PAC slams benefits losses from fraud and inefficiency

13 Jan 00
The benefits system is still losing billions of pounds of public money due to fraud and inefficiency in spite of attempts to improve the service, the Commons Public Accounts Committee has found.

14 January 2000

In a report published on January 13, the committee castigates the Benefits Agency for its failure to simplify regulations which, by its own admission, mean that 10% of payments will always be wrong.

'This is poor administration, which creates confusion and uncertainty for those most in need, extra costs and high levels of debt, much of which is not collectable,' the MPs say.

While agreeing that the agency achieved slight improvements during 1997/98, the committee estimates that more than £1.7bn a year is lost from fraud alone on income support, jobseeker's allowance and child benefit, which it describes as 'totally unacceptable'.

David Davis, the committee chairman, said: 'The waste of public money from errors and fraud is enormous. Errors in income support alone have cost £5bn over the past seven years. The regulations must be simplified urgently to prevent confusion and uncertainty for those in need and to reduce fraud and error.'

Social Security Secretary Alastair Darling said: 'No one could be anything but angry about the scale of fraud. That is why I have introduced counter-fraud initiatives which are beginning to bear fruit.'

l In a separate Public Accounts Committee report published this week, the MPs say incompetent and secretive management left Wales' biggest further education college, Coleg Gwent (formerly known as Gwent Tertiary College), on the brink of collapse.

Financial problems led to debts of £6.8m as the college failed to manage staff costs and European funded-projects between 1995 and 1997. A police investigation is continuing.


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