The department is working to create a system that could process economic and societal data sets and use the information to create projections for the impact on services and operations

The Department for Work and Pensions is developing a “simulation modelling tool” that is intended to use data to help the organisation better anticipate the impact of long-term trends and plan accordingly.

The DWP – working with policy consultancy London Economics – is currently developing the tool as a proof-of-concept exercise. According to the text of the contract between the two parties, the model is being designed to process inputs of publicly available data sets – potentially including official stats on GDP per capita, inflation, employment rates, health, immigration, and population and demography.

The tool will then produce outputs of projections for how societal or economic trends might affect the department’s workforce, budgeting, and caseload, as well as the number of disputes and the rate of fraud and error.

In creating the simulation model, the DWP’s ultimate aim is to help understand the “possible future world and how we can prepare for it”.

“The department is facing some big challenges in the future that is going to impact how we deliver services: for example, an ageing population can lead to higher labour market inactivity with a higher caseload, but then technological advancements, at the same time, will change the skills required for work, how people find work, and therefore how we support people back into work,” the contract says. “We plan to create a proof-of-concept model that can be used to help plan out future conditions for the department.”

Related content

• EXCL: DWP explores data science to inform Jobcentre ‘interventions’ for benefit claimants
• DWP runs ‘generative AI Lighthouse programme – to test and learn in a safe environment’
• EXCL: DWP documents disclose ‘potential National Work Service’

The document adds: “This could enable strategy colleagues in the department to understand how different scenarios may impact DWP, including how demographic changes will affect the labour market and economy in the future and how this will impact the department’s ability to effectively deliver its services in the future. The output would be a model where you can change inputs to see how this would impact demand in DWP – helping us to help resilience planning and crisis responses for the future.”

The department’s £50,000 engagement with London Economics came into effect on 8 April, and runs until 31 July.

During that time, the policy consultancy will work with the DWP’s Business Strategy Analysis unit, which is “a multidisciplinary analytical team focused on producing evidence to inform us how services are currently being delivery and the future direction” of the department, according to the contract.

“This is used to help plan the departmental strategy for the future – to tell us how we should be providing services to maximise efficiency whilst also maximising customer satisfaction,” it adds.

The unit has reportedly already created a department-wide strategy for the rest of this decade, that drew on mid- to long-term assessment of “demographic, technological and economic trends”. But the team continues work on “developing out foresight and futures analysis… to inform our long-term strategy… [and] would like to develop tools to link the potential impact of future changes [and] scenarios back to what it could mean for the business”.

The early weeks of the project will focus on engaging with professional analysts and other departmental representatives. Work will then proceed to developing the simulation model and testing its efficacy, before undertaking workshops to present the tool to various groups of stakeholders and explain how it might be used.