carrying value of the internally developed software in use as at 31 March 2015 
was £99.6 million (2013-14: £102.1 million). This consists of:

£84.3 million (2013-14: £68.6 million) of IT assets which are being used as part
of the existing IT functionality.  We’re amortising these assets to December 2017

£15.3 million (2013-14: £33.5 million) of IT assets which are being used as part
of the existing IT functionality and will also be used in the new digital service.
We’re amortising these assets over 15 years
Assets under construction as at 31 March 2015 consist of completed IT assets that 
had not been deployed at the year-end but which are scheduled to be brought into 
use later in 2015.
We completed an impairment review of the capitalised UC assets and determined 
that it was unlikely that £2.7 million of security software would be brought into use. 
These assets, held as assets under construction, have been impaired accordingly. 
We’ve identified no further indicators of impairment that would affect the values of 
the UC IT assets.
143
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13 . Non-current assets impairment
2014-15
2013-14
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Charged to Statement of Comprehensive Net Expenditure
    Property, plant and equipment
11
-
-
3,320
3,330
    Intangible assets
12
5,192
5,192
22,739
22,751
Transferred from revaluation reserve
    Property, plant and equipment
-
-
-
(10)
Total
5,192
5,192
26,059
26,071
14 . Financial assets
movement in 
31 March 
1st April 2014 
year
2015
£000
£000
£000
Working Links (Employment) Ltd
3,637
638
4,275
National Employment Savings Trust Corporation
299,317
87,830
387,147
New Enterprise Allowance
9,478
(5,496)
3,982
Office for Nuclear Regulation
-
5,900
5,900
Total
            312,432                88,872              401,304 
We hold investments in Working Links (Employment) Ltd a public, private and 
voluntary company.  Private sector shareholders are Manpower and Capgemini UK 
plc. and voluntary sector shares are held by Mission Australia. This investment is 
classified as available-for sale (see note 22).
We provided a loan to National Employment Savings Trust Corporation to set up and 
administer the scheme. 
We provided loans to New Enterprise Allowance, which provides loans to customers 
setting up a new business. Customers typically repay the loan within 3 years.
Office for Nuclear Regulation (ONR) became a public corporation on 1 April 2014, 
having previously been consolidated within Health and Safety Executive. We provided 
a loan to ensure its effective operation.
15 . Capital commitments
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Property, plant and equipment
106
744
5,524
6,379
Intangible assets
2,434
2,706
2,066
4,121
2,540
3,450
7,590
10,500
144 Department for Work and Pensions Annual Report and Accounts 2014-15
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Our expenditur
16 . Commitments under non-PFI leases 
(i) Operating leases
Total future minimum lease payments under operating leases are given in the table 
e
below:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Not later than 1 year
12,089
16,339
11,234
14,721
Later than 1 year and not later than 5 years
14,875
23,397
14,640
24,730
Later than 5 years
13,449
22,828
13,711
23,768
40,413
62,564
39,585
63,219
(ii) Finance leases
Total future minimum lease payments under finance leases are given in the table 
below for each of the following periods:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Gross liabilities
Not later than 1 year
25,000
25,000
31,568
31,568
Later than 1 year and not later than 5 years
70,287
70,287
47,164
47,164
Later than 5 years
68,669
68,669
76,875
76,875
Total gross liabilities
163,956
163,956
155,607
155,607
Less: interest element
(46,624)
(46,624)
(50,982)
(50,982)
Present value of obligations
117,332
117,332
104,625
104,625
 
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Present value of obligations
Not later than 1 year
17,604
17,604
24,467
24,467
Later than 1 year and not later than 5 years
50,685
50,685
26,985
26,985
Later than 5 years
49,043
49,043
53,173
53,173
117,332
117,332
104,625
104,625
Finance leases include the following non PFI arrangements: 
•  We have an arrangement for the provision of accommodation on the Newcastle 
estate which started on 1 April 1999 and lasts until 2029.
•  IT Services 
The following IT contracts meet the definition of a finance lease: 
• HP Enterprise Services Ltd for: 
- hosting services to February 2018 
- service integration and management to February 2016 
- application maintenance and support to February 2016 
- application development to February 2016 
- desktop services to March 2017
145
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•  BT Global Services for:
- integrated communications network services to February 2016
- connectivity services to September 2019
•  Xerox for sustainable print services to June 2017
•  Monster for Universal Jobmatch to April 2016
17 . Commitments under PFI contracts and other
service concession arrangements
We’ve assessed the transactions arising from the following contracts under IFRIC 
12 (Service Concession Arrangements) and IAS 17 (Leases). We account for them 
in accordance with the FReM. As the balance of control of the assets is borne by us 
or our arm’s length bodies, rather than the PFI provider, we recognise the assets 
provided under the contracts as non-current assets in the Statement of Financial 
Position. We also account for the liabilities to pay for these assets as finance leases. 
We attribute contract payments to either the service charge element or the capital 
repayment and interest element of the contracts.
The imputed finance lease charges are:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Rentals due within 1 year
116,010
126,336
118,599
128,855
Rentals due later than 1 year and not later than 5 years
231,767
273,071
355,671
396,975
Rentals due later than 5 years
-
162,752
-
173,078
Less interest element
(25,782)
(138,346)
(45,486)
(166,554)
Present value of obligations
321,995
423,813
428,784
532,354
The minimum service charges are:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Service charge due within 1 year
401,311
411,940
407,240
417,150
Service charge due later than 1 year and not later than 5 years
826,215
868,729
1,259,762
1,299,399
Service charge due later than 5 years
-
154,905
-
153,693
Total
1,227,526
1,435,574
1,667,002
1,870,242
The contracts assessed as service concessions are as follows:
Private sector resource management of the estate (PRIME)
We have a Private Finance Initiative partnership agreement under which the former 
Department of Social Security transferred ownership and management of its estate 
to a private-sector partner in exchange for fully serviced accommodation. The 
contract runs from 1 April 1998 to 31 March 2018.
Health and Safety Executive accommodation and IT services
Health and Safety Executive has signed a 30 year contract for fully serviced 
accommodation at Redgrave Court in Bootle, Merseyside. The contract runs from 
May 2005 to May 2035.
146 Department for Work and Pensions Annual Report and Accounts 2014-15
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Health and Safety Executive has occupied serviced accommodation in Buxton for 
Our expenditur
laboratory and support functions. This comes under a ‘design, build, finance and 
operate’ contract which started on 28 October 2004 and lasts until 2037. 
On 3 June 2013, the Health and Safety Executive entered a 3 year IT service supply 
contract with Steria UK plc.
e
Charge to the Statement of Comprehensive Net Expenditure and future 
commitments
Contingent rent of £58.8 million (2013-14: £56.6 million) is included in the Statement 
of Comprehensive Net Expenditure. The contingent rent figures, as at 31 March 2015, 
are based on a 0.94% per annum increase on the 31 March 2014 rental figure. This is 
because the rental payments in the PRIME lease contract are linked to the Consumer 
Price Index.
18 . Other financial commitments
We’ve entered into several significant, non-cancellable contracts (which are not 
leases or PFI contracts) for the provision of goods and services.  The commitments 
under those contracts with a value greater than or equal to £5m are:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Not later than 1 year
289,236
296,110
403,227
404,214
Later than 1 year and not later than 5 years
424,825
433,395
357,352
360,213
Later than 5 years
155,924
159,874
583
3,831
869,985
889,379
761,162
768,258
19 . Cash and cash equivalents
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Balances at 1 April
208,879
214,790
(339,719)
(338,517)
Net change in cash and cash equivalent balances
(2,239,248)
(2,234,057)
548,598
553,307
Balances at 31 March
(2,030,369)
(2,019,267)
208,879
214,790
Represented by:
Cash and cash equivalents
136,689
147,791
256,064
262,337
Bank overdraft
(2,167,058)
(2,167,058)
(47,185)
(47,547)
(2,030,369)
(2,019,267)
208,879
214,790
The following balances at 31 March were held at:
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Government Banking Services
(2,043,306)
(2,042,738)
200,467
200,106
Commercial banks and cash in hand
12,937
23,471
8,412
14,684
(2,030,369)
(2,019,267)
208,879
214,790
The bank overdraft includes £1.6 billion of advance benefit payments. This is due to 
the Easter Bank Holiday, which straddled the year-end.
147
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20 . Trade receivables, financial and other assets
(i) Analysis by type
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
£000
£000
£000
£000
Amounts falling due within one year
Trade receivables
20,373
39,984
19,637
34,105
Deposits and advances
1,692
1,947
1,820
2,020
Amounts due from other government departments
20,784
20,628
21,087
20,940
Benefit overpayments
359,221
359,221
323,279
323,279
Benefit advances
5,271
5,271
1,817
1,817
Housing and Council Tax Benefit
338,873
338,873
163,241
163,241
Prepayments and accrued income
1,686,213
1,701,714
850,186
879,910
Social Fund loans
325,001
325,001
384,405
384,405
European Social Fund
493,915
493,915
398,957
398,957
VAT
82,588
83,734
60,316
62,745
Current part of loans
3,749
3,749
1,341
1,341
Amounts due from the consolidated fund in respect of supply
581,277
581,277
-
-
Other receivables
34,013
34,340
22,968
23,346
Gross receivables
3,952,970
3,989,654
2,249,054
2,296,106
Less: Provision for impairment
(135,975)
(138,496)
(112,694)
(114,737)
Net receivables
3,816,995
3,851,158
2,136,360
2,181,369
Amounts falling due after more than one year
Deposits and advances
106
198
155
248
Prepayments and accrued income
10,000
10,000
15,000
15,000
Benefit overpayments
2,123,449
2,123,449
2,141,338
2,141,338
Social Fund loans
611,262
611,262
698,200
698,200
Other receivables
4,096
5,262
4,609
5,494
Gross receivables
2,748,913
2,750,171
2,859,302
2,860,280
Less: Provision for impairment
(1,264,611)
(1,264,611)
(1,459,345)
(1,459,345)
Net receivables
1,484,302
1,485,560
1,399,957
1,400,935
Total net receivables
5,301,297
5,336,718
3,536,317
3,582,304
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Our expenditur
(ii) Intra-government balances 
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Amounts falling due within one year
£000
£000
£000
£000
e
Balances with other central government bodies
733,923
736,390
134,839
138,998
Balances with local authorities
345,322
345,588
163,519
163,656
Balances with NHS bodies
18
144
69
216
Balances with public corporations and trading funds
18,361
20,129
8,590
8,891
Intra-government balances
1,097,624
1,102,251
307,017
311,761
Balances with bodies external to government
2,719,371
2,748,907
1,829,343
1,869,608
Total receivables at 31 March
3,816,995
3,851,158
2,136,360
2,181,369
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Amounts falling due after one year
£000
£000
£000
£000
Balances with bodies external to government
1,484,302
1,485,560
1,399,957
1,400,935
Total receivables at 31 March
1,484,302
1,485,560
1,399,957
1,400,935
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21 . Trade payables and other current liabilities
(i) Analysis by type
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Amounts falling due within one year
Taxation and social security
40,206
43,784
42,505
46,745
Superannuation
35,949
38,832
37,654
41,097
Trade payables
78,775
80,679
76,526
79,242
Amounts due to other government departments
47,680
47,680
49,193
49,193
Accruals and deferred income
2,638,968
2,669,000
3,428,199
3,459,180
Capital accruals
11 & 12
2,505
3,271
6,133
6,570
Bank overdrafts
19
2,167,058
2,167,058
47,185
47,547
Imputed finance lease element of on-Statement of Financial 
Position PFI contracts
102,284
104,255
99,516
101,267
Finance lease obligations
16(ii)
17,604
17,604
24,467
24,467
CFERs due to be paid to the consolidated fund – received
715
715
5,359
5,359
CFERs due to be paid to the consolidated fund – receivable
10,131
10,131
2,203
2,203
Amounts issued from the consolidated fund for supply but not 
spent at year end
-
-
158,849
158,849
Amounts issued from the contingencies fund
-
-
984
984
Third party payments
59,908
59,908
56,720
56,720
European Social Fund
239,688
239,688
151,220
151,220
Other payables
16,722
29,566
11,488
20,763
5,458,193
5,512,171
4,198,201
4,251,406
Amounts falling due after more than one year
Imputed finance lease element of on-Statement of Financial 
Position PFI contracts
219,948
319,795
329,268
431,086
Finance lease obligations
16(ii)
99,728
99,728
80,159
80,159
European Social Fund
21a
164,917
164,917
183,754
183,754
Other payables
-
285
-
472
484,593
584,725
593,181
695,471
Total payables
5,942,786
6,096,896
4,791,382
4,946,877
a. Balances due over one year of £164.9 million (31 March 2014: £183.8 million)
consist of money paid to us by the EU for the European Social Fund. These advances
are due to be paid back when final claims are agreed for the 2007-13 programme.
This is expected to be in 2017-18.
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Our expenditur
(ii) Intra-government balances
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
e
Amounts falling due within one year
Balances with other central government bodies
448,945
456,077
308,421
316,659
Balances with local authorities
159,612
159,624
339,660
339,680
Balances with NHS bodies
30,204
30,383
24,896
25,144
Balances with public corporations and trading funds
6,458
6,717
35
232
Intra-government balances
645,219
652,801
673,012
681,715
Balances with bodies external to government
4,812,974
4,859,370
3,525,189
3,569,691
Total payables at 31 March
5,458,193
5,512,171
4,198,201
4,251,406
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Amounts falling due after one year
Balances with bodies external to government
484,593
584,725
593,181
695,471
Total payables at 31 March
21(i)
484,593
584,725
593,181
695,471
22 . Financial instruments
(i) Analysis of financial instruments
Our financial assets include loans and receivables. We’ve also included IPv4 
addresses as assets held for sale in the table below. 
We haven’t included our investment in Working Links Employment Ltd, as this is 
categorised as available-for-sale. It amounts to £4.3 million (2013-14: £3.6 million).
31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Financial assets
Loans and investments
404,050
404,050
316,221
316,221
Other receivables
86,335
107,630
72,093
87,970
Cash and cash equivalents
19
136,689
147,791
256,064
262,337
Housing and Council Tax subsidy
20
338,873
338,873
163,241
163,241
Benefit overpayments
20
2,482,670
2,482,670
2,464,617
2,464,617
Social Fund 
20
936,263
936,263
1,082,605
1,082,605
European Social Fund 
20
493,915
493,915
398,957
398,957
Assets held for sale
11,919
11,919
-
-
Total
4,890,714
4,923,111
4,753,798
4,775,948
Less provision for impairment
(1,399,583)
(1,402,104)
(1,574,487)
(1,576,530)
3,491,131
3,521,007
3,179,311
3,199,418
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31 March 2015
31 March 2014
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Note
£000
£000
£000
£000
Financial liabilities
Other payables
2,784,650
2,830,481
3,571,539
3,615,420
Bank overdraft
21
2,167,058
2,167,058
47,185
47,547
European Social Fund
21
404,605
404,605
334,974
334,974
Total
5,356,313
5,402,144
3,953,698
3,997,941
(ii) Fair value
The carrying value of trade receivables and payables less impairment provision is 
assumed to approximate their fair value. The book values of our financial assets and 
liabilities at 31 March 2015 aren’t materially different from their fair values, so we 
haven’t shown them separately.  
(iii) Exposure to risk
Due to the largely non-trading nature of our activities and the fact that our cash 
requirements are met through the estimates process, we aren’t exposed to the 
same degree of financial risk as commercial business entities. Moreover, financial 
instruments play a smaller role in creating or managing risk than would apply to a 
non public-sector body of a similar size. This means we’re exposed to little credit, 
liquidity, market or interest rate risk. 
Foreign currency risk
Due to the time delay between preparing claims and receiving funds for the 
European Social Fund and between advance payment and final settlement, we 
are exposed to movements in the euro/sterling exchange rate. Other than this, our 
exposure to foreign currency risk is not significant.
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Our expenditur
23 . Provisions for liabilities and charges
31 March 2015
Core Department
Departmental Group
Note
£000
£000
e
Financial Assistance Scheme (FAS) provision
23(i)
4,739,729
4,739,729
Other provisions
23(ii)
115,944
118,060
4,855,673
4,857,789
(i) Analysis by type
FAS provision
2014-15
Core Department
Departmental Group
£000
£000
Balance at 1 April 2014
4,234,345
4,234,345
Provided in year
452,080
452,080
Utilised in year
(183,033)
(183,033)
Borrowing costs (unwinding of discount)
236,337
236,337
Balance at 31 March 2015
4,739,729
4,739,729
Other provisions
2014-15
Core Department
Departmental Group
£000
£000
Balance at 1 April 2014
13,181
15,268
Provided in year
104,544
105,555
Provisions not required written back
(1,286)
(1,291)
Utilised in year
(764)
(1,741)
Borrowing costs (unwinding of discount)
269
269
Balance at 31 March 2015
115,944
118,060
a. The Financial Assistance Scheme (FAS) helps members of defined benefit
occupational pension schemes that wound up under-funded when their employers
became insolvent from 1 January 1997 to 5 April 2005, before the introduction of the
Pension Protection Fund. FAS assets are disclosed in the FAS Trust Statement (page
166).
Regulations came into force in April 2010 to allow remaining assets to be transferred 
from FAS qualifying schemes to the government. The liabilities for the FAS payments 
associated with these asset transfers will eventually be added to this provision, but 
only when the assets are actually received by the government. Since April 2010, 
£1.63 billion of FAS assets and equivalent liabilities have been transferred to the 
government.
The value of the provision as at 31 March 2015 has been affected by:

an increase in asset-backed FAS liabilities as a result of more assets being
transferred in this year

increased anticipated assistance payments to members who will receive FAS in
the future (around 13% increase on previous assumption)

changes in short- and medium-term discount rates used (as per HM Treasury’s
PES paper (2014)), resulting in a decrease
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a 6% increase to the expectation of the total members in Great Britain and a
larger proportion of members compared to Northern Ireland
b. Within other provisions we have included a new provision of £96.5 million for
arrears of Employment and Support Allowance for 2014-15. This won’t be paid until
2015-16
c. The remaining other provisions comprise:

early departure costs and pension commitments associated with exit schemes

onerous contracts

refurbishment work required on vacation of leased properties

termination costs for other contracts

decommissioning costs

expected future costs of Industrial Injuries Benefit permanent allowance
payments to our employees who are injured at work and can’t perform their job
as a result
(ii) Analysis of expected timing of discounted flows
FAS provisions
Other provisions
Total
Core  Departmental 
Core  Departmental 
Core  Departmental 
Department
Group
Department
Group
Department
Group
£000
£000
£000
£000
£000
£000
Not later than 1 year
148,411
148,411
98,759
98,914
247,170
247,325
Later than 1 year and not later than 
5 years
685,478
685,478
11,421
11,738
696,899
697,216
Later than 5 years
3,905,840
3,905,840
5,764
7,408
3,911,604
3,913,248
Balance at 31 March 2015
4,739,729
4,739,729
115,944
118,060
4,855,673
4,857,789
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Our expenditur
24 . Contingent liabilities
Remploy Ltd
The Secretary of State for Work and Pensions has given a formal guarantee to 
e
Remploy Ltd (called the Disabled People’s Employment Corporation (GB) Ltd (DPEC) 
from 7 April 2015). If DPEC implements proposals for its liquidation, previously 
approved by the Secretary of State, the Secretary of State will pay DPEC (GB) Ltd a 
sum equal to its net liabilities.  We will also cover any shortfall in DPEC’s pension 
provision.
European Social Fund repayments
The Audit Authority produces an annual control report and opinion for the EU. Their 
opinion is largely based on the amount of error found during checks of claims that 
we’ve submitted, as managing authority of the European Social Fund in England and 
Gibraltar. If this exceeds the EU’s defined 2% tolerable error the opinion is likely to be 
qualified, with the risk that the EU would impose a financial correction. 
In addition, the European Anti Fraud Office (OLAF) will be investigating to assure the 
Director General of the European Commission that EU money is being spent correctly. 
OLAF will be sampling 3 contracts and if the review highlights errors then it could 
impose a financial correction.
A further risk arises because European Social Fund commitments are made in 
sterling, whereas funds are reimbursed from the EU in euros and are fixed at the 
start of the 7-year programme. 
Financial Assistance Scheme
Regulations came into force in April 2010 enabling the transfer to government of 
pension scheme assets that qualify for the Financial Assistance Scheme, along with 
their associated pension liabilities. As a result, the Financial Assistance Scheme 
pension provision (see note 23) will increase as the assets and the associated 
liabilities transfer. We estimate that the total value of the assets transferred to 
government will reach £1.847 billion. However, until the assets transfer it isn’t 
possible to estimate the impact on the Financial Assistance Scheme pension liability.
Transfer of State Pensions and benefits
In 2007, regulations were put in place to allow staff employed in certain EU 
institutions to transfer an enhanced cash value of potential entitlement to the State 
Pension and other contributory benefits to the Pension Scheme for Officials and 
Servants of Community Institutions. Until the transfer value has been calculated, 
a contingent liability arises. The overall time limit is 10 months between the date 
of application and the transfer payment. However, the limits can be extended if 
needed.
Since 2007 we’ve received 1,343 transfer applications. 80% of these have resulted in 
transfer payments.
Compensation claims
Compensation payments may become due as a result of claims against us by staff 
and members of the public. Claims relate to employment tribunal, personal injury 
and Civil Service Appeals Board cases. There is significant uncertainty around the 
estimated liability and the timing of payments. This uncertainty can fluctuate based 
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on factors such as medical evidence received, witness statements and whether 
claims proceed to trial or are settled early.
Single Fraud Investigation Service
Between July 2014 and March 2015, 336 full-time equivalent staff were transferred 
to us from local authorities via a legislative transfer scheme. This was part of the 
Single Fraud Investigation Service project. Under the terms of the Cabinet Office’s Fair 
Deal for staff pensions, employees can transfer their accrued pension benefits from 
a broadly comparable defined benefit pension scheme to the Principal Civil Service 
Pension Scheme (PCSPS). To make sure staff who transfer their accrued benefits 
are no worse off than if they had remained members of their existing schemes, we 
may be liable to provide additional pension contributions to the PCSPS. We can’t yet 
estimate how many people this will affect, or how much we will need to pay.
Vaccine damage payments
An appeal has been lodged with the Upper Tribunal about a ruling on a vaccine 
damage payment. If successful, this could lead to payment for this case and affect 
the outcome of 13 other cases which are still being assessed.
The Rent Service employee pensions
The Rent Service transferred from us to the Valuation Office Agency on 1 April 2009. 
Following the transfer, employees could participate in the Local Government Pension 
Scheme. If there’s a pension deficit we will be liable to meet the shortfall.
Compensation recovery
We recognise recoveries from insurance companies for compensation claims 
made by benefit recipients. Once the recovery is made the insurance company has 
the right to mandatory reconsideration or appeal within a set time period. If the 
reconsideration or appeal is successful recoveries are refunded to the insurance 
company. Analysis of existing data suggests that it is reasonable to recognise a 
contingent liability of £4 million for successful mandatory reconsideration or appeals.
Judicial review
We have contingent liabilities arising from payments that may become due as a 
result of judicial review claims against us. We can’t be sure of the timing, likelihood 
or amount of any settlements at this stage.
Trillium assets claim
Telereal Trillium have made a claim against us for costs they incurred for the 
maintenance of assets introduced as part of a major project change. We have 
disputed the claim and are continuing to negotiate with Telereal Trillium.
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25 . Financial guarantees, indemnities and letters 
Our expenditur
of comfort
We’ve entered into agreements which offer guarantees, indemnities or letters 
of comfort. None of these are a contingent liability within the meaning of IAS 37 
(Provisions, Contingent Liabilities and Contingent Assets) as the possibility of a 
e
transfer of economic benefit in settlement is too remote. We have followed the 
requirements of IAS 39 (Financial Instruments) to measure them.
These items are reported as contingent liabilities for internal reporting purposes only.  
They refer to instances where commercial cover has been provided to a supplier 
before contract signature. They have arisen within the normal course of business and 
include, as at the 31 March 2015:  
•  a letter of comfort issued on 2 May 2014 to the Independent Living Fund. This 
guarantees that funding of £278.3 million will be made available to cover all of 
the Independent Living Fund’s financial obligations incurred before 31 March 
2014, as they fall due up to March 2015.  This includes continuing support to 
claimants who were already receiving funding or had a firm offer of funding 
before 31 March 2014
•  a letter of comfort issued on 19 September 2014 to Remploy Ltd. This 
guarantees that core funding of £30.3 million will be made available to cover all 
financial obligations of Remploy Ltd including the transition costs until 31 March 
2015
•  a letter of comfort was issued on 23 July 2014 and 25 September 2014 to the 
Scottish Government to guarantee £0.2 million to cover the set up costs on the 
Health and Work Service in Scotland.  The Health and Work Service project was 
completed in December 2014
26 . Losses and special payments
2014-15
2013-14
Core  Departmental 
Core  Departmental 
Core  Departmental 
Core  Departmental 
Department
Group Department
Group Department
Group Department
Group
£000
£000
Cases
Cases
£000
£000
Cases
Cases
Losses
500,026
502,258
1,608,527
1,611,130
564,809
566,871
1,727,115
1,728,035
Special payments
4,688
4,817
10,749
10,765
6,818
6,909
13,549
13,554
Categories of losses and special payments are explained in HM Treasury’s Managing 
public money annexes 4.10 and 4.13 which is available on www.gov.uk.
(i) Losses arising from benefit overpayments, grants and subsidies
2014-15 
£000
Non-recoverable benefit overpayments
396,973
During the year we write off non-recoverable overpayments of benefit. 
These are where we don’t have the legal right to pursue them and 
where we can’t enforce repayment.
Customer fraud 
7,702
We write off overpayments resulting from customer fraud once we’ve 
exhausted our debt recovery processes.
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Guaranteed minimum pension 
592
In 2006 a system error affected 172,000 customers who received 
Pension Credit. This meant we didn’t take the correct action to review 
entitlement as widows approached the age of 60. As a result, we 
didn’t deduct guaranteed minimum payment from the award, as is 
appropriate. We wrote off 126 of these overpayments this year.
Duplicate Christmas bonus
1,057
Duplicate Christmas bonuses can arise because more than one benefit 
system can generate the payment. 
Social Fund
66,363
We make low-cost Funeral Expense Payments to people who receive 
(or whose partners receive) a qualifying benefit or tax credit. These 
are recoverable from the estate of the deceased, but we write most of 
them off as there usually aren’t enough assets in the estate. This year 
we wrote off 36,743 of these payments, with a total value of £49.2 
million.
Budgeting and Crisis Loans which can’t be recovered are written off 
subject to strict criteria. This year we wrote off 163,381 of these loans, 
with a total value of £16 million.
We also wrote off 5,767 irrecoverable grant overpayments amounting 
to £1.1 million.
Independent Living Fund grants 
1,188
The Independent Living Fund seeks formal recovery of grants that are 
based on incorrect information, or where grants haven’t been used 
for their intended purpose. This year we wrote off 347 of these grants 
where we deemed recovery to be unachievable.
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Our expenditur
(ii) Cash losses
Reimbursement of Child Maintenance overpayments 
7,515
Reimbursements arise when a paying parent has a change in 
circumstances and, even though they’ve told the Child Maintenance 
e
Group about this change, a delay in implementing the new 
maintenance assessment leads to an overpayment. We don’t 
recover these overpayments from the parent with care, but the Child 
Maintenance Group does refund the paying parent.
Incorrect Child Maintenance payments
1,653
This is where maintenance is paid to the wrong parent. It normally 
happens where the paying parent is associated with more than one 
receiving parent. We don’t recover these payments and the Child 
Maintenance Group makes the payment to the correct parent.
Return to Work Credit and In Work Credit overpayments
5,884
We wrote off 17,127 cases of administration debt relating to 
overpayments of Access to Work, Return to Work Credit and In Work 
Credit allowances. These all followed the exhaustion of our debt 
recovery processes.
Flexible Support Fund losses
1,287
Under the Flexible Support Fund, we give funds to some claimants to 
buy items to help them to start work. If, after a number of reminders, 
claimants don’t provide receipts, or give us incomplete or incorrect 
receipts, we treat the funding as a loss.
Court cost write-offs
1,000
We incur court costs in the collection of overpayment debt. These costs 
are recovered at the same time as these debts. This year we cleansed 
old and unrecoverable debt for court costs.
(iii) Constructive losses
Health & Disability Assessment Service – IT enablement project
1,402
This project to develop IT for work capability assessments was 
terminated in October 2014, due to a lack of clarity around future 
business requirements. We decided to wait until the new provider 
of the medical services contract was in place so we could work with 
them on replacement IT. This will be addressed in the next phase of 
Employment and Support Allowance.
Informatica software licences
3,670
In 2012 we purchased software licenses for Universal Credit live service 
to provide data management and data quality services. Changes in 
Universal Credit system design required a different software solution 
for data management. We have considered alternative plans to use 
the licenses elsewhere in the department but this was not possible. The 
licenses have therefore been impaired.
Security software
2,728
We developed online security software for claimants and agents in the 
Universal Credit live service. We no longer think this is needed. Instead, 
the Universal Credit digital service will provide a scalable alternative.
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Single Customer View  
1,056
This system was developed to give operational staff access to several 
benefit systems so they could deal with multi-benefit enquiries. Since 
the start of the programme we’ve improved efficiency so much that it 
reduces the potential benefits of the Single Customer View system.
Automated Service Delivery software licences
413
