Showing posts with label national benefit fraud total. Show all posts
Showing posts with label national benefit fraud total. Show all posts

19 Sep 2019

Wolverhampton stops £700k of fraud in 4 months

Nine cases of tenancy fraud, worth around £695,000, were stopped by Wolverhampton Council’s counter-fraud team in four months.

Illegal sub-lettings of properties were uncovered along with fraudulent right to buy applications and social housing application fraud.

And fraud where the owner tries to pass on the property to a relative, or fails to hand over the keys, was also detected.

The team tackled the fraud between April and July this year, a report revealed.

A total of 150 instances of suspected fraud were investigated by the team – with council bosses promising to take action to recover all stolen money as part of a "zero-tolerance" policy.

It comes after the council was chosen to pilot a HMRC scheme to crack down on the crime.

The report to the council’s Audit and Risk Committee said: “The counter-fraud team is continuing to develop and lead in raising fraud awareness across the council and in promoting an anti-fraud culture. The team carries out investigations into areas of suspected or reported fraudulent activity.

“It also organises a series of council wide pro-active fraud activities, including the targeted testing of areas open to the potential of fraudulent activity.

"The council was selected by the Cabinet Office as one of only 10 local authorities to take part in a pilot National Fraud Initiative (NFI) exercise where HMRC data has been matched to the council’s data for the first time.

“HMRC hold information about household composition, household earnings and property ownership. A sample of matches were investigated with the majority relating to tenancy issues.

“The counter-fraud team has provided feedback to the Cabinet Office which has been used to help refine the matches and to ensure the maximum impact is achieved from the exercise.”

A spokesman for Wolverhampton Council said: “The city of Wolverhampton Council operates a zero-tolerance policy on fraud and will not hesitate to take action as appropriate. We are pleased to be a key partner in this National Fraud Initiative data matching exercise because, ultimately, fraud against the council is fraud against the hard-working taxpayers of Wolverhampton.”

They added that the figures quoted in the report are notional figures provided by the Cabinet Office who calculate the full cost of the loss of each property to the public.

A total of 66 frontline staff have since been trained to highlight anything suspicious.

A tenancy fraud e-learning course will be distributed to all employees.

An estimated £2.1 billion is lost each year across the country due to fraud.


This result blows that £2.1bn out of the water. It's £2m in a year for just one local authority, and mostly for tenancy issues.

22 Jul 2019

HMRC misses fraud & error targets

HMRC missed its target for reducing fraud and error in personal tax credit overpayments last year, the public spending watchdog has said.

Erroneous and fraudulent overpayments increased to 5.7% of tax credits spending (£1.46bn) which exceeded the department’s target of 5% in 2017-18, according to a report by the National Audit Office.

The most recent estimates of fraud and error apply to 2017-18 but HMRC also expects to see higher levels of fraud and error in 2018-19, according to the NAO.

This because 270 full-time equivalent staff were moved from fraud and error workstreams onto EU exit ones, reducing its capacity.


16 Jan 2018

Predictable left-wing benefit fraud bias from The Independent

More than 280,000 public tip-offs on benefit fraud in the past two years have resulted in no action being taken against a claimant due to lack of evidence, The Independent can disclose.

The revelation has led to claims the Government is guilty of creating a “witch-hunt”, with critics calling on ministers to re-evaluate the contentious system, suggesting members of the public should not have a role in identifying and investigating fraud within the welfare state.

Through the DWP Fraud and Error Service, members of the public can log their suspicions about those they believe are committing benefit fraud.

Details can be reported either through a fraud hotline or online, and include eye colour, piercings, scars, age, national insurance number, email address, nickname and date of birth.

But information obtained by The Independent through freedom of information laws reveals that over the financial years 2015-16 and 2016-17, 332,850 cases were closed following reports by members of the public. Of these, 287,950 were found to have no or little evidence to substantiate the claim – or 87 per cent.

When no further is action is taken by the department against a claimant because there is no or insufficient evidence of fraud discovered, the case is recorded as a “no result outcome”.

In March 2017, for example, out of 18,200 allegations from members of the public closed by the department, 16,050 led to a “no result outcome”. This means that around 88 per cent of the total allegations made in one single month had little or no evidence of benefit fraud having taken place and the cases were dropped. Overall in the year 2016-17, nearly 174,000 allegations were closed and 149,450 – or 86 per cent – were incorrect allegations.

The data appears to show that members of the public are overestimating the issue of benefit fraud in Britain and that the Government’s policy of using tip-offs is much less effective than many are led to believe.

