DWP cancels £694 million Teleperformance fraud contract and moves 2,700 staff into civil service

Insider sources say the DWP has pulled the plug on its Universal Credit fraud-busting contract with call-centre giant Teleperformance, ending a four-year agreement originally awarded in June 2024. The deal, worth an estimated £368 million rising to £632 million with options, was terminated after repeatedly missing its annual expenditure and savings targets, despite multiple working groups trying to improve performance.

Under a “convenience” clause, the department will transfer the 2,700 agents who worked from home onto the civil service payroll, requiring them to work primarily from office locations. This move adds thousands of staff to the civil service and runs counter to Labour’s pledge to reduce civil service numbers. Meanwhile, a government source noted that AI applications such as ChatGPT are prompting a notable rise in claims for non-assessed benefits, exemplified by an increase in blind or partially-sighted Romanian claimants in Nuneaton. Pat McFadden is being briefed on potential savings, but political opposition may block further action.