We bought software licences for the Automated Service Delivery 
project, and transferred those licences elsewhere when the project 
ended in 2012. This year we realised one of these licences was no 
longer in use. As a result, we’ve incurred a loss on disposal of this 
licence.
(iv) Other accountability issues
Fraud
A total of 51 internal fraud investigations into salary, expenses, 
contract and other non-benefit losses proved fraud of £0.1 million.
We completed 16 investigations into non-contributory and Jobseeker’s 
Allowance (contributory) benefits, proving fraud of £0.1 million. 
We also completed 6 investigations into potential fraud by contracted 
employment providers. The total value of these cases was £0.98 
million.
We make recoveries at a local level and don’t record them separately 
for disclosure. 
Serious and organised fraud
The Fraud Investigation Service investigates organised and systematic 
abuse of the benefits system. It concluded 117 investigations with a 
value of £0.4 million in 2014-15. Recovery action is taken at a local 
level and not recorded separately for disclosure.
27 . Incorrect payments
We are responsible for paying claimants the right benefit at the right time. Social 
Security legislation sets out the basis on which we calculate and pay benefits. The 
purpose of this legislation is to provide a regulatory framework that we operate 
within to support those in need.
In many instances Parliament has targeted benefits to claimants’ needs and 
circumstances to ensure an efficient use of overall resources. However, this 
introduces complexity and a risk of fraud and error, leading to some incorrect 
payments. We administer over 27 benefits, at more than 300 different rates, at 
any one time. Despite these challenges we pay approximately 97% of benefit 
expenditure correctly. 
Overall performance 
Along with HMRC, we first set out the government commitment to reduce annual 
welfare fraud and error overpayments by over 25% (or £1.4 billion) in October 2010. 
We have a target to reduce the level of fraud and error to 1.7% of total expenditure 
by March 2015. The latest 2014-15 fraud and error preliminary estimates were 
published on 14 May 2015, and show that £3.2 billion was overpaid in 2014-15, or 
1.9% of estimated total expenditure. The value of benefit underpaid has remained at 
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£1.4 billion in the 2014-15 preliminary estimates. The proportion underpaid has also 
Our expenditur
remained at 0.9%.
Our best estimates of the current levels of fraud and error in the benefits system are 
set out in the charts and tables 1-4 below.1 Please refer to the end notes below the 
tables when interpreting these figures.
e
Identified overpayments can be recovered from claimants, so not all money overpaid 
is truly “lost” from the public purse. We expect to recover around £900 million in 
2014-15.
We have an additional measure that takes away actual recoveries from estimated 
overpayments to give an estimate of the net loss to the system.2
We understand which benefits are most vulnerable. The two charts below show that 
the losses are not proportionate. For example, State Pension accounts for 51% of 
the estimated expenditure but only 4% of fraud and error, whereas Housing Benefit 
accounts for 14% of the estimated expenditure but 43% of fraud and error.
State Pension
£130m
Other benefits
Other benefits
£32bn
£650m
Income Support £3bn
Expenditure
Jobseeker’s 
Fraud and 
Income Support
Allowance £3bn
£120m
£168bn paid 
Error Loss
Employment and 
in benefits
Support Allowance
£3,200m 
Jobseeker’s 
Allowance
State Pension
£13bn
overpaid
£150m
£87bn
Pension Credit
£7bn
Employment and 
Housing Benefit
Support Allowance
£1,380m
Housing Benefit
£360m
£24bn
Pension Credit
£350m
Figures are rounded to the nearest £ billion or £10 million
1.   We  define  fraud as  where claimants deliberately claim money they aren’t entitled to. We split error into two 
categories: claimant error, which occurs when claimants provide inaccurate information, and official error
which occurs when we process information incorrectly or fail to apply rules.
2.   This method uses in-year figures for directly administered benefits plus estimated figures for Housing Benefit, 
taking off money recovered this year (regardless of when the recovery is from) from the money estimated to   have 
been overpaid this year. Further information can be found at www.gov.uk by searching for Fraud and Error in the 
Benefit System 2014-15.
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1. Estimated levels of overall fraud and error including confidence
intervals
2014-15
2013-14
Overpayments
Fraud
0.7%
(0.5, 1.0)
0.7%
(0.5, 1.0)
£1.1bn
(0.9, 1.6)
£1.1bn
(0.9, 1.6)
Claimant error
0.8%
(0.6, 1.0)
0.9%
(0.7, 1.1)
£1.3bn
(1.0, 1.6)
£1.5bn
(1.2, 1.9)
Official error
0.4%
(0.3, 0.6)
0.4%
(0.3, 0.6)
£0.7bn
(0.6, 1.0)
£0.7bn
(0.5, 1.0)
Total overpayments
1 .9%
(1 .6,2 .2)
2 .0%
(1 .7,2 .4)
£3 .2bn
(2 .7,3 .7)
£3 .3bn
(2 .8,3 .9)
Underpayments
Fraud
0.0%
(0.0, 0.0)
0.0%
(0.0, 0.0)
£0.0bn
(0.0, 0.0)
£0.0bn
(0.0, 0.0)
Claimant error
0.6%
(0.3, 0.8)
0.6%
(0.3, 0.8)
£0.9bn
(0.6, 1.4)
£0.9bn
(0.6, 1.4)
Official error
0.3%
(0.2, 0.4)
0.3%
(0.3, 0.4)
£0.5bn
(0.4, 0.6)
£0.5bn
(0.4, 0.6)
Total underpayments
0 .9%
(0 .6, 1 .1)
0 .9%
(0 .6, 1 .2)
£1 .4bn
(1 .0, 1 .9)
£1 .4bn
(1 .1, 1 .9)
Total expenditure
£168 .1bn
£163 .9bn
2. Jobseeker’s Allowance and low income benefits
Income Support
Jobseeker’s Allowance
Pension Credit
Housing Benefit
Overpayments
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2.4%
2.1%
2.7%
2.6%
2.0%
1.9%
1.9%
1.4%
Fraud
£70m
£80m
£80m
£120m
£130m
£140m
£470m
£340m
1.0%
1.3%
0.6%
0.3%
1.6%
2.1%
3.2%
3.8%
Claimant error
£30m
£50m
£20m
£10m
£110m
£150m
£770m
£900m
0.4%
0.5%
*1.5%
0.8%
1.6%
1.8%
0.6%
0.6%
Official error
£10m
£20m
£50m
£30m
£110m
£130m
£150m
£150m
3 .9%
4 .0%
*4 .8%
3 .7%
5 .2%
5 .7%
5 .7%
5 .8%
Total Overpayments
£120m
£150m
£150m
£160m
£350m
£410m
£1,380m
£1,380m
0 .8%
1 .0%
0 .9%
0 .4%
2 .0%
2 .2%
*1 .2%
1 .6%
Total Underpayments
£30m
£40m
£30m
£20m
£130m
£160m
£300m
£370m
Total Expenditure
£3 .0bn
£3 .7bn
£3 .1bn
£4 .4bn
£6 .7bn
£7 .2bn
£24 .3bn
£23 .9bn
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Our expenditur
3. State Pension and disability benefits
Employment and Support 
Allowance
Incapacity Benefit
Disability Living 
Allowance
State Pension
Overpayments
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
*0.9%
1.6%
0.3%
0.3%
0.5%
0.5%
0.0%
0.0%
e
Fraud
£120m
£170m
£0m
£0m
£70m
£70m
£0m
£0m
0.8%
0.8%
0.9%
0.9%
0.6%
0.6%
0.1%
0.1%
Claimant error
£100m
£90m
£0m
£10m
£90m
£90m
£70m
£70m
1.1%
1.0%
1.2%
1.2%
0.8%
0.8%
0.1%
0.1%
Official error
£140m
£100m
£0m
£10m
£110m
£110m
£60m
£40m
2 .8%
3 .4%
2 .4%
2 .4%
1 .9%
1 .9%
0 .2%
0 .1%
Total Overpayments
£360m
£360m
£10m
£30m
£260m
£260m
£130m
£110m
1 .6%
1 .5%
0 .7%
0 .7%
2 .5%
2 .5%
0 .2%
0 .1%
Total Underpayments
£200m
£160m
£0m
£10m
£350m
£340m
£150m
£120m
Total Expenditure
£12 .8bn
£10 .5bn
£0 .3bn
£1 .2bn
£13 .8bn
£13 .8bn
£86 .5bn
£83 .1bn
4. Fraud and error in other benefits
Carer’s Allowance
Interdependencies
Other Unreviewed
2014-15
2013-14
2014-15
2013-14
2014-15
2013-14
5 .5%
5 .5%
z
z
1 .7%
1 .8%
Total Overpayments
£130m
£120m
£10m
£40m
£250m
£250m
0 .1%
0 .1%
z
z
1 .6%
1 .5%
Total Underpayments
£0m
£0m
z
z
£240m
£210m
Total Expenditure
£2 .3bn
£2 .1bn
z
z
£15 .1bn
£14 .0bn
Notes to the tables at 1-4:
1. The 2014-15 data comes from DWP National Statistics: ‘Fraud and Error in the
Benefit System:  Preliminary 2014-15 Estimates’. Figures are based on fraud and
error National Statistics for October 2013 to September 2014 and estimated benefit
expenditure for 2014-15. The 2013-14 data comes from DWP National Statistics:
‘Fraud and Error in the Benefit System:  Preliminary 2013-14 Estimates’. Figures are
based on fraud and error national statistics for October 2012 to September 2013 and
estimated benefit expenditure for 2013-14.
2. Total expenditure figures for 2014-15 and 2013-14 were the latest available for
the financial year at the time of producing the fraud and error estimates.
3. All expenditure values in the table are rounded to the nearest £100m and
monetary estimates are rounded to the nearest £10m.
4. We review a selection of benefits for fraud and error each year. Estimates for
other benefits come from previous review exercises, or proxies. Please refer to the
latest National Statistics publication for further details (see ‘Benefit fraud and error
estimation and uncertainty’ below for details).
5. Figures expressed as percentages give the overpayments and underpayments as a
percentage of the benefit paid out in the year.
6. Rows and columns may not equal the totals due to rounding.
7. Approximate 95% confidence intervals are given in table 1. This allows for
statistical uncertainty caused by the sampling approach. Further uncertainties arise
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from imperfections in the review process. Where possible we have quantified these 
and incorporated them into the 95% confidence intervals. 
8. Of the differences between 2014-15 and 2013-14 preliminary estimates, only
figures marked with a * are statistically significant at a 95% level of confidence.
Where changes aren’t statistically significant, differences are likely to be due to
sampling variation. This suggests that these estimates are stable over time with little
change year on year.
9. We have changed the calculation methodology for Housing Benefit. We now
use the same method for “netting” underpayments from overpayments as we do
for other benefits we continuously measure. We have also changed the way we
count claims we haven’t been able to check. Please refer to the latest National
Statistics publication for further details (see ‘Benefit fraud and error estimation and
uncertainty’ below for details).
10. The 2004-05 Disability Living Allowance (DLA) National Benefit Review identified
cases where the change in claimant’s needs had been so gradual that it would be
unreasonable to expect them to know when their entitlement to DLA might have
changed. These cases don’t result in a recoverable overpayment as we cannot
identify when the change occurred. Because legislation requires the Secretary of
State to prove that entitlement to DLA is incorrect, rather than requiring the claimant
to inform us that their needs have changed, cases in this sub-category are legally
correct. The difference between what claimants in these cases are receiving in DLA
and related premiums in other benefits and what they would receive if their benefit
was reassessed was estimated to be around £0.6 billion (+/-£0.2 billion) in 2005-06.
Based on 2014-15 DLA expenditure this figure is now estimated to be around £1.0
billion (+/-£0.3 billion). This component is not included in the total above.
11. “Interdependencies” is an estimate of the knock-on effects of DLA overpayments
on caring and disability premiums on income-related benefits, which depend on the
rate of DLA in payment.
12. A ‘z’ indicates not applicable.
Benefit fraud and error estimation and uncertainty
We are rigorous in estimating levels of fraud and error. Our estimates are produced 
to the exacting standards of the UK Statistics Authority national statistics protocols. 
This ensures their production is independent of departmental and ministerial 
influence.
Our strategy for estimating the level of incorrect payments takes into account the 
value of the benefit, its risk profile and previous experience. 
Further information on our estimation strategy can be found at www.gov.uk/
government/collections/fraud-and-error-in-the-benefit-system (the latest National 
Statistics publication and the technical appendix document links towards the bottom 
of the webpage).
When interpreting the statistics, please bear in mind that the underpayment 
estimates don’t include people who are entitled to benefits but who do not apply, 
or whose applications are incorrectly rejected. Our policy is to correct all cases of 
underpayment.
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Our expenditur
28 . Related party transactions  
We sponsor the arm’s length bodies listed in ‘Our controls’ page 56. These include 
4 public corporations: Pension Protection Fund, National Employment Savings Trust 
Corporation, Remploy Ltd and Office for Nuclear Regulation. We’re also responsible 
for the Social Fund and the European Social Fund. We see these bodies as related 
e
parties that we had various material transactions with during the year. 
In addition, we’ve had transactions with other government departments, other 
central government bodies, local authorities and some charitable organisations. Most 
of these transactions have been with Government Banking Services, Post Office Ltd, 
the British Broadcasting Corporation, the Department of Health, the Northern Ireland 
Social Security Agency, the Ministry of Defence, HM Revenue & Customs, Government 
Legal Services, the Department for Education and the Valuation Office Agency. We 
also transact with Working Links Employment Ltd.
No minister, board member, key manager or other related party has undertaken any 
material transactions with the department during the year.
29 . Third-party assets 
Some money is held on behalf of third-parties and relates to maintenance collected 
from non-resident parents that is due to be paid to parents with care or the Secretary 
of State. These are not departmental assets and are not included in these accounts 
but are accounted for in the client funds account of the Child Maintenance Group. 
The cash balance held at the reporting date is £23.3 million (2013-14: £24.3 million). 
30 . Office for Nuclear Regulation
Office for Nuclear Regulation (ONR) was formed on 1 April 2011 as an in-house 
agency of the Health and Safety Executive (HSE). It is responsible for all nuclear 
sector regulation across the UK. The Energy Bill 2013, which gained royal assent on 
18 December 2013, established ONR as an independent statutory corporation from 1 
April 2014. All staff, assets and liabilities which relate to the functions carried out by 
ONR transferred from HSE to the new body on 1 April 2014.
From that date, ONR has been outside our accounting boundary. We have shown 
the impact of the transfer (£11.3 million) in the Statement of Comprehensive Net 
Expenditure.
31 . Events after the reporting period
There were no events after the reporting period.
The Accounting Officer authorised these financial statements for issue on  
 
