10 Jul 2017

Even the official benefit fraud numbers are getting worse

Taxpayers have been robbed of a staggering £2.4 billion in the past year in welfare benefits through fraud and in payments made in error by officials.

The figure is more than enough to give all public sector workers an extra 1% pay rise at a time when there is pressure to end the austerity cap on their wages.

Total overpayments by the Department for Work and Pensions in 2016-17 were £3.5 billion, according to figures released last week. Officials clawed back £1.1 billion but that still left £2.4 billion lost to fraud and incompetence. Senior politicians blamed a ‘farcical’ computer system for the scandal and called on Ministers to ‘get a grip’ of the scandal.

Fraud alone totalled £2 billion before money was recovered – up by £400 million on the previous year.

The 25% rise comes despite a dedicated anti-fraud unit being set up last year on the instructions of former Work and Pensions Secretary Iain Duncan Smith. The remaining £1.5 billion was wrongly paid out because of clerical errors.

Labour MP Frank Field, the Work and Pensions Committee chairman, said: ‘They have no idea how much money they are losing. I believe the real figure could be even higher.’ He claimed that the loss of thousands of jobs at the DWP meant that it ‘simply does not have the staff any more to check up on claimants to see if they are genuine. The farcical computerisation of the benefits system has been a gift to fraudsters and gangs who know how to play the system.’

Dame Margaret Hodge, a former chairman of Commons spending watchdog, the Public Accounts Committee, said: ‘It is an absolute scandal that at a time when they are cutting benefits and services, the Government is throwing billions of pounds away. Ministers need to get a grip.’

In one extraordinary case, one benefits claimant who was given an extra £546,000 due to a computer error was granted 959 years to pay it back.

The DWP report said untimely and inaccurate reporting of income and earnings was the largest cause of fraud and error, which amounted to 2% of all benefits payments last year.

Whitehall sources said £1.5 billion in housing benefit wrongly paid out by councils accounted for 40% of overpayments. Ministers hope a new digital system, Universal Credit, will cut fraud by linking benefit claims to PAYE data.

The DWP said: ‘We are committed to tackling fraud and error in the benefits system.’


Of course the real benefit fraud losses are far higher.

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