Or it could be that the system is ponderous and investigators are overwhelmed by the sheer numbers. Of course there will be some malicious allegations, but many will be based on local observation on the ground.

Here we go with left-wing opposition reactions.

Responding to the figures, Debbie Abrahams, the Shadow Work and Pensions Secretary, said: “Any fraud or abuse of our social security system should be dealt with quickly and proportionately. However, the Conservative Government have long directly and indirectly implied that all recipients are ‘shirkers and skivers’. The punitive way the Tories have delivered social security policies, such as sanctions and fitness for work assessments, reflects this approach. What these figures show is how flimsy the ground is for this divisive rhetoric. The Government should instead focus on getting their own house in order and tackle the failing PIP [Personal Independence Payment] and ESA [Employment and Support Allowance] assessments as well as pausing and fixing their botched Universal Credit roll-out.”

Neil Gray, the SNP MP and the party’s social justice spokesperson, said that while those who abuse the system should be dealt with, the “responsibility of identifying and investigating benefit fraud should be with the DWP, not your neighbours. These new figures show the Tories are guilty of creating a witch-hunt which demonises low-paid workers relying on tax credits and the sick and disabled who are unable to work. It’s another example of the Tories dividing communities as neighbours become suspicious of each other.”

Of course if the masses couldn't report suspicions of benefit fraud, they would just settle back into dumb contentment, no?

And Sir Vince Cable, the Liberal Democrat leader, said the scale of benefit fraud “is not remotely comparable to the industrial-scale problem of tax avoidance by big corporations and the extremely wealthy. Yet the Conservatives seem to think they can get more money back by using far fewer resources getting people to act as sneaks, turning people against each other.”

A spokesperson for the DWP said: “Only a small minority of benefit claimants commit fraud, but those who do are diverting support from people who need it the most. Calls to the fraud hotline are vital in tackling this crime – and information from the public helped us detect more than £45m in benefit fraud in 2016 alone.”

Previous data, covering the years 2010 to 2015, found that the DWP closed 1,041,219 alleged cases of benefit fraud from members of the public. Of these, 887,468 were recorded as a “no result” outcome – or 85 per cent.

According to Government data in 2017, fraud in the benefit system accounted for 1.2 per cent of the entire DWP budget, amounting to just over £2bn. But as well as individuals, it is estimated that criminal gangs have also been abusing the system to the tune of tens of millions of pounds. Until recently, the DWP often used advertising to persuade members of the public to come forward and use the Government’s hotline if they suspected neighbours and other members of the public to be committing benefit fraud, telling them they had a “role” to play in stopping such activity.

Caroline Lucas, the co-leader of the Green Party, added: “The vast majority of people claiming benefits simply need support but all too often what they get is suspicion and scapegoating as scroungers. It’s time we saw our welfare system as a valuable part of a strong future facing economy and no longer encouraging friends, neighbours and colleagues to treat one another with suspicion could be a positive step in the right direction.”

It's remarkable how left-wing politicians regard people as malleable. Take away the chance to report suspects, and people won't mind at all, these politicians suggest.

The politicians might instead ask how the ponderous DWP investigators manage to make so little of this detailed, on the ground knowledge.


4 Dec 2017

Benefit fraud surges by £200m in a year as record levels swallow up £2.1 billion of department's budget

Benefit fraud has reached record levels after it rose by £200 million in the space of a year, the DWP has admitted.

Fraud swallowed up almost £2.1 billion of the department’s total budget of £174 billion – the equivalent of £40 million per week.

It means that the DWP now loses almost twice as much money to fraud as the entire budget of the Foreign Office, which is £1.1 billion per year. MPs said David Gauke, the Work and Pensions Secretary, now had “questions to answer” over why the figures have gone up despite repeated assurances that they would be brought under control.

Figures released by the DWP show that in 2016/17 the total amount of money lost to “overpayments” – which counts both fraud and errors by staff – stood at £3.6 billion, up £300 million from the previous year.

Around £1.1 billion of that money was recovered, meaning net losses stood at £2.5 billion. Fraud accounted for 1.2% of the entire DWP budget, compared with 1.1% the previous year, largely because housing benefit fraud was at its highest ever level of 4.5%.

The new Universal Credit system was also targeted by fraudsters, with £50 million lost. Another £40 million was lost to errors by staff and claimants. The DWP claimed part of the reason fraud had gone up was because of better methods of gathering information on it, but a spokesman admitted that did not explain the overall increase in overpayments.