10 July 2015.
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Trust Statement
166 Department for Work and Pensions Annual Report and Accounts 2014-15
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Trust St
Financial Assistance Scheme
at
Trust Statement
emen
for the year ended 31 March 2015
t
Statement of Principal Accounting Officer’s 
Responsibilities
Under the Government Resources and Accounts Act 2000, HM Treasury has directed 
the department to prepare for each financial year a statement of accounts in the 
form and on the basis set out in the Accounts Direction. The accounts are prepared 
on an accruals basis and must give a true and fair view of the state of affairs in 
respect of the Trust Statement and of its revenue and expenditure and cash flows for 
the financial year.
In preparing the accounts, the Accounting Officer is required to comply with the 
requirements of the Government Financial Reporting Manual (FReM) and in particular 
to:

observe the Accounts Direction issued by HM Treasury, including the relevant
accounting and disclosure requirements, and apply suitable accounting policies
on a consistent basis

make judgements and estimates on a reasonable basis

state whether applicable accounting standards as set out in the FReM have been
followed, and disclose and explain any material departures in the accounts

prepare the accounts on a going-concern basis
HM Treasury has appointed me, the Permanent Secretary, as Accounting Officer with 
overall responsibility for the preparation of the Trust Statement.
The responsibilities of an accounting officer are set out in Managing public money, 
published by HM Treasury. These include responsibility for the propriety and 
regularity of the public finances for which the accounting officer is answerable, 
and responsibility for keeping proper records and for safeguarding the assets of the 
department or non-departmental public body for which the accounting officer is 
responsible.
Governance Statement
Our governance statement, covering both the departmental accounts and the Trust 
Statement, starts on page 76.
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The certificate and report of the Comptroller and 
Auditor General to the House of Commons 
I certify that I have audited the financial statements of the Financial Assistance 
Scheme Trust Statement for the year ended 31 March 2015 under the Government 
Resources and Accounts Act 2000. The financial statements comprise the Statement 
of Revenue and Expenditure, the Statement of Financial Position, the Statement of 
Cash Flows and the related notes. These financial statements have been prepared 
under the accounting policies set out within them. 
Respective responsibilities of the Accounting Officer and auditor
As explained more fully in the Statement of Accounting Officer’s Responsibilities, the 
Accounting Officer is responsible for the preparation of the financial statements and 
for being satisfied that they give a true and fair view. My responsibility is to audit, 
certify and report on the financial statements in accordance with the Government 
Resources and Accounts Act 2000. I conducted my audit in accordance with 
International Standards on Auditing (UK and Ireland). Those standards require me 
and my staff to comply with the Auditing Practices Board’s Ethical Standards for 
Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether caused by fraud or error. 
This includes an assessment of: whether the accounting policies are appropriate 
to the circumstances of the Financial Assistance Scheme Trust Statement and 
have been consistently applied and adequately disclosed; the reasonableness of 
significant accounting estimates made by the Financial Assistance Scheme; and 
the overall presentation of the financial statements. In addition I read all the 
financial and non-financial information in the Annual Report to identify material 
inconsistencies with the audited financial statements and to identify any information 
that is apparently materially incorrect based on, or materially inconsistent with, 
the knowledge acquired by me in the course of performing the audit. If I become 
aware of any apparent material misstatements or inconsistencies I consider the 
implications for my certificate and report.
I am required to obtain evidence sufficient to give reasonable assurance that the 
expenditure and income recorded in the financial statements have been applied to 
the purposes intended by Parliament and the financial transactions recorded in the 
financial statements conform to the authorities which govern them.
Opinion on regularity
In my opinion, in all material respects the expenditure and income recorded in the 
financial statements have been applied to the purposes intended by Parliament 
and the financial transactions recorded in the financial statements conform to the 
authorities which govern them.
168 Department for Work and Pensions Annual Report and Accounts 2014-15
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T
Opinion on financial statements 
rust St
In my opinion:
at

the Financial Assistance Scheme Trust Statement gives a true and fair view of
emen
the state of affairs of the Financial Assistance Scheme as at 31 March 2015 and
of the net revenue for the year then ended, and
t

the financial statements have been properly prepared in accordance with the
Government Resources and Accounts Act 2000 and HM Treasury directions
issued thereunder.
Opinion on other matters
In my opinion:

the information given in the Annual Report for the financial year for which the
financial statements are prepared is consistent with the financial statements.
Matters on which I report by exception
I have nothing to report in respect of the following matters which I report to you if, in 
my opinion:

adequate accounting records have not been kept or returns adequate for my
audit have not been received from branches not visited by my staff, or

the financial statements are not in agreement with the accounting records and
returns, or

