Figures released from the DWP show that benefit over-payments due to fraud and error remained at a record high of £3.3 billion in 2013/14, but you wouldn’t know this from reading the gushing press release that accompanied the statistics.
Instead the DWP boldly claims that Jobseekers Allowance and Income Support over-payments are at their lowest recorded levels. But these represent just ten percent of the total amount lost through fraud and error. The amount of Housing Benefit overpaid, for example, has soared to £1.38 billion and is by far the largest source of fraud and error in the system. No-one seems to be checking how much of this figure ended up in the pockets of landlords.
With Iain Duncan Smith busy bungling the launch of Universal Credit, it was left to the Minister for Welfare Reform, the aptly named Lord Fraud, to defend the figures, which he did by if not lying through his teeth, then deliberately distorting the truth. According to the minister: “It is encouraging to see that the level of fraud and error is now lower than before the start of the Parliament.”
The rate of over-payments dropped from 2.2% in 2009/10 to 2% in 2010/11 and has stayed there ever since. According to the DWP themselves this is not statistically significant and could be due to inaccuracies in the data. The cost of fraud and error however has risen since the start of this Parliament and it is this that the DWP is trying to hide.
On face value it looks like over-payments fell in the last year, from £3.5 billion to £3.3 billion. But this is because Council Tax Benefit expenditure was not included in the figures after being scrapped in April 2013. Over-payments in Council Tax support schemes are no longer the DWP’s problem, and so will no longer be included in the statistics.
The table below shows amount lost through fraud and error if Council Tax Benefit is also excluded from the previous year’s figures. What it shows is that the cost of over-payments rose year on year since the election and then hit £3.3 billion for each of the last two years. This was not explained in Lord Fraud’s press release and the real numbers can only be found in Annex 6 on the very last page of a 147 page DWP report (pdf).
The truth about the amount lost to fraud and error in the benefits system is that’s it’s not very much and whilst it has risen slightly it hasn’t really changed significantly since this Government weren’t elected. This is a huge embarrassment to Iain Duncan Smith who is currently squandering the best part of a billion pounds in an attempt to halve benefit over-payments by next year. It is unsurprising that the DWP’s fraud and error strategy was this week given a red/amber rating (meaning it’s a fuck up) in the same Government report into major projects that revealed that Universal Credit has been ‘reset’.
The amount of money lost only to fraud in particular is very small – around a billion a year for all benefits, including pensions. This is less than the amount of benefits which are underpaid, which stands at £1.4 billion. The report which accompanies the over-payment statistics, contains some interesting details, such as the amount lost to fraud due to people on the dole working on the side being estimated to be as little as £59 million – about a quid a year for every person in the country. Tax avoidance and evasion was about £35 billion in 2010/11, costing us each nearly £600 a year. You won’t see that in a DWP press release. Ever get the feeling you’ve been cheated?
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