The National Audit Office (NAO) has warned the Department for Work and Pensions (DWP) it needs to develop more effective ways of reducing fraud and error in benefit payments, after qualifying its accounts for the 16th year in a row say Harris & Co accountants Northampton #accountantsnorthampton
Amyas Morse, NAO head, said:
‘Issuing an audit qualification is a serious matter, and the fact that similar qualifications have been in place for such a long period of time does not lessen that seriousness. I consider that the overall value of fraud and error in benefit expenditure remains unacceptably high.’
DWP estimates total overpayments due to fraud and error in 2013-14 at £3.3bn, or 2% of the total forecast benefit expenditure of £163.9bn. This is a slight drop from 2.1% in 2012-13, largely due to the removal of council tax benefit from the estimate following its abolition in April 2013. The department puts total underpayments in 2013-14 at £1.4bn, or 0.9% of total benefit expenditure.
The NAO did not qualify its opinion on state pension payments. DWP estimates show that in 2013-14, fraud and error for this benefit led to overpayments of £0.11bn, or 0.1% of related expenditure, and underpayments of £0.12bn, also 0.1% of related expenditure.
According to the NAO, some benefits, mainly those with means-tested entitlements, are more inherently susceptible to fraud and error owing to their complexity, the difficulties in obtaining reliable information to support the claim and the challenges of capturing changes in a claimant’s circumstances. It says these more difficult to administer benefits, such as pension credit, tend to be the ones exhibiting the highest estimated rates of fraud and error.
‘We recognize the challenges involved in reducing fraud and error. We are working with the department to develop our approach to evaluating the adequacy of its response to fraud and error in benefit expenditure.’
In contrast, the NAO once again issued a clear opinion on regularity on the Social Fund White Paper Account 2013-14, reporting that the department has achieved ‘a substantial and sustained reduction’ in the level of error for Social Fund benefits.
A DWP spokeswoman said:
‘Fraud and error is now proportionately lower than before the start of the parliament and we are recovering more money than ever,. As part of our long-term plan, we have created a joined up fraud and error service, and will be bringing local authority and HMRC investigators into DWP, and have announced tougher new measures against those who cheat the system.’