19 December 2003
The Department for Work and Pensions is making little headway in its struggle to tackle benefit fraud, the auditor general has said in qualifying its accounts for the 14th year in a row.
According to DWP estimates given to the National Audit Office, £3bn was lost in benefit payments in 2002/03 – equivalent to 2.7% of gross benefits expenditure – the same level reported in 2001/02.
NAO head Sir John Bourn said the DWP would have to reduce its level of estimated fraud and error to less than 1% of gross expenditure if it is to avoid accounts qualification in future.
'Once again I must point out that Parliament intends that this money should go only to those who are properly entitled,' Bourn said. 'The challenge which the department faces in reducing the scale of fraud and error to an acceptable level is very large indeed.'
Edward Leigh, chair of the Commons Public Accounts Committee, said it was 'outrageous' that the DWP was unable to rectify what had become a 'shameful situation'.
He added: 'No one would argue against providing the support the needy are entitled to in a wealthy and civilised society. But the department's failure to reduce fraud and error to an acceptable level only hurts legitimate benefits claimants and honest taxpayers.'
Income support and jobseeker's allowance are most susceptible to fraud. According to DWP estimates for the year ending September 30, 2002, almost 6% of total income support expenditure and more than 11% of jobseeker's allowance expenditure was lost.
There is also concern about the level of fraud and error in housing benefit, with an estimated £750m, or 6.2%, being overpaid, although this represents a reduction on a 1998 estimate of £840m.
PFdec2003