I have not received all of the information and explanations I require for my audit,
or

the Governance Statement does not reflect compliance with HM Treasury’s
guidance.
Report 
I have no observations to make on these financial statements.
Sir Amyas C E Morse 
National Audit Office
Comptroller and Auditor General 
157 -197 Buckingham Palace Road 
13 July 2015 
Victoria
London SW1W 9SP
168
169
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Statement of Revenue, Other Income and 
Expenditure
for the year ended 31 March 2015
2014-15
2013-14
Note  
£000
£000
Revenue
Income from pension schemes
2
522,543
435,804
Total revenue
522,543
435,804
Other income
Investment income
4
3,882
2,207
Change in fair value of investments
5
3,905
(4,068)
Total other income
7,787
(1,861)
Total revenue and other income
530,330
433,943
Total expenditure
-
-
Net revenue for consolidated fund
530,330
433,943
There were no recognised gains or losses accounted for outside the above Statement 
of Revenue, Other Income and Expenditure.
The notes on pages 173 to 178 form part of this statement.
170 Department for Work and Pensions Annual Report and Accounts 2014-15
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T
Statement of Financial Position
rust St
as at 31 March 2015
at
emen
31 March 
31 March 
2015
2014
t
Note  
£000
£000
Non-current assets
Financial assets - annuity policies
6
92,908
53,094
Financial assets - other
6
2,685
128
Total non-current assets
95,593
53,222
Current assets
Transfer-in receivables
6
761
3
Cash and cash equivalents
6
281,717
96,576
Total current assets
282,478
96,579
Total current liabilities
-
-
Net current assets
282,478
96,579
Net current assets plus non-current assets
378,071
149,801
Non-current liabilities
-
-
Total net assets
378,071
149,801
Represented by
Balance on the consolidated fund account
7
378,071
149,801
Total funds
378,071
149,801
Robert Devereux
Accounting Officer
10 July 2015
The notes on pages 173 to 178 form part of this statement.
170
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Statement of Cash Flows
for the year ended 31 March 2015
2014-15
2013-14
Note  
£000
£000
Net cash flow from operating activities 
487,201
408,980
Cash paid to the consolidated fund
(302,060)
(323,980)
increase/(decrease) in cash
185,141
85,000
Notes to the Statement of Cash Flows 
A: Reconciliation of the net cash flow to movement in net funds
Net revenue for the consolidated fund
530,330
433,943
(Increase)/decrease in non-current assets
6
(42,371)
(26,179)
(Increase)/decrease in receivables
6
(758)
1,216
Increase/(decrease) in current liabilities
-
-
Increase/(decrease) in non-current liabilities
-
-
Net cash flow from operating activities
487,201
408,980
B: Analysis of changes in net funds 
 
 
Increase/(decrease) in cash
6
185,141
85,000
Net funds at 1 April
6
96,576
11,576
Net funds at 31 March
6
281,717
96,576
The notes on pages 173 to 178 form part of this statement.
 
172 Department for Work and Pensions Annual Report and Accounts 2014-15
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T
Notes to the Trust Statement
rust St
for the year ended 31 March 2015
at
emen
1. Statement of accounting policies
t
1 .1 Basis of accounting
The Trust Statement is prepared in accordance with the Accounts Direction issued by 
HM Treasury on 18 December 2014, under section 7 of the Government Resources 
and Accounts Act 2000. The accounts direction requires the department to prepare 
accounts in accordance with the 2014-15 FReM.   
The Trust Statement is prepared in accordance with the accounting policies set out 
below.  The accounting policies have been developed with reference to International 
Financial Reporting Standards (IFRS) and other relevant guidance. 
Where the FReM permits a choice of accounting policy, we’ve picked the policy 
we judge to be most appropriate to the circumstances of the Financial Assistance 
Scheme for the purpose of giving a true and fair view. We’ve applied these policies 
consistently in dealing with items that we consider to be material to the accounts.
The income contained in this statement is those flows of funds which the 
department handles on behalf of the consolidated fund where it is acting as agent 
rather than as principal.
1 .2 Accounting convention
The Trust Statement has been prepared under the historical cost convention, 
modified where material by the fair valuation of financial assets as determined by 
the relevant accounting standard.  All income and expenditure is accounted for on 
an accruals basis.
1 .3 Income recognition
In accordance with IAS 18 (Revenue Recognition), the department recognises the 
transfer of assets from schemes as income if a transfer notice has been issued by 
the reporting date and if we judge that the transfer of those assets is probable. Net 
assets recognised under this policy are stated net of amounts due for professional 
services or other liabilities incurred by scheme trustees before the transfer of a 
scheme into the Financial Assistance Scheme.
Annuity income arising from insurance policies held by the Financial Assistance 
Scheme after transfer from pension schemes is recognised on a cash basis.
1 .4 Financial instruments
a. Definition
A financial instrument is any contract that gives rise to a financial asset of one entity
and a financial liability or equity instrument of another entity.
A financial asset is any asset that is:

cash

equity

a contractual right to receive cash or another financial asset from another entity

a contractual right to exchange financial instruments with another entity under
conditions that are potentially favourable
172
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A financial liability is any liability that is a contractual obligation to:

deliver cash or another financial asset to another entity, or

exchange financial instruments with another entity under conditions that are
potentially unfavourable
b. Recognition
The department recognises financial assets and liabilities when it becomes party to
the contracts that give rise to them.
The department derecognises financial assets when the right to receive cash 
flows has expired or the department has transferred substantially all the risks and 
rewards of ownership or control of the asset. The department derecognises financial 
liabilities when the obligation to deliver cash or another financial asset is discharged, 
cancelled or expires.
c. Classification of financial instruments
Financial instruments fall into categories which are determined at initial recognition
in accordance with IAS 39 (Financial Instruments: Recognition and Measurement).
The categories are:

financial assets or liabilities at fair value through profit or loss are analysed
between:
(a) those designated at fair value through profit or loss upon initial recognition,
and
(b) those classified as held for trading

loans and receivables

held-to-maturity investments

available-for-sale financial assets

financial liabilities measured at amortised cost
d. Financial assets or liabilities at fair value through profit or loss upon initial
recognition
Financial assets and liabilities that are managed and evaluated on a fair-value basis
are designated at fair value through profit or loss at inception.
This category includes insurance contracts in the form of annuity policies.
e. Available-for-sale financial assets
Available-for-sale financial assets are non-derivative assets that are designated as
available for sale or which are recognised at fair value but not classified in any of the
other categories.
This classification includes any illiquid financial assets inherited from schemes and 
transferred into the Financial Assistance Scheme plus any asset recoveries from 
insolvent sponsoring employers which have not yet been liquidated.
f. Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable
payments that aren’t quoted in an active market and which aren’t classified as
available-for-sale. Loans and receivables are initially recognised at fair value and
subsequently held at amortised cost. The fair value of trade receivables is usually the
original invoiced amount.
This category includes investment income receivables, transfer-in receivables and 
cash at bank.
174 Department for Work and Pensions Annual Report and Accounts 2014-15
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g. Financial liabilities measured at amortised cost
Trust St
Trade payables and accruals do not bear interest and are stated at amortised cost.
This category includes net amounts payable to brokers for outstanding settlements
at
and amounts due for professional services incurred before the transfer of a scheme
emen
into the Financial Assistance Scheme.
t
h. Fair value
The fair value of a financial instrument is the amount for which an asset could be
exchanged, or a liability settled, between knowledgeable, willing parties in an arm’s
length transaction.
Financial instruments held at fair value by the Financial Assistance Scheme consist 
mainly of annuity policies received from transferring pension schemes.  We 
assess the fair value of these annuity policies using actuarial techniques based on 
demographic and financial factors, including:

forecasting future annuity income flows relating to the annuitants covered by
the policies

discounting future cash flows to a net present value, which is treated as the fair
value
This valuation process is carried out by qualified actuaries working in the Actuarial 
– Policy and Process team of the Board of the Pension Protection Fund, acting as
the scheme manager of the Financial Assistance Scheme.  The process requires
the board to make estimates and assumptions that affect reported amounts.  The
selection of valuation assumptions, such as the discount rate to apply to cash flows
generated by annuity contracts, requires the board to exercise judgement.  This
means actual results could differ from the estimates and judgements.
1 .5 Transfer notices
Schemes may exit the process of being assessed for entry into the Financial 
Assistance Scheme by the scheme manager issuing a transfer notice under 
regulation 29 of the Financial Assistance Scheme Regulations 2005 (SI2005/1986). 
This notice means the government assumes responsibility for the scheme, so all 
the property, rights and liabilities of the scheme are transferred to the Financial 
Assistance Scheme. The following accounting policies apply to this transfer of assets 
and liabilities:

cash, insurance contracts and other investment assets are transferred to the
legal ownership of the government at fair value as at the effective date of the
transfer notice. “Fair value” carries the same meaning as in note 1.4 governing
the valuation of financial instruments

asset recoveries due from insolvent employers under section 75 of the Pensions
Act. Where appropriate, the department will also disclose contingent assets for
recoveries which are less than probable

current assets and current liabilities are transferred to the Financial Assistance
Scheme at fair value. Receivables for which recovery is probable are recognised
on an accruals basis
2. Income from pension schemes
2014-15
2013-14
£000
£000
FAS 1 scheme assets transferred
(i)
1,860
1,021
FAS 2 scheme assets transferred
(ii)
520,683
434,783
Total income from pension schemes
522,543
435,804
(i) FAS1 schemes are schemes that qualify for the Financial Assistance Scheme,
174
175
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have completed annuitisation and, as part of the finalisation of their winding up, 
surrender any of their residual assets to the government. These residual assets arise 
when, for example, the scheme trustees overestimate the reserves required to pay 
final winding-up expenses and it is not economic to allocate the small amounts of 
cash to the annuities already purchased. The Financial Assistance Scheme pays FAS1 
beneficiaries amounts to top up the annuities purchased by the scheme trustees to 
the benefit levels that it has promised them.
(ii) FAS2 schemes are schemes that qualify for the Financial Assistance Scheme, have
been prevented from annuitising and, as part of the finalisation of their winding up,
surrender all of their qualifying assets to the government. The Financial Assistance
Scheme pays FAS2 beneficiaries the full amount of the benefit it has promised them.
3. Interest on operating bank accounts
The bank account set up to receive income from annuity policies earns interest. 
This account is managed by the board of the Pension Protection Fund. This regularly 
transfers any money received to the department’s Government Banking Service 
(GBS) account. The frequency of these transfers means only minimal interest is 
earned.
The bank account established to receive money from pension schemes transferring 
into the Financial Assistance Scheme does not earn interest. Nor does the 
department’s GBS account that is used to transfer this money to the consolidated 
fund.
4. Investment income
All investment income disclosed in the Statement of Revenue, Other Income and 
Expenditure is income from annuity policies.
5. Financial assets
31 March 2015
31 March 2014
£000
£000
Balance at 1 April
53,222
27,043
Asset transfers
38,566
30,347
Redemption of loan notes
(100)
(100)
Change in fair value
3,905
(4,068)
Balance at 31 March
95,593
53,222
The financial assets consist largely of annuity policies. The change in the assessed 
fair value of those policies over the year particularly reflects:

changes in the rates used to discount future annuity income flows to a net
present value

the actual mortality experience of Financial Assistance Scheme annuitants
compared to previous assumptions

