Press Release - Department for Work and Pensions Resource
Accounts 2005-2006
7 November 2006
Head of the National Audit Office Sir John Bourn has today
reported to Parliament that he is qualifying his opinion on the
accounts of the Department for Work and Pensions. This is because
of substantial levels of estimated losses from fraud and error in
benefit payments and material uncertainties about the level of debt
resulting from the overpayment of customers.
Sir John has reported that the amount lost from payments in all
benefits in 2005-06 because of fraud and error is approximately
£2.7 billion, representing 2.2 per cent of the DWP’s total
expenditure in 2005-06 of £124.2 billion.
This is the seventeenth year in which the Department’s accounts
were qualified. However, Sir John was pleased to report real
progress towards removing or tackling the qualifications which have
been made to the Department’s account in recent years. Two of the
four qualifications which were reported last year have not been
repeated as a result of improved focus and effort by the
Department.
The establishment of the Official Error Taskforce by the
Permanent Secretary, which is helping to drive down levels of fraud
and error in the Department’s payment of benefits, and the real
determination within the Department to tackle and seek to resolve
the causes of the longstanding qualifications on the Department’s
accounts, have also been welcomed.
Regarding fraud, the DWP estimates there was a £200 million
reduction in losses in relation to Income Support, Jobseekers
Allowance and Housing Benefit. In respect of error, initiatives are
underway to target the most significant causes of officials’
mistakes regarding Income Support, Jobseekers allowance, Pension
Credit and Disability Living Allowance, which are estimated to
account for some 60 per cent of the total amount of loss caused by
official error in these benefits.
The DWP is also working to strengthen controls on customer
overpayments and to improve recoveries of the losses. New systems
rolled out in 2005-06 will help the Department track and thereby
recover identified customer overpayment debts. Currently, a
significant number of potential overpayments are delayed in their
recovery by a combination of system backlogs and poor debt referral
processes. From 2007-08, chief executives from each departmental
Agency will be responsible for ensuring timely referral of
overpayments debtors to a centralised Debt Management function for
action.
Although challenges remain, when compared to the government
departments in other countries tackling this problem, the DWP is at
the forefront. It has a good understanding of the scale of the
problems faced and has focused activities to combat them.
Sir John Bourn said today:
“The Department for Work and Pensions has shown a clear
determination to resolve these long standing problems and early
signs suggest some real reductions in the volume of fraud and error
can be expected. It is always encouraging to see such progress, but
the scale of the challenge ahead remains considerable.
“The fact is that, in 2005-06, an estimated £2.7 billion
was paid out to people who weren’t entitled to the
money.”
Notes for Editors:
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office, which employs some 850 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 58/06
All enquiries to Mark Anderson, NAO Press Office:
Tel: 020 7798 7558
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