Frank Field, the  Labour MP and chairman of the work and pensions select committee, said: “David Gauke has got some questions to answer about this. After the Chancellor, the Secretary of State for Work and Pensions has arguably the most important job in Government because of the size of the department’s budget. The Government is losing huge amounts of money at the same time as it is making a mess of the roll-out of Universal Credit.”

A DWP spokesman said: “We have brought in reforms to improve detection, prevention and recovery and our fraud investigators work tirelessly to bring criminals to justice. Last year we prosecuted around 5,000 fraudsters and issued around 6,000 administrative penalties and recovered a record £1.1  billion in overpaid benefits. Meanwhile, Universal Credit will reduce fraud and error by £1.5 billion when it is fully rolled out.”

In September, Judge Nicholas Dean QC criticised the DWP for failing to tackle benefits cheats and said that people should be forced to pay back money sooner.

And that's just what they admit to - they don't go looking!


15 Nov 2017

The annual cost of tenancy fraud

According to The Stack (h/t Tenancy Fraud)
There are currently 1,174 housing associations operating in the UK, providing accommodation to local councils for those on low incomes or who need extra support. However, issues such as social housing fraud, which the University of Portsmouth estimates is costing the UK £1.76 billion a year, are making it increasingly harder to provide the right service to citizens in need.
The Audit Commission put the cost of social housing tenancy fraud to the taxpayer nationally at £1.8 billion in 2012, so this certainly isn't an extreme estimate.

Remember, this is an annual figure. And it's additional to more conventional benefit fraud, which even parts of the government admit are over £2bn, but which is probably nearer £5bn in all.

2 Aug 2017

Over 40% of benefit fraud prosecutions are in Greater London

London's over-40s are the people most likely to get into trouble over benefit fraud, with women more likely to be charged than men.

The last year's records of fraud defence lawyers DPP Law show that more than two thirds of cases involved people over 40. The most honest age group was 18 to 24, with just one case that went to court. The data also showed a fair split between the sexes, with women slightly ahead at 52.

The biggest hot spot for benefit fraud was Greater London, with the area accounting for around 43% of the total. Merseyside was in second place with 35%. However, in a third of cases that went to court, the person charged got off.

"Our solicitors have worked on a lot of benefit fraud cases over the years and these results highlight the broad spectrum of these types of proceedings," says Stuart Nolan, managing director of DPP Law. "Many benefit fraud cases are often the case of overpayment, which can happen without an individual's intent to defraud. We've also seen a lot of the clients we have defended found not guilty. So, in the arena of benefit fraud, there are a lot of shades of grey."

It's the Department for Work and Pensions (DWP) that's in charge of benefit fraud investigations, with many staff located in local Jobcentre offices. Local authorities also carry out housing benefit and Council Tax benefit fraud investigations.

Those found guilty of benefit fraud are usually ordered to pay back the cash - and may also be hit with an extra penalty of between £350 and £5,000, as well as having their benefits cut or stopped.

Many people are caught via tip-offs on the hotline - like businesswoman Ncola Alcock earlier this year. Claiming to be living alone, she netted more than £81,000 in child tax credits and housing benefit over a period of five years. However, she'd been daft enough to post the fqact that she was married on her Barking Mad business website - and was shopped to the authorities.

And just last week, George Beacham was caught working as a binman after claiming he 'could only walk two yards in 15 minutes'.


17 Jul 2017

And now tax credit fraud

Almost £1.6billion of tax credits have been overpaid in a year due to a rise in benefit fraud and errors by HM Revenue & Customs.

The National Audit Office watchdog warned the problem was set to get worse as HMRC becomes more overstretched, and hundreds of thousands of people on low incomes move from tax credits to the new Universal Credit system.

HMRC’s annual report revealed that an estimated £1.57billion of overpayments were made due to error and fraud in 2015/16.

This is up almost 15 per cent from £1.37billion in the previous year. It is the first increase since the Coalition came to power in 2010.

About 4.4million families claim working tax credits or child tax credits to top up their income.

For the first time since 2012/13, HMRC also missed its target of ensuring the amount overpaid due to fraud or error was less than 5 per cent of the total amount paid in tax credits.

The NAO said: ‘HMRC’s estimated increase in error and fraud within tax credits is contrary to the significant reductions achieved in previous years, and the rate is expected to increase further.’