annuity income received from insurers
176 Department for Work and Pensions Annual Report and Accounts 2014-15
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T
6. Financial instruments and related risks
rust St
(i) Financial instruments by category 
at
emen
31 March 2015
31 March 2014
£000
£000
t
Financial assets designated at fair value 
through profit or loss
Annuity policies
92,908
53,094
Other financial assets
2,685
128
95,593
53,222
Loans and receivables
Cash and cash equivalents
281,717
96,576
Transfer-in receivables
761
3
282,478
96,579
Liabilities
-
-
Total financial instruments
378,071
149,801
The amounts disclosed as “cash and cash equivalents” consist entirely of cash 
deposits; the Financial Assistance Scheme held no cash-equivalent financial 
instruments at either year end.  The cash deposits can be further analysed as 
follows:
Cash deposits held at:
31 March 2015
31 March 2014
£000
£000
Commercial banks
9,560
136
Government Banking Service
272,157
96,440
Total cash deposits
281,717
96,576
The increase in the value of cash held by the Financial Assistance Scheme at the end 
of the accounting period is a result of the number of high-value scheme transfers 
completed in March 2015.
The amounts stated under loans and receivables measured at amortised cost have 
carrying values which are not materially different from their fair values. So we’ve 
assumed the carrying values of these financial instruments approximate to their fair 
value.
(ii) Financial risks
IFRS 7 ‘Financial Instruments: Disclosures’ requires users of financial statements to 
be able to evaluate the nature and extent of risks arising from financial instruments 
and how the entity manages those risks. We discuss how this affects the department 
below, along with how we measure and manage those risks.
a. Interest rate risk
This is the risk that the fair value or future cash flows of a financial instrument will 
fluctuate because of changes in market interest rates. As disclosed in note 3, we 
have no significant interest-bearing assets or liabilities.  This means cash flows 
are largely independent of market interest rates. The department therefore hasn’t 
disclosed the interest profile of its financial assets and liabilities.
176
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b. Credit risk
This is the risk that a counterparty to a financial instrument will cause us a financial 
loss by failing to discharge an obligation.  Exposure to credit risk arises from 
counterparty risk on annuity policies, cash and cash equivalents, and transfer-in 
receivables. The department is satisfied that the credit quality of all the financial 
instruments exposed to credit risk is satisfactory, as the instruments consist of 
annuity contracts with insurance companies, receivables with pension schemes and 
other parties where recovery of the debt is probable.
At the reporting date, the financial assets exposed to credit risk amounted to:
31 March 2015
31 March 2014
£000
£000
Annuity policies
92,908
53,094
Other financial assets
2,685
128
Cash and cash equivalents
281,717
96,576
Transfer-in receivables
761
3
Total
378,071
149,801
c. Liquidity risk
This is the risk that the department will find it difficult to meet obligations associated 
with financial liabilities arising as a result of Financial Assistance Scheme operations. 
The department manages this risk by maintaining a small balance in its operating 
bank account in order to meet these liabilities. The liabilities consist entirely of 
scheme-related expenses settled after issue of transfer notices.
All scheme-related expenses are current liabilities and so are due within a year.
7. Balance on the consolidated fund account
2014-15
2013-14
£000
£000
Balance on consolidated fund account at 1 April
149,801
39,838
Net revenue  for the consolidated fund
530,330
433,943
Amount paid to the consolidated fund
(302,060)
(323,980)
Balance on consolidated fund account at 31 March
378,071
149,801
 
178 Department for Work and Pensions Annual Report and Accounts 2014-15
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T
Accounts direction given by HM Treasury in 
rust St
accordance with section 7(2) of the Government 
at
emen
Resources and Accounts Act 2000 
1. The department shall prepare a Trust Statement (the Statement) for the financial
t
year ended 31 March 2015 for the revenue and other income, as directed by the
Treasury, collected by the department as an agent for others, in compliance with the
accounting principles and disclosure requirements of the edition of the Government
Financial Reporting Manual by HM Treasury (FReM) which is in force for 2014-15.
2. The Statement shall be prepared, as prescribed in the accounts direction, so as to
give a true and fair view of:
(a) the state of affairs relating to the collection and allocation of taxes, licence fees,
fines and penalties by the department as agent and of the expenses incurred in
the collection of those taxes, licence fees, fines and penalties in so far as they can
properly be met from that revenue and other income
(b) the revenue and expenditure
(c) the cash flows for the year then ended
3. The Statement shall also be prepared so as to provide disclosure of any material
expenditure or income that has not been applied to the purposes intended by
Parliament or material transactions that have not conformed to the authorities
which govern them.
4. When preparing the Statement, the department shall comply with the guidance
given in the FReM (Chapter 8). The department shall also agree with HM Treasury
the format of the Principal Accounting Officer’s Foreword to the Statement, and
the supporting notes, and the accounting policies to be adopted, particularly in
relation to revenue recognition. Regard shall also be given to all relevant accounting
and disclosure requirements in Managing Public Money and other guidance issued
by HM Treasury, and to the principles underlying International Financial Reporting
Standards.
5. Compliance with the requirements of the FReM will, in all but exceptional
circumstances, be necessary for the accounts to give a true and fair view. If, in
these exceptional circumstances, compliance with the requirements of the FReM is
inconsistent with the requirement to give a true and fair view, the requirements of
the FReM should be departed from only to the extent necessary to give a true and
fair view. In such cases, informed and unbiased judgement should be used to devise
an appropriate alternative treatment which should be consistent with both the
economic characteristics of the circumstances concerned and the spirit of the FReM.
Any material departure from the FReM should be discussed in the first instance with
HM Treasury.
6. The Statement shall be transmitted to the Comptroller and Auditor General for
the purpose of his examination and report by a date agreed with the Comptroller
and Auditor General and HM Treasury to ensure compliance with the administrative
deadline for laying the audited accounts before Parliament before the Summer
Recess.
7. The Statement, together with this direction (but with the exception of the related
appendices) and the report produced by the Comptroller and Auditor General under
section 7(2) of the Government Resources and Accounts Act 2000, shall be laid
before Parliament at the same time as the department’s Resource Accounts for the
year, unless the Treasury have agreed that the Statement may be laid at a later date.
Ross Campbell
Deputy Director, Government Financial Reporting 
Her Majesty’s Treasury
18 December 2014
178
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Annex
180 Department for Work and Pensions Annual Report and Accounts 2014-15
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Annex
Annex 1: Core tables
Table 1: Public spending
2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million
£ million
£ million
£ million
£ million
£ million
£ million
Resource DEL6
Section A: Operational Delivery
1,399 
1,294 
2,487 
2,865 
2,866 
2,191 
1,631 
Section B: Health and Safety Executive (net)
231 
203 
175 
162 
155 
139 
141 
Child Maintenance and Enforcement 
Commission (net)
448 
391 
484 
155 



Section C: European Social Fund


15 
122 
(3) 


Section D: Executive Arm’s Length Bodies 
(net)
431 
391 
375 
366 
354 
348 
115 
Section E: Employment Programmes
1,313 
1,814 
876 
802 
1,037 
950 
904 
Financial Assistance Scheme
33 
45 
73 
109 
153 


Section F: Support for Local Authorities
614 
585 
546 
529 
644 
536 
296 
Section G: Other Programmes
145 
197 
183 
89 
62 
50 
12 
Section H: Other Benefits
150 
173 
90 
90 
212 
206 
129 
Section I: Departmental operating costs
3,100 
2,835 
1,453 
1,461 
1,485 
2,150 
2,181 
Section J: Unallocated provision






549 
Section K: National Insurance Fund
1,056 
1,093 
821 
706 
611 
547 
526 
Section L: Expenditure incurred 
by the Social Fund
139 
131 
46 
39 
37 
33 
40 
Total Resource DEL
9,060 
9,152 
7,624 
7,497 
7,615 
7,152 
6,522 
Of which:
Staff costs
3,585 
3,553 
3,188 
3,066 
2,999 
2,776 
2,410 
Purchase of goods and services
2,756 
2,945 
2,111 
2,088 
2,259 
2,441 
2,052 
Income from sales of goods and services
(354)
(373)
(284)
(154)
(233)
(201)
(218) 
Current grants to local government (net)
760 
705 
581 
621 
908 
724 
421 
Current grants to persons and non-profit 
bodies (net)
1,161 
1,377 
594 
536 
555 
392 
230 
Current grants abroad (net)
(338) 
(540) 
(248) 
(187) 
(139) 
(282) 
(400) 
Subsidies to private sector companies


29 
95 
108 
97 
121 
Subsidies to public corporations
117 
174 
206 
141 
120 
111 
61 
Net public service pensions3







Rentals
1,124 
1,126 
983 
754 
693 
652 
716 
Depreciation2
222 
163 
202 
249 
183 
176 
181 
Other resource
21 
22 
262 
287 
162 
265 
398 
Unallocated funds - resource






549 
181
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2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million
£ million
£ million
£ million
£ million
£ million
£ million
Resource AME11
Section M: Severe Disablement Allowance - 
Inside Welfare Cap
907 
888 
881 
887 
860 
735 
507 
Section N: Industrial Injuries Benefits 
Scheme - Inside Welfare Cap
845 
888 
888 
905 
901 
908 
905 
Section O: Universal Credit - Inside Welfare 
Cap





56 
39 
Section P: Employment and Support 
Allowance - Inside Welfare Cap
689 
1,282 
2,168 
4,475 
6,898 
8,726 
9,406 
Section Q: Income Support - Inside Welfare 
Cap
8,369 
7,872 
6,997 
5,254 
3,583 
2,893 
2,804 
Section R: Pension Credit - Inside Welfare 
Cap
8,133 
8,242 
8,037 
7,566 
7,042 
6,576 
6,162 
Section S: Financial Assistance Scheme - 
Inside Welfare Cap
(71) 
(1,481) 
1,171 
93 
284 
688 
500 
Section T: Attendance Allowance - Inside 
Welfare Cap
5,107 
5,228 
5,339 
5,476 
5,360 
5,422 
5,500 
Section U: Personal Independence Payment 
- Inside Welfare Cap




165 
1,571 
2,357 
Section V: Disability Living Allowance - Inside 
Welfare Cap
11,503 
11,877 
12,566 
13,430 
13,763 
13,798 
12,985 
Section W: Carer’s Allowance - Inside 
Welfare Cap
1,497 
1,572 
1,733 
1,927 
2,088 
2,319 
2,457 
Section X: Housing Benefit - Inside Welfare 
Cap
19,603 
21,015 
22,388 
23,434 
23,701 
23,742 
22,202 
Section Y: Statutory Maternity Pay - Inside 
Welfare Cap
1,713 
2,460 
2,548 
2,443 
2,258 
2,391 
2,272 
Section Z: State Pension Christmas Bonus - 
Inside Welfare Cap
47 
45 
47 
50 

33 
32 
Section AA: Jobseeker’s Allowance - Outside 
Welfare Cap
3,589 
3,668 
4,173 
4,507 
3,812 
2,696 
1,785 
Section AB: Universal Credit - Outside 
Welfare Cap






518 
Section AC: TV Licences for the over 75s - 
Outside Welfare Cap
555 
578 
587 
596 
606 
612 
618 
Section AD: Housing Benefit - Outside 
Welfare Cap






1,583 
Section AE: Other Benefits - Outside Welfare 
Cap12
4,837 
5,073 
5,083 
5,129 
259 
107 
95 
Section AF: Other Expenditure - Outside 
Welfare Cap
(29) 
(4) 
(34) 
(142) 
11 
(13) 

Section AG: Other Expenditure EALBs (net) - 
Outside Welfare Cap

(5) 

(4) 
(2) 
(1) 

Section AH: Incapacity Benefit - Inside 
Welfare Cap
6,109 
5,562 
4,939 
3,276 
1,187 
245 
19 
Section AI: Employment and Support 
Allowance - Inside Welfare Cap
582 
963 
1,414 
2,305 
3,539 
4,101 
4,547 
Section AJ: Expenditure incurred by the 
Social Fund - Inside Welfare Cap
3,186 
3,681 
2,328 
2,390 
2,106 
2,125 
2,262 
Section AK: Maternity Allowance - Inside 
Welfare Cap
345 
343 
366 
395 
400 
417 
443 
Section AL: Bereavement benefits - Inside 
Welfare Cap
649 
614 
594 
593 
582 
571 
534 
Section AM: Jobseeker’s Allowance - Outside 
Welfare Cap
1,089 
788 
735 
662 
527 
369 
313 
Section AN: State Pension - Outside Welfare 
Cap
66,969 
69,884 
74,219 
79,858 
83,137 
86,552 
89,781 
Contributory Benefits - Outside Welfare Cap







