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Losses due to housing benefit fraud and errors rising, say MPs Losses due to housing benefit fraud and errors rising, say MPs
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Iain Duncan Smith’s department has failed to tackle escalating losses due to fraud and error in the housing benefit system, according to a report by parliament’s spending watchdog.Iain Duncan Smith’s department has failed to tackle escalating losses due to fraud and error in the housing benefit system, according to a report by parliament’s spending watchdog.
The Department for Work and Pensions overpaid claimants with £1.4bn of taxpayers’ money from 2013 to 2014, the public accounts committee has said. The MPs also found that civil servants had “done nothing” to tackle underpayment, which has put thousands of claimants into hardship, they said. Ministers and senior civil servants were pointedly criticised in the report’s conclusions for failing to come up with a strategy to tackle the problem.The Department for Work and Pensions overpaid claimants with £1.4bn of taxpayers’ money from 2013 to 2014, the public accounts committee has said. The MPs also found that civil servants had “done nothing” to tackle underpayment, which has put thousands of claimants into hardship, they said. Ministers and senior civil servants were pointedly criticised in the report’s conclusions for failing to come up with a strategy to tackle the problem.
Duncan Smith has repeatedly promised to clamp down on benefit fraud, and has claimed that the introduction of universal credit (UC), which aims to roll six benefits into one payment, will bring an end to many of the problems in the system. However, the figures show that fraud and error are rising, while UC is behind schedule – only 20,000 people are currently claiming it, rather than the one million envisaged by ministers.Duncan Smith has repeatedly promised to clamp down on benefit fraud, and has claimed that the introduction of universal credit (UC), which aims to roll six benefits into one payment, will bring an end to many of the problems in the system. However, the figures show that fraud and error are rising, while UC is behind schedule – only 20,000 people are currently claiming it, rather than the one million envisaged by ministers.
Housing benefit is paid to 5m households on low incomes. The report said that in the last financial year, £1.4bn of overpayments were made – 5.8% of housing benefit spending – up from £980m (4.6%) in 2010/11. Claimant error was the cause of two-thirds, or £900m, of overpayments, the report said. But £340m of overpayments were due to fraud and £150m of overpayments were due to delay, inaction or mistakes in assessment by local authority officials.Housing benefit is paid to 5m households on low incomes. The report said that in the last financial year, £1.4bn of overpayments were made – 5.8% of housing benefit spending – up from £980m (4.6%) in 2010/11. Claimant error was the cause of two-thirds, or £900m, of overpayments, the report said. But £340m of overpayments were due to fraud and £150m of overpayments were due to delay, inaction or mistakes in assessment by local authority officials.
Margaret Hodge, the chair of the committee, said the size of overpayments was going up not down. “The increase shows that the department has still not effectively targeted the major sources of fraud and error – 16 years after this committee first sounded the alarm. Even after recoveries by local authorities, this is a huge cost to taxpayers,” she said.Margaret Hodge, the chair of the committee, said the size of overpayments was going up not down. “The increase shows that the department has still not effectively targeted the major sources of fraud and error – 16 years after this committee first sounded the alarm. Even after recoveries by local authorities, this is a huge cost to taxpayers,” she said.
Hodge added that, other than a media campaign that is largely targeting overpayments, the DWP had failed to come up with a method to specifically help claimants who were not being paid their full entitlement. “We are also concerned that the department is not doing anything to target underpayments, despite the hardship caused to those who miss out on the support they are entitled to,” she said.Hodge added that, other than a media campaign that is largely targeting overpayments, the DWP had failed to come up with a method to specifically help claimants who were not being paid their full entitlement. “We are also concerned that the department is not doing anything to target underpayments, despite the hardship caused to those who miss out on the support they are entitled to,” she said.
A DWP spokesman said money lost through fraud and error was falling overall and that the department was recovering more than before 2010 – £1.3bn was recouped last year. “We want to do more to make sure this money goes to those who need it most, which is why we’re incentivising local authorities to identify overpayments and bring fraudsters to justice.A DWP spokesman said money lost through fraud and error was falling overall and that the department was recovering more than before 2010 – £1.3bn was recouped last year. “We want to do more to make sure this money goes to those who need it most, which is why we’re incentivising local authorities to identify overpayments and bring fraudsters to justice.
“At the end of last year we brought in a new detection system that will cross-check all housing benefit claims against up-to-the-minute information on earnings and pension income. And we expect the ongoing introduction of Universal Credit to cut fraud and error by a further £1.5bn.”“At the end of last year we brought in a new detection system that will cross-check all housing benefit claims against up-to-the-minute information on earnings and pension income. And we expect the ongoing introduction of Universal Credit to cut fraud and error by a further £1.5bn.”
Local authorities have a statutory duty to administer and pay housing benefit. The DWP ultimately bears the financial cost. It reimburses local authorities for payments and provides funding for its administration.Local authorities have a statutory duty to administer and pay housing benefit. The DWP ultimately bears the financial cost. It reimburses local authorities for payments and provides funding for its administration.
In 2013/14, £23.9bn was spent on housing benefit, which is 15% of the DWP’s total benefit spending, according to the committee.In 2013/14, £23.9bn was spent on housing benefit, which is 15% of the DWP’s total benefit spending, according to the committee.