13 September 2002
The Commons' Public Accounts Committee report into fraud and error in income support, published on September 11, found that an estimated £2bn of the £100bn social security budget is being lost to fraud every year, with a further £1bn being paid out by error.
The influential committee said that it will be impossible to measure progress in the system until the department has a clear indication of just how much cash is being lost.
The MPs said the DWP was making progress in controlling fraud and error in income support and Jobseeker's Allowance but that even if it hit its target of a 50% reduction by 2006 that would leave around £700m still being erroneously spent.
Work is under way to produce robust figures for housing benefit but the committee described the estimates on other benefits as 'out of date' and called for a programme of reviews.
The report said: 'This will allow targets to be set for reducing fraud and error in all benefits and their performance to be measured.'
Edward Leigh, the chair of the committee, said: 'For some benefits, such as child benefit and Disability Living Allowance, the DWP has little real idea of how much fraud and error takes place. Until this changes, it will be impossible to tell whether it is making across-the-board progress in this vital area.
'Meanwhile, taxpayers' hard-earned cash continues to seep out of the system and into the pockets of fraudsters at an astonishing rate.'
The PAC described investment in new technology as 'crucial' in reducing mistakes and stemming fraud. It also expressed disappointment that significant improvements to the DWP's IT systems will not be made until 2006.
'The scale of the department's legacy systems and track record of IT failure, and the recent deferment of the new IT system for the Child Support Agency, do not augur well,' the report said.
The report also suggested the simplification of benefit forms and systems.
PFsep2002
