A £1 billion bill is expected for fixing botched disability benefits, MPs have warned.
Vulnerable claimants lost out on £340 million support due to systemic errors when disability payments were combined into the single Employment Support Allowance (ESA) payment from 2011.
The Department for Work and Pensions (DWP) claimed to have corrected the underlying problem, but in February was forced to admit that 30,000 extra cases had been identified – despite new guidance being issued.
The DWP has now tripled the number of staff trying to fix the system, from 400 to 1,200, and DWP select Committee chairman Frank Field said the cost is now expected to be close to £1 billion.
Mr Field said: “DWP has been forced to admit that just the admin of fixing its own catastrophic incompetence is going to add another £40 million to the cost of this serially botched operation.
“Imagine what that money could have done instead for families across the country who are struggling to feed their children and heat their homes.”
Labour MP Mr Field criticised the “awful, painful, error-ridden” assessment process and “miserable and lengthy” appeal process, which has meant tens of thousands of disabled people have not been given money they were owed.
The Birkenhead MP said DWP was now headed for another billion pound scandal as staff continued to wrongly refuse disabled people the support they need.
“You might think that this shameful, damaging waste would at least focus minds at DWP on making sure this never, ever happened again,” he said.
“But we are already starting to hear about people whose incomes have been slashed because they’ve been wrongly advised to claim Universal Credit, and there’s no way back.
“If Ministers want to avoid another billion pound scandal, they need to get a grip on this – and fast.”
A new letter from a top civil servant at the DWP confirms the latest expected cost for administering payments to 310,000 underpaid claimants would be £21 million in 2018/19 and £19 million in 2019/20.
The letter also confirms 400 extra staff were recruited in 2018/19 “directly to support the ESA underpayment exercise”.
The DWP estimates it will pay £920 million in past underpayments over the financial years 2017/18, to 2019/20, a decrease from the £970 million forecast that informed Autumn Budget 2018.
A DWP spokeswoman said: “It is only right that we prioritise ensuring all claimants affected by past ESA underpayments get the money they are owed, and we have paid over £300 million so far.
“We have allocated the staffing and resources needed to complete this as soon as possible, without impacting any of our other customer activity and support.”