HMRC sacked US firm Concentrix last October after bringing it in to crack down on fraud. It got rid of the firm in response to claims that 45,000 people were wrongly having their benefits removed. This means HMRC staff are having to counter fraud themselves. Tougher rules designed to stop bogus benefit claims are also likely to push up the fraud figures.

Last night Lib Dem MP Jamie Stone said: ‘People will be shocked to see that while their local schools and hospitals are facing cuts, almost £1.6billion of taxpayers’ cash has been paid out due to fraud or error. Meanwhile, some people are still not receiving the payments they deserve. The Government needs to get a grip.’

Frank Field, Labour MP and former chairman of the committee, said: ‘We need to safeguard taxpayers’ money.’


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.

13 Jun 2017

National benefit fraud totals?

This is the BBC's soothing take on benefit fraud. They are essentially expounding the government's own numbers. By comparison with 2012-13, note how the biggest single item, housing benefit fraud, has shot up, even on the government's estimates. It remains true the the government is not exactly going out ruthlessly to identify benefit fraud. If that was what it wanted to do, it would do an in depth study in one locality and then scale up its national estimates based on that.

Better to let sleeping dogs lie than court political accusations of failure.

Let's start with a question.

What percentage of benefit payments do you think is lost to fraud?

A survey in 2013 by Ipsos Mori suggested people believed that £24 out of every £100 spent on benefits was fraudulently claimed.

What do you think - too high, too low? Want to know the real answer? It's £1.10 in every £100.

The figure is an estimate from an official government document, from the Department for Work and Pensions (DWP), published last December and refers to the financial year 2015-16.

The figure may well be a lot less than you thought, but it's still a lot of money. In 2015-16, total spending on benefits was £172.3bn, which means that £1.9bn was fraudulently claimed.

The fraud rate - 1.1% - rose from 0.8% in 2014-15, and now stands at the highest recorded rate. That may be because more people are "at it", but probably not.

After the end of the 2014-15 financial year, officials changed their methodology, which has resulted in more overpayments being attributed to fraud rather than claimant error.

The DWP has looked at five benefits in particular - universal credit (UC), housing benefit, employment and support allowance (ESA), jobseeker's allowance (JSA) and pension credit.

They calculated that the largest fraud in 2015-16 - totalling about £1bn - was in the housing benefit system. These fraudulent claims amounted to 4.1% of the total paid out in housing benefit. (But some of the figures are huge - see for instance Southwark.)

In fact, the recalculation carried out recently has led officials to believe that fraud is on the rise in housing benefit, ESA and pension credit, but falling among claimants of JSA.

In UC - which sees six benefits rolled into one monthly payment - the statistics are less certain as there are fewer claimants and the benefit hasn't been fully rolled out yet. But officials believe that fraud in UC is less than on JSA.

Honest mistakes?

Fraud payments are part of a wider category - benefit overpayment - which also includes honest errors by claimants and mistakes by officials.

The total overpayment in 2015-16 was £3.3bn, about 1.9% of all benefit payments.

But bear in mind that not all of that is lost - the department does recoup some of it and £1bn was repaid to the Treasury last year, which still means that more than £2bn was lost.

The DWP's inability to reduce fraud and error to much lower levels led the National Audit Office to chastise the department last summer, "qualifying its audit opinion" in official speak. But the DWP's accounts - and those of its predecessor departments - have been similarly berated every year since 1988-89.


One final point - while some people are being paid too much, others are receiving too little. The amount underpaid to benefit claimants in 2015-16 was £1.7bn, or 1% of total expenditure, the highest recorded rate. Most of it was due to errors by the claimant (£600m) with the other £400m due to mistakes by officials.

So in 2015-16, the government overpaid benefits to the tune of £3.3bn, of which £1bn was recouped, while claimants were underpaid £1.7bn.

It all means the Treasury was £600m down due to fraud and error in the benefits system.

Well that's the BBC's establishment take!

31 May 2017

Could ID cards address rising benefit fraud?

According to the latest figures from the Department for Work and Pensions (DWP), benefit fraud is costing the UK £2.0bn a year. From scammers posing as deceased relatives through to ex-pats failing to mention they live in Alicante, it’s seemingly only getting worse. (h/t Dave)

The welfare system hasn’t exactly made life easy for itself. An entangled network of needs-based benefits, coupled with antiquated methods of ID verification, has made it easy to exploit. But due to a wave of new technologies, this tired old framework is finally set to change. Quite how far will depend on the decisions we make collectively.

