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Appropriation Accounts 1998-99 Class XII, Vote 1: Central Government Administered Social Security Benefits and other pay

Sir John Bourn, head of the National Audit Office, today reported the results of his examination of the Benefits Agency’s Appropriation Account. Sir John qualified his audit opinion on the account due to the level of benefit fraud and the level of error in benefit awards, principally in income support and jobseeker’s allowance. This account has now been qualified in each of the last eleven years.

In 1998-99 the Benefits Agency paid out more than £37 billion of gross expenditure in non-contributory social security benefits.


As reported by the Committee of Public Accounts last week, fraud continues to be one of the main problems within the benefits system. Tackling fraud and abuse remains one of the Benefits Agency’s top priorities, and they are pursuing a number of initiatives to reduce the level of fraud in the benefits system. This was the last year of the Agency’s Security and Control Programme, which for 1998-99 identified savings of £1,141 million. It is to be replaced starting 1 April 1999 by a new Programme Protection Strategy which aims to reduce by 30 per cent benefit losses from both fraud and error in Income Support and Jobseeker’s Allowance by 31 March 2007.

Payment Accuracy

Regarding the accuracy of benefit payments, Sir John notes that while there has been some improvement on income support by volume from 81.7 per cent in 1997-98 to 83.4 per cent in 1998-99, the estimated gross level of error has shown a significant increase from £554.6 million to £636.8 million over the same period. And there are wide regional variations, from the East of Scotland which processes over 88 per cent of awards accurately, to three area directorates in the south of England (East London and Anglia, Chilterns and, London South) all of which failed to reach 80 per cent accuracy.

There has also been an improvement in volume accuracy on jobseeker’s allowance. The Benefits Agency’s Quality Support Teams examined 30,000 awards during the year and found that the accuracy by volume of cases improved from 85.1 per cent in 1997-98 to 88 per cent in 1998-99, and they estimated the overall gross level of error to be £243.8 million, close to the National Audit Office estimate of £245.3 million.

"No one under-estimates the scale of the Benefits Agency's task in tackling fraud and error. Nevertheless the levels of both are unacceptably high. In my report I have drawn attention to the important initiatives the Agency have in place in this key area of their business but I also recognise that they face a significant challenge in seeking to achieve a real and lasting improvement."

Sir John

Notes for Editors