Total Resource AME
146,225 
151,033 
159,167 
165,506 
163,072 
167,639 
170,625 
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Annex
2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million
£ million
£ million
£ million
£ million
£ million
£ million
Of which:
Staff costs







Purchase of goods and services







Income from sales of goods and services


(1) 




Current grants to local government (net)
24,179 
25,807 
27,213 
28,308 
23,702 
23,740 
23,785 
Current grants to persons and non-profit 
bodies (net)
121,405 
125,430 
130,002 
136,307 
138,130 
142,413
145,559 
Depreciation2
(120) 
439 
(75) 


(3) 
50 
Take up of provisions
(28) 
(1,422) 
1,250 
204 
442 
796 
499 
Release of provision
(75) 
(78) 
(98) 
(162) 
(156) 
(184) 
(205) 
Other resource
863 
857 
877 
845 
948 
877 
937 
Total Resource Budget
155,284 
160,185 
166,791 
173,003 
170,687 
174,661 
177,147 
Of which:
Depreciation2
102 
602 
126 
251 
188 
173 
232 
Capital DEL
Section A: Operational Delivery
51 
66 
37 
18 
15 
12 

Section B: Health and Safety Executive (net)







Child Maintenance and Enforcement 
Commission (net)
20 

12 




Section D: Executive Arm’s Length Bodies 
(net)







Section E: Employment Programmes





(4) 

Section G: Other Programmes

81 
52 
68 
60 
94 

Section I: Departmental operating costs
186 
161 
171 
273 
97 
97 
181 
Section L: Expenditure incurred by the Social 
Fund
48 
45 
47 
44 
47 
44 
45 
Unallocated provision







Total Capital DEL
320 
368 
327 
419 
233 
249 
237 
Of which:
Capital support for local government (net)







Capital grants to persons & non-profit bodies 
(net)
19 
10 





Capital grants to private sector companies 
(net)





(2)

Capital grants abroad (net)







Capital support for public corporations







Purchase of assets
254 
233 
229 
308 
126 
118 
191 
Income from sales of assets
(3) 

(2) 
(3) 
(6) 
(2)

Net lending to the private sector and abroad
48 
45 
46 
45 
53 
40 
45 
Other capital
(5) 
79 
51 
68 
60 
94 

Unallocated funds - capital







183
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2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million
£ million
£ million
£ million
£ million
£ million
£ million
Capital AME
Section N: Industrial Injuries Benefits 
Scheme - Inside Welfare Cap







Section O: Universal Credit - Inside Welfare 
Cap







Section P: Employment and Support 
Allowance - Inside Welfare Cap







Section Q: Income Support - Inside Welfare 
Cap







Section R: Pension Credit - Inside Welfare 
Cap







Section AA: Jobseeker’s Allowance - Outside 
Welfare Cap







Section AJ: Expenditure incurred by the 
Social Fund - Inside Welfare Cap
123 
132 
(12) 
(17) 
(136) 
(124) 

Section AM: Jobseeker’s Allowance - Outside 
Welfare Cap







Total Capital AME
123 
132 
(12)
(17)
(134)
(124)

Of which:
Net lending to the private sector and abroad
123 
132 
(12) 
(17) 
(134) 
(124) 

Total Capital Budget
443 
500 
315 
402 
99 
125 
237 
Total departmental spending5
155,626 
160,084 
166,980 
173,154 
170,598 
174,742 
177,152 
Of which: 
Total DEL
9,158 
9,358 
7,749 
7,667 
7,665 
7,401 
6,577 
Total AME
146,467 
150,726 
159,230 
165,487 
162,933 
167,515 
170,575 
Table 1 notes
1. Net of income from sales of goods and service.
2. 
Includes 
impairments.
3. Pension schemes report under Financial Reporting Standard 17 accounting
requirements. Any amounts include cash payments made and contributions
received, as well as certain non-cash items.
4. Expenditure on tangible and intangible fixed assets net of sales.
5. Total departmental spending is the sum of the resource budget and the capital
budget less depreciation. Similarly total departmental expenditure limit (DEL) is the
sum of the resource budget DEL and capital budget DEL less depreciation in DEL.
6. This table represents DEL for resource and capital, set for each year in the
Spending Review process (amended to incorporate transfers of functions to other
government departments as they have arisen).
7. Since 2009-10 we have received additional funding to manage the increased
workflows caused by the recession. This funding is used to provide additional support
to customers affected by the downturn.
8. National Insurance Fund (NIF) administration relates to the administration costs
of processing NIF benefits, directly related to volumes of activity. These benefits
are paid from the NIF rather than the Consolidated Fund, with associated costs to
administer also paid from the NIF.
184 Department for Work and Pensions Annual Report and Accounts 2014-15
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9. As part of the Spending Review 2010 settlement we received funding which is
Annex
subject to dual key arrangements. Presently this is reported against unallocated
provision; it can only be drawn down subject to HM Treasury approval. It is intended
for major investments including Universal Credit, Personal Independence Payment,
recession-related Work Programme activities.
10. Table 1 is produced automatically from the HM Treasury System (Online
System for Central Accounting and Reporting (OSCAR)) which is used by all central
government departments to record their spending and plans. At 31 March 2015,
OSCAR reflects the position agreed at Budget 2014. This won’t match the outturn in
previous years’ financial statements and some spending may appear on different
lines.
11. AME limits are set as part of the Budget and Autumn Statement process.
12. For 2009-10 to 2012-13 other benefits (Section AE), includes spend on Council
Tax Benefits. From 2013-14 new arrangements were introduced for council tax
localisation. This was administered by the Department for Communities and Local
Government - Local Government, Scotland and Wales.
13. Since 2009-10 the financial accounts of central government departments
and entities in the wider public sector were produced under the framework of
International Financial Reporting Standards. The main impact for the department
related to the accounting treatment of Private Finance Initiative (PFI) contracts and
intangible assets. In response to this change the department centralised the funding
for some of the major contracts for accommodation and IT within departmental
operating costs. However, this did not reflect a reprioritisation of real resources but
simply the movement of certain contract costs to be scored against the corporate
centre.
14. Totals may not sum due to rounding.
185
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Table 2: Public spending control
2014-15 
2014-15 
2014-15 
2014-15 
Original Plans
Adjusted Plans
Final Plans
Outturn
£ million
£ million
£ million
£ million
Resource DEL
7,727 
7,727 
7,217 
7,152 
Operational Delivery
2,098 
2,098 
1,616 
1,859 
Child Maintenance Group
447 
447 
331 
332 
Health and Safety Executive (net)
142 
142 
139 
139 
European Social Fund




Executive Non-Departmental Public Bodies 
(net)
344 
344 
355 
348 
Employment Programmes
906 
906 
953 
950 
Support for Local Authorities
656 
656 
523 
536 
Other Programmes
109 
109 
225 
256 
Departmental operating costs
972 
972 
2,495 
2,150 
Unallocated provision
1,413 
1,413 


National Insurance Fund
600 
600 
547 
547 
Expenditure incurred by the Social Fund
40 
40 
34 
33 
Resource AME
167,592 
167,592 
169,129 
167,639 
Severe Disablement Allowance
537 
537 
751 
735 
Industrial Injuries Disablement Benefit
909 
909 
912 
908 
Universal Credit


130 
56 
Jobseeker’s Allowance
3,175 
3,175 
2,693 
2,696 
Employment and Support Allowance
8,306 
8,306 
8,635 
8,726 
Income Support
2,823 
2,823 
2,996 
2,893 
Pension Credit 
6,704 
6,704 
6,657 
6,576 
Financial Assistance Scheme
442 
442 
675 
688 
TV Licences for the over 75s
631 
631 
637 
612 
Attendance Allowance
5,522 
5,522 
5,448 
5,422 
Personal Independence Payment
1,426 
1,426 
1,650 
1,571 
Disability Living Allowance
13,389 
13,389 
13,778 
13,798 
Carers Allowance
2,267 
2,267 
2,292 
2,319 
Housing Benefit
18,258 
18,258 
18,319 
17,898 
Rent Rebates
5,863 
5,863 
5,904 
5,844 
Statutory Sick Pay and Statutory Maternity Pay
2,400 
2,400 
2,393 
2,391 
Other Benefits
142 
142 
140 
140 
Other Expenditure
(6) 
(6) 
(14) 
(13) 
Other Expenditure EALBs (net)



(1) 
Incapacity Benefit
154 
154 
247 
245 
Jobseeker's Allowance
487 
487 
383 
369 
Employment and Support Allowance
4,350 
4,350 
4,134 
4,101 
Maternity Allowance
400 
400 
416 
417 
State Pension
86,560 
86,560 
86,721 
86,552 
Bereavement benefits
574 
574 
563 
571 
Expenditure incurred by the Social Fund
2,274 
2,274 
2,669 
2,125 
Total
175,319 
175,319 
176,346 
174,791 
Of which:
Voted expenditure
79,879 
79,879 
80,633 
79,831 
Non-voted expenditure
95,440 
95,440 
95,713 
94,960 
Capital DEL
286 
286 
281 
249 
186 Department for Work and Pensions Annual Report and Accounts 2014-15
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Annex
2014-15 
2014-15 
2014-15 
2014-15 
Original Plans
Adjusted Plans
Final Plans
Outturn
£ million
£ million
£ million
£ million
Operational Delivery




Child Maintenance Group


10 
10 
Health and Safety Executive (net)




Executive Non-Departmental Public Bodies 
(net)




Employment Programmes


(3) 
(4) 
Other Programmes
85 
85 
82 
94 
Departmental operating costs
30 
30 
137 
97 
Unallocated provision
110 
110 


Expenditure incurred by the Social Fund
44 
44 
46 
44 
Capital AME


(100) 
(124) 
Universal Credit




Jobseeker’s Allowance




Employment and Support Allowance




Income Support




Expenditure incurred by the Social Fund


(100) 
(124) 
Total Spending in AME
-
-
(100)
(124)
Total
286 
286 
181 
125 
 Of which:
Voted expenditure
242 
242 
235 
205 
Non-voted expenditure
44 
44 
(55) 
(80) 
Table 2 notes 
1. Explanations of notable variances are included in the financial overview (page 49).
2. Table 2 is produced automatically from the HM Treasury System (Online System for
Central Accounting and Reporting (OSCAR)), which is used by all central government
departments to record their spending and plans. At 31 March 2015, OSCAR reflects
the position agreed at Budget 2014. This won’t match the outturn in previous years’
financial statements. Some spending may also appear on different lines.
3. Totals may not sum due to rounding.
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Table 3: Capital employed 
2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million4
£ million4
£ million4
£ million4
£ million4
£ million4
£ million4
Assets and Liabilities on the Statement of Financial Position at end of year: 
Assets
Non-current assets