Reducing fraud at the point of application

Until recently, it’s been notoriously difficult to check someone’s circumstances across different public sector departments. This lack of cooperation has led to millions being lost through fraudulent claims for Jobseeker’s Allowance - even by those working within the public sector itself. It’s also enabled thousands of people to receive a pension in the name of a deceased relative.

Part of the problem is being addressed with the introduction of Universal Credit (UC), which is a clear acknowledgement that the benefits system has become a labyrinth of complexity. Having one single application process for a range of awards removes the risks associated with conflicting information. The DWP is already saving money - in 2013/14, it recovered an extra £100 million of fraud and error-related debt compared to 2009/10.

As a further safeguard, the verification process for a UC claim now draws upon up-to-date earnings from HM Revenue and Customs (HMRC). The technology, understandably known as “Real Time Information” lets the DWP check an applicant’s current income. HMRC now insists that employers and pension providers provide these figures immediately after making a payment, rather than annually.

But the most notable new technology is the National Fraud Initiative’s (NFI) AppCheck tool. For the first time, any department can verify an individual’s circumstances with over 1,300 other organisations including the DWP, the Home Office, local councils, police authorities and private companies. In total, around a third of a billion records are trawled through. The chances of successfully claiming a benefit fraudulently are diminishing for each new data source that’s added.

Beyond this, the next step brings with it a whole new level of controversy. Last year, the DWP began a trial using blockchain, which involves claimants downloading a mobile app to receive and spend money. Every transaction is recorded on a ledger to help them improve their budgeting. Potentially, it could allow the DWP to specify where recipients spend their cash - although this has been denied by Conservative peer Lord Henley. Ministers are currently considering extending the trial, which was originally carried out by Disc (formally GovCoin).

Monitoring changes in circumstances

The National Benefit Fraud Hotline receives over 1’000 calls a day, but according to a freedom of information request to the DWP, 85% of reported cases turn out to be false. So it’s quite plausible that the cost of investigations could easily negate the overall savings.

But the Government’s reliance on anonymous tip-offs is set to be replaced by improved data matching. In addition to its Appcheck tool, the NFI also carries out frequent data comparisons across a myriad of sources. In 2016, it identified 172,907 fraudulent claims, resulting in savings of £198.2 million. Almost half of this was derived from simply comparing pension payments with the Disclosure of Death Registration Information from the General Registrar’s Office. Even though this doesn’t seem to be particularly groundbreaking, it’s actually highly significant given the public sector’s usual reticence for collaboration.

It’s only a matter of time until machine-learning algorithms can identify fraudulent activity with even more certainty. Exposing artificial intelligence to the NFI’s records will enable it to accurately spot discrepancies and even predict where fraud could occur.

Identification checks

The current ‘approved forms of ID’ have been around for decades. Even a new claim for UC only requires a driving license, passport or EEA national identity card. But reams of forged documents are in circulation and every year around 1,000 fake passports are seized at border points. A quick search for “how to create a fake driving license” lists almost two million results.

Manchester-based VST Enterprises has created a technology, known as the VCode system, which makes it decidedly harder to claim benefits in a false name. It’s currently being trialled in India and the US where users can authenticate themselves using a variety of secure personal data. Louis-James Davis, CEO, explains:

“Currently in India and the USA, benefit claimants are provided with a magnetic striped card loaded with funds that they can redeem at grocery outlets etc. That system has caused plenty of difficulties that VCode addresses. It’s been found to be more secure and effective in ensuring benefits go to genuine claimants than the magnetic strip system it’s replacing.”

In the UK, the technology could potentially be integrated into ID cards “as a multifunctional system, securely containing biometric and demographic data”, such as “ID photographs, fingerprints and iris scans.”

Moral dilemmas

As a society we need to think carefully about our next step. Do ID cards encroach on our civil liberties? Should we dictate where benefits are spent? How far are we prepared to move towards one centralised record which is accessible by private companies?

Technology is evolving to such an extent that benefit fraud could be eradicated within the next ten years. Perhaps the only potential stumbling block is our inbuilt resistance to change.


2 Jan 2017

Happy new year to benefit fraud readers

The Mail reveals what it claims are the most bizarre benefit frauds of 2016

But what's most interesting is its account of the national benefits totals.
A record £1 billion was recovered from thousands of offenders who were brought to justice for wrongly claiming welfare over the last 12 months.

The Government pays out a whopping £172 billion in benefits to around 20 million people every year.
It reports there were 5,000 convictions of benefit fraudsters over the last year, which is a nice round number.

This represents tinkering with the problem, as we will continue to report.

Happy new year to our readers.