DWP 2014/15 accounts qualified

16 Jul 15

The Department for Work and Pensions 2014/15 accounts have been qualified once again because of “unacceptably” high levels of fraud and error in benefit expenditure, the National Audit Office said.

DWP accounts (and those of its predecessor departments) have been qualified every year since 1988/89. However, comptroller and auditor general Amyas Morse did not today qualify his audit opinion on the trust and fairness of the state of the department’s affairs and of its net operating cost for the year ended on 31 March 2015.

Overpayments due to fraud and error in 2014/15 are estimated at £3.2bn, or 1.9% of total benefit expenditure. This is only slightly lower than the error level recorded the previous year, and not statistically significant.

Total underpayments are estimated at £1.4bn or 0.9% of total benefit expenditure.

The NAO also said that, while fraud and error in benefits directly administered by DWP had reduced, there had been an increase in Housing Benefit, which is administered by local authorities. Housing Benefit fraud and error increased from 5.3% in 2012/13 to 6.1% in 2014/15.

According to the auditors, the department is unlikely to meets its own fraud and error reductions targets, while a slower roll out of Universal Credit means the £200m annual fraud and error savings expected in April this year have not yet materialised.

“However, the department expects that, once fully rolled out, the implementation of Universal Credit will reduce annual fraud and error overpayments by around £0.5bn per annum,” the NAO said.

“Before that happens, the department should not neglect the existing levels of fraud and error on those legacy benefits which will continue to be in operation until fully replaced by Universal Credit.”

A DWP spokesman said: “Fraud and error has fallen below 2% for the first time in a decade and we recover around £900m annually in incorrectly paid benefits.

“Universal Credit is already simplifying the complex benefit system and is predicted to prevent a further £500m in fraud.

“Using ‘real time’ data, we are now able to immediately detect undeclared earnings or income and correct or adjust a person’s benefits.”

  • Vivienne Russell

    Vivienne Russell is managing editor of Public Finance magazine and publicfinance.co.uk

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