Case study

Department for Work and Pensions

Modelling the impact of payment modernisation

Some 25 million British adults receive one or more of the state benefits and pensions administered by the Department for Work and Pensions (DWP). In the past, the majority (approximately 60%) of claimants have chosen to have their benefit paid through paper-based methods such as an order book, which could be cashed at Post Offices. Although tried and tested, paper-based payments were costly to administer, subject to fraud, and did nothing to promote financial inclusion. Therefore replacing order books with electronic methods was high on DWP’s modernisation agenda. To make this happen DWP set up the Payment Modernisation Programme (PMP) and engaged PA Consulting Group to support it – which included helping to deliver a range of tools capable of forecasting the rate and volume of the conversion to Direct Payment.

PMP’s management recognised the complexity of the challenge and asked PA to deploy an expert business modelling team to undertake a joint development alongside the DWP’s own specialists from its Information and Analysis Directorate. The user community was made up of staff from the programme, also supported by PA.