NAO says £3bn is lost to benefit fraud and error

Link: NAO under Treasury pressure to curb costs

The Comptroller and Auditor General, in a report to Parliament, blamed ‘substantial levels of estimated losses from fraud and error in benefit expenditure’ estimated at £3 billion a year.

He also found problems with limits to the evidence made available to the NAO during an audit of Incapacity Benefit spending, and ‘material uncertainties over the completeness, existence and accuracy of amounts recorded in the accounts for benefit overpayment debtors’.

Bourn reported the amount lost from payments from fraud and error in 2003-04 was about the same as in 2001-02 and 2002-03 at around 2.8% of the department’s £109 billion gross expenditure.

He has qualified the department’s accounts and those of the former Department of Social Security for 15 years running because of the level of fraud and error, with the worst performance on Income Support and Jobseeker’s Allowance, although performance had improved by more than the department’s target.

He said the challenge of reducing the scale of fraud and error across the benefit system ‘still remains very large indeed’.

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