3,612
3,760
3,937
2,972
2,926
2,969
2,769
Intangible1
448
506
538
666
606
559
524
Tangible 
1,955
2,044
1,977
727
608
525
360
Of which:
Land and buildings2
1,821
1,939
1,896
653
548
438
296
Leasehold improvements
-
-
-
2
5
4
2
Plant and machinery
2
20
16
11
7
5
5
Furniture and fittings
10
-
-
-
-
-
-
Transport and equipment
-
-
-
-
-
-
-
Information technology2
122
85
62
56
46
74
53
Payments on account and assets under 
construction
-
-
3
4
2
3
3
Financial assets 
49
126
177
253
312
401
401
Trade and other receivables
1,160
1,084
1,244
1,326
1,400
1,484
1,484
Current assets
2,680
2,813
2,602
2,983
2,392
3,966
3,966
Liabilities
Payables (<1 year)
(4,905)
(5,276)
(4,598)
(4,293)
(4,198)
(5,458)
(5,456)
Payables (>1 year)
(1,113)
(985)
(851)
(709)
(593)
(485)
(602)
Provisions3
(4,312)
(2,774)
(3,919)
(3,959)
(4,248)
(4,856)
(5,131)
Pension liabilities
-
-
-
-
-
-
-
Capital employed within core department
(4,038)
(2,462)
(2,829)
(3,006)
(3,721)
(3,863)
(4,454)
Arm’s length bodies net assets
(65)
(48)
(39)
(11)
(6)
(15)
(15)
Total capital employed in departmental 
group
(4,104)
(2,510)
(2,868)
(3,018)
(3,727)
(3,879)
(4,469)
Table 3 notes
1. International Financial Reporting Standards (IFRS) requires software licences and
internally developed software to be accounted for as intangible rather than tangible
assets.  In addition, software development that had been expensed under previous
accounting standards had to be retrospectively capitalised to comply with IFRS.
2. In 2009-10, we adopted IFRS. This resulted in a number of previously off
Statement of Financial Position contracts for IT and accommodation moving onto
our Statement of Financial Position as assets owned under finance leases.  This is
a classification change and the opening position at 1 April 2009 has been restated.
This makes the figures consistent with the Consolidated Statement of Financial
Position in this publication.
3. Provisions are primarily in respect of Financial Assistance Scheme and reflect the
latest forecasts of the likely assistance payments.
4. Totals may not sum due to rounding.
188 Department for Work and Pensions Annual Report and Accounts 2014-15
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Annex
Table 4: Administration budget
2009-10 
2010-11 
2011-12 
2012-13 
2013-14 
2014-15 
2015-16 
Outturn
Outturn
Outturn
Outturn
Outturn
Outturn
Plans
£ million
£ million
£ million
£ million
£ million
£ million
£ million
Resource DEL
Section A: Operational Delivery
1,396 
1,269 
176 
249 
244 
192 
146 
Section B: Health and Safety Executive (net)
153 
132 
111 
105 
107 
83 
79 
Child Maintenance and Enforcement 
Commission (net)
448 
391 
121 
44 



Section D: Executive arm’s length bodies 
(net)


15 
16 
18 
19 
15 
Section I: Departmental operating costs
3,010 
2,726 
910 
765 
722 
600 
760 
Section K: National Insurance Fund
1,056 
1,093 





Total administration budget
6,063 
5,610 
1,333 
1,180 
1,091 
894 
1,001 
Of which:
Staff costs
3,506 
3,436 
652 
524 
479 
452 
484 
Purchase of goods and services
1,434 
1,123 
440 
299 
423 
375 
353 
Income from sales of goods and services
(230) 
(246) 
(100) 
(27)
(92) 
(65) 
(61) 
Current grants to persons and non-profit 
bodies (net)







Current grants to local government (net)







Net public service pensions







Rentals
1,124 
1,126 
121 
138 
62 
55 
99 
Depreciation
220 
162 
212 
232 
199 
56 
102 
Other resource



14 
19 
20 
15 
Table 4 notes
1. As part of the Spending Review 2010 we agreed with HM Treasury that we would
re-classify the costs of delivering front line services from DEL administration to DEL
programme with effect from 1 April 2011. This has caused significant change.
2. National Insurance Fund (NIF) administration relates to the administration costs
of processing NIF benefits, directly related to volumes of activity (see Note 8 Table
1).  From 2011-12, activities funded from the NIF are now re-classified to DEL
Programme.
3. Totals may not sum due to rounding.
For Table 5: Staff Numbers see ‘Our controls’ page 62
189
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Table 6: Total identifiable expenditure on services 
by country and region, 2009-10 to 2013-14
2009-10
2010-11
2011-12
2012-13
2013-14
Outturn
Outturn
Outturn
Outturn
Outturn
£ millions
National Statistics
North East
6,287
6,469
6,558
6,860
6,880
North West
16,360
16,787
17,026
17,695
17,771
Yorkshire and the 
Humber
11,269
11,633
11,794
12,338
12,440
East Midlands
9,413
9,748
10,007
10,492
10,615
West Midlands
12,321
12,672
12,853
13,347
13,476
East
11,440
11,889
12,225
12,864
13,109
London
13,288
13,739
13,856
14,283
14,294
South East
15,953
16,651
17,102
18,000
18,363
South West
11,169
11,583
11,905
12,516
12,735
Total England
107,499
111,170
113,325
118,396
119,682
Scotland
12,060
12,433
12,577
13,066
13,144
Wales
7,610
7,796
7,901
8,206
8,240
Northern Ireland
9
13
1
1
-
UK identifiable 
expenditure
127,178
131,412
133,804
139,668
141,067
Outside UK
2,943
3,108
3,277
3,490
3,655
Total identifiable 
expenditure
130,121
134,520
137,081
143,159
144,722
Non-identifiable 
expenditure
-
1
17
10
-
Total expenditure on 
services
130,121
134,521
137,098
143,169
144,722
190 Department for Work and Pensions Annual Report and Accounts 2014-15
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Annex
Table 7: Identifiable expenditure on services by 
country and region, per head 2009-10 to 2013-14
2009-10
2010-11
2011-12
2012-13
2013-14
Outturn
Outturn
Outturn
Outturn
Outturn
£ per head
National Statistics
North East
2,441
2,501
2,526
2,636
2,636
North West
2,342
2,391
2,413
2,498
2,502
Yorkshire and the 
Humber
2,157
2,214
2,230
2,321
2,331
East Midlands
2,105
2,163
2,205
2,297
2,308
West Midlands
2,229
2,277
2,292
2,365
2,375
East
1,989
2,047
2,085
2,178
2,202
London
1,673
1,704
1,689
1,719
1,698
South East
1,879
1,941
1,976
2,063
2,088
South West
2,137
2,202
2,246
2,344
2,368
England
2,060
2,112
2,134
2,213
2,222
Scotland
2,305
2,363
2,373
2,459
2,467
Wales
2,504
2,556
2,579
2,669
2,673
Northern Ireland
5
7
-
-
-
UK identifiable 
expenditure
2,043
2,094
2,114
2,192
2,201
191
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Table 8: Expenditure on services 
by sub-function 2013-14
National Statistics
ast
est
e and the Humber
ast
th E
th W
est
Nor
Nor
Yorkshir
East Midlands
W Midlands
East
London
South E
£ millions
1 . General public services
1.1 Executive and legislative organs, financial and fiscal affairs, 
external affairs
-
1
1
1
1
1
1
1
Total general public services
-
1
1
1
1
1
1
1
4 . Economic affairs
4.1 General economic, commercial and labour affairs
212
442
384
237
383
250
504
295
4.8 R&D economic affairs
1
2
1
1
1
2
3
3
4.9 Economic affairs n.e.c.
-
-
-
-
-
-
-
-
Total economic affairs
213
444
386
238
384
253
507
299
10 . Social protection
10.1 Sickness and disability
1,895
5,069
3,072
2,540
3,277
2,712
3,831
3,751
of which: incapacity, disability and injury benefits
1,895
5,069
3,072
2,540
3,277
2,712
3,831
3,751
10.2 Old age
3,992 10,450
7,628
6,887
8,376
9,081
7,932 12,963
of which: pensions
3,992 10,450
7,628
6,887
8,376
9,081
7,932 12,963
10.3 Survivors
29
74
51
44
56
54
58
82
10.4 Family and children
229
588
377
292
434
350
771
460
of which: family benefits, income support and tax credits
229
588
377
292
434
350
771
460
10.5 Unemployment
276
574
499
307
497
324
654
383
of which: other unemployment benefits
276
574
499
307
497
324
654
383
10.6 Housing
-
-
-
-
-
-
-
-
10.7 Social exclusion n.e.c.
116
283
191
149
213
160
240
206
of which: family benefits, income support and tax credits
116
283
191
149
213
160
240
206
10.8 R&D social protection
-
-
-
-
-
-
-
-
10.9 Social protection n.e.c.
130
288
235
157
237
174
299
218
Total social protection
6,667 17,325 12,053 10,376 13,090 12,855 13,785 18,063
TOTAL DEPARTMENT FOR WORK AND PENSIONS 
EXPENDITURE ON SERVICES
6,880 17,771 12,440 10,615 13,476 13,109 14,294 18,363
192 Department for Work and Pensions Annual Report and Accounts 2014-15
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Annex
National Statistics (continued)
eland
est
tifiable
al
ot

thern Ir
den
ales
and T
South W
England
Scotland
W
Nor
Outside UK
Not I
Gr
£ millions
1 . General public services
1.1 Executive and legislative organs, financial and fiscal affairs, 
external affairs
1
9
1
1
-
-
-
10
Total general public services
1
9
1
1
-
-
-
10
4 . Economic affairs
4.1 General economic, commercial and labour affairs
189
2,897
321
185
-
1
-
3,404
4.8 R&D economic affairs
1
16
2
1
-
2
-
21
4.9 Economic affairs n.e.c.
-
2
-
-
-
-
-
2
Total economic affairs
191
2,916
323
186
-
2
-
3,428
10 . Social protection
10.1 Sickness and disability
2,744 28,890
3,687
2,405
-
74
- 35,057
of which: incapacity, disability and injury benefits
2,744 28,890
3,687
2,405
-
74
- 35,057
10.2 Old age
8,893 76,203
7,889
4,863
-
3,518
- 92,473
of which: pensions
8,893 76,203
7,889
4,863
-
3,518
- 92,473
10.3 Survivors
49
497
61
33
-
20
-
612
10.4 Family and children
322
3,823
382
263
-
1
-
4,469
of which: family benefits, income support and tax credits
322
3,823
382
263
-
1
-
4,469
10.5 Unemployment
245
3,760
416
241
-
1
-
4,417
of which: other unemployment benefits
245
3,760
416
241
-
1
-
4,417
10.6 Housing
-
-
-
-
-
-
-
-
10.7 Social exclusion n.e.c.
142
1,700
175
125
-
1
-
2,001
of which: family benefits, income support and tax credits
142
1,700
175
125
-
1
-
2,001
10.8 R&D social protection
-
-
-
-
-
-
-
-
10.9 Social protection n.e.c.
146
1,883
210
124
-
38
-
2,255
Total social protection
12,543 116,757 12,820
8,054
-
3,653
- 141,284
TOTAL DEPARTMENT FOR WORK AND PENSIONS 
EXPENDITURE ON SERVICES
12,735 119,682 13,144
8,240
-
3,655
- 144,722
193
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Core Tables 6, 7 and 8: regional tables - notes
1. Tables 6, 7 and 8 show analyses of the department’s spending by country, region
and by function. The data in these tables is consistent with the country and regional
analyses published by HM Treasury in the November 2014 release. The figures were
largely taken from OSCAR in summer 2014 and the regional distributions were
completed by the following autumn (taking on board any revisions to departmental
totals).  Therefore the tables may not show the latest position and may not be
consistent with other tables in the departmental report or published elsewhere.
Totals may not sum due to rounding.
2. The analyses are set within the overall framework of total expenditure on services
(TES). TES broadly represents the current and capital expenditure of the public
sector, with some differences from the national accounts to measure total managed
expenditure. The tables show the central government and public corporation
elements of TES. They include current and capital spending by the department and
its ALBs plus public corporations’ capital expenditure, but do not include capital
finance to public corporations. Nor do they include payments to local authorities or
local authorities’ own expenditure.
3. TES is a cash equivalent measure of public spending. The tables don’t include
depreciation, cost of capital charges, or movements in provisions that are in
departmental budgets. They do include pay, procurement, capital expenditure,
and grants and subsidies to individuals and private sector enterprises. Further
information on TES can be found in Appendix E of ‘Public Expenditure Statistical
Analysis 2014’.
4. The data features both identifiable and non-identifiable spending:

 identifiable expenditure on services – which is capable of being analysed as
being for the benefit of individual countries and regions

 non-identifiable expenditure - is incurred for the benefit of the UK as a whole
and cannot be disseminated by individual country or region
5. Across government, most expenditure isn’t planned or allocated regionally. Social
security payments, for example, are paid to eligible individuals irrespective of where
they live. Expenditure on other programmes is allocated by looking at how all the
projects across the department’s area of responsibility, usually England, compare. So
the analyses show the regional outcome of spending decisions that haven’t normally
been made on a regional basis.
6. The functional analyses of spending in table 8 are based on the United Nations
Classification of the Functions of Government, the international standard. The
presentations of spending by function are consistent with those used in Chapter A of
the CRA November 2014 release. These are not the same as the strategic priorities
shown elsewhere in the report.
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