Press Release - Department for Work and Pensions: Resource
Accounts 2009-10
27 July 2010
The head of the National Audit Office, the Comptroller and
Auditor General, has qualified the accounts of the Department for
Work and Pensions, which have been qualified every year since
1988-89. The accounts have been qualified because of the material
level of fraud and error in expenditure on state benefits, except
for the State Pension which has a low level of error and therefore
this element of the accounts has not been qualified. The total of
overpayments made by DWP, due to fraud and error, is an estimated
£3.1 billion (compared with £2.7 billion in 2008-09).
Across the £148 billion of benefits administered by DWP, a total
of £1 billion was lost to fraud, £1.1 billion to customer error,
and £1.1 billion to official error. The total sum lost is 2.1 per
cent of overall benefit expenditure; this represents an increase in
both the value and the proportion of benefits being overpaid, which
were £2.7 billion and 2 per cent respectively in the previous year.
Total underpayments in 2009-10 are estimated to be £1.3
billion.
Some benefits are prone to error and the Department faces
significant challenges in administering a complex benefits system
in a cost effective way. The Department has, however, put
significant work into reducing fraud and error within the benefit
system in recent years. This year, as a result of the economic
downturn, the Department has faced a significant increase in demand
for work-related benefits, which has worsened the levels of fraud
and error.
Amyas Morse, 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 £3.1 billion of overpayments and £1.3 billion
of underpayments. Over the last year the Department has been under
increased pressure, caused by the increase in benefits claimants
because of the economic downturn, and this has led to a slight
increase in the error rate.
"Although the processing of benefits will always be
subject to some degree of fraud and error, the Department should
continue to find ways of driving down the level of funds that are
erroneously overpaid to benefits claimants.
Notes for Editors
- Press notices and reports are available from the date of
publication on the NAO website, which is at www.nao.org.uk. Hard copies can be
obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Amyas Morse, is the head
of the National Audit Office which employs some 900 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 53/10
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