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Ongoing issues with fraud and error saw HM Revenue and Customs and the Department for Work and Pensions named among eight “departments of concern” flagged by MPs on the Public Accounts Committee.

In her annual report on the work of the public spending watchdog, committee chair Dame Meg Hillier said that HMRC was included on her watch list because of the scale of fraud and error as a result of Covid interventions and the growth of tax debt leads.

“Although it was alert to the risks of fraud and error because of the speed of introducing Covid schemes it is not showing enough urgency in tackling these,” she said. “It has secured more staff to tackle fraud and error within the Covid-19 support schemes through the Taxpayer Protection Taskforce. However, HMRC has told the PAC that some of its more complex cases would not be dealt with until after the 2022–23 financial year. HMRC has a strong return on recouping money for every pound it spends so it is puzzling why it is not moving faster.”

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DWP, meanwhile, was picked because of the sheer scale of its Covid work and “a long legacy of fraud and error”, according to the PAC chair.

She praised the department for acting quickly to adapt its controls against fraud and error to process the surge in Universal Credit claims that accompanied the onset of the pandemic. But she said the department had “still not adequately determined how it will learn from this experience to reduce fraud back to pre-existing levels” – which were already at the highest rate since records began before the pandemic.

The Department of Health and Social Care topped the list of ministries with the biggest challenges, with Hillier saying the organisation is “facing immense challenges” as a result of the coronavirus pandemic.

The list also includes the Department for Levelling Up, Housing and Communities; the Ministry of Defence; the Department for Education; the Ministry of Justice; and the Department for Business, Energy and Industrial Strategy.