04 July 2003
Local authorities may have to be stripped of their role in distributing housing benefit unless they can do better at tackling fraud.
That idea was flagged up in a report by the Commons' Public Accounts Committee, Tackling benefit fraud, issued on July 4.
MPs on the committee were alarmed that the Department for Work and Pensions has had no accurate estimate of housing benefit fraud rates since 1998 because of the failure two years ago of a pilot scheme. The 1998 figure was £500m.
'The department was unable to assure us that the number of people committing fraud, its overall value, or the levels of landlord fraud, were reducing,' the report said.
Committee chair Edward Leigh conceded that the department had launched further initiatives, but warned that these had to 'reduce the level of fraud or else [it] should consider changing the arrangements for delivering some benefit payments so that they only reach those who are fully entitled to them'.
From a total annual benefits bill of £100bn, the report found that the department was losing £2bn a year to fraud, just over one-third of this through income support and jobseeker's allowance.
Fraud rates had fallen sharply over five years but this reduction levelled off in 2001/02.
Leigh said: 'The taxpayer is being ripped off by benefit fraudsters to the tune of £2bn a year. The Department for Work and Pensions has lost momentum in reducing this unacceptable level of fraud.'
The committee said that the complexity of benefits was a major constraint. Benefit data is held on 20 separate information technology systems with no common access points, but IT improvements are due to deliver roughly one-third of the further fraud reduction expected by 2006, the MPs were told.
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