27 July 2007
Britain's 'stunningly complex' benefits system has fuelled the rising payment error rates that this week led auditors to qualify the Department for Work and Pensions' accounts for the eighteenth successive year, MPs have warned.
By a quirk of the pre-recess parliamentary timetable, a series of MPs' reports, auditors' reviews and departmental commitments this week combined to expose the complexity of the benefits and tax credits that underpin Britain's welfare system.
The Commons work and pensions select committee published a report on July 26 calling for an immediate review of the benefits system. MPs concluded that the Department for Work and Pensions' continued use of 40 separate benefits makes error by the public sector staff calculating payments 'inevitable'.
The MPs found that the myriad benefits, and the confusing claim forms and entitlements that underpin them, create 'disincentives to work' and lead to inaccuracies in the amount of benefits claimants receive. It also contributes to billions of pounds in benefit cash going unclaimed each year.
The MPs conclusions will come as a blow to the DWP, which is currently considering ways to get 1 million people off benefits and into work.
The committee called for a benefits commission, similar to the recent Pensions Commission, to be established to review the system 'with a view to a massive simplification'.
The MPs' report follows a study by the Institute for Public Policy Research think-tank, which called for a single working age benefit, or Swab, to replace most existing payments.
While the DWP is considering simplification plans, Work and Pensions Secretary Peter Hain last week published a green paper on welfare reform that effectively ditched the government's long-term commitment to a single payment.
But he told the committee this week that he would give its report 'careful consideration'.
The National Audit Office this week exposed the extent of the problem Hain faces. It qualified the DWP's accounts for the eighteenth year running, citing unacceptably high levels of fraud and error across the benefits system, estimated at £2.5bn.
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