Amyas Morse, the head of the National Audit Office, said
today:
“I have had to
qualify my opinion on the Department for Work and Pensions accounts
because of the levels of fraud and error: an estimated £2.7 billion
of overpayments and £1.2 billion of underpayments. While it
is promising that the total proportion of fraud and error continues
to fall and the Department has put in place measures to try to
reduce this still further, the Department should be aware of the
risks of further fraud and error due to the pressure on the
benefits system because of the current economic
downturn.”
The head of the National Audit Office, the
Comptroller and Auditor General, has today qualified the accounts
of the Department for Work and Pensions for the 20th
consecutive year. The accounts have been qualified because of
the material level of fraud and error in expenditure on state
benefits, except for State Pension which has a low level of error
and therefore this element of the accounts has not been
qualified. The total loss due to fraud and error is an
estimated £2.7 billion.
Across the £135.9 billion of benefits administered by DWP, a total
of £900 million was lost to fraud, £900 million to customer error,
and £900 million to official error. The total sum lost
represents two per cent of overall benefit expenditure; this is a
decrease in the percentage of benefits being overpaid which was 2.1
per cent in the previous year and is the lowest ever
recorded. In monetary terms the estimated actual loss has
remained the same over the last four years. Total
underpayments in 2008-09 are estimated to be £1.2 billion.
The benefits system is very complicated and
some benefits are prone to error; therefore the DWP faces
significant challenges in reducing fraud and error. The
Department has, however, developed a number of initiatives to help
tackle fraud and error and bring the level of overpayments
down.