Benefit fraud bill is still on the rise as total hits £3.3bn despite PM's crackdown pledge

By Daniel Martin

Last updated at 7:50 AM on 31st August 2011The Daily Mail

 

The amount of money lost to  benefit fraud and error has soared by a staggering £200million since the Coalition took office – despite repeated pledges from David  Cameron to fight the scandal.
Figures buried in a government document reveal that last year £3.3billion was lost to benefit cheats and mistakes by claimants and officials, up from £3.1billion in Labour’s final year in power.
The failure to crack down on fraud makes it even less likely that the Government will fulfil its promise to slash fraud and error by a quarter by 2015.
The huge sum lost to public finances in 2010-11 works out at £105 a second. It could have paid the salaries of around 170,000 nurses for a year, at a time when frontline public services are being cut to balance the country’s books.
Unemployment benefit fraud, in particular, is spiralling out of control, according to the annual report of the Department for Work and Pensions.

Fraudsters are cheating the public out of six times as much jobseekers’ allowance as they did five years ago.
The National Audit Office refused to sign off the DWP’s accounts for the 23rd year in a row as a result of its failings.

Last summer, Mr Cameron described the massive amount of money lost to fraud as ‘absolutely outrageous’ and said ‘we cannot stand for it’.
He pledged: ‘We need to do more to stop fraud. This is simply not acceptable. We will take the necessary measures to stop fraud happening in the first place, root out and take tough action against those found committing fraud and make sure the stolen money is paid back.

 

‘The first port of call in cutting spending is to stop paying  money to people who shouldn’t receive it. Cutting fraud and bureaucracy in welfare should be the first and deepest cut we will make.’
Last night Matthew Elliott, chief executive of the TaxPayers’ Alliance, said the latest figures showed Mr Cameron had so far failed. ‘Hardworking taxpayers will be angry their cash is being lost to error and ending up in the hands of benefit cheats,’ he said.
‘It’s unacceptable that the fraudsters are getting away with stealing ever increasing amounts of our money from a flawed welfare system.’
Of the £3.3billion in over- payments, around £1.2billion came from out-and-out fraud, and another £1.2billion was a result of inadvertent mistakes by claimants.
Around £800million was lost because of mistakes made by officials, when a benefit is paid incorrectly due to inaction, delay or a mistaken assessment.
Across all benefits, the amount lost to fraud has gone up by 50 per cent in 2006-07, when it was  £800million, to £1.2billion now.
The DWP’s annual report said: ‘Overall the latest figures show that between 2009-10 and 2010-11, estimated overpayments due to fraud and error remained at 2.1 per cent of benefit expenditure but the amount overpaid increased (£3.1billion to £3.3billion). These changes were driven by increases in overpayments due to fraud and customer error, with a reduction in overpayments due to official error.’
In fact, in percentage terms, the amount of overpayments increased slightly, from 2.09 per cent to more than 2.14 per cent.
Overpayments went up despite the establishment last year of ‘error reduction centres’, which managed to find only £1.5million of savings, the report said.
A DWP source said: ‘We inherited a benefits system in a mess at a time when it was most needed by those hit by the recession.
‘We are in the process of a radical overhaul to introduce Universal Credit and beginning the biggest fightback against fraud in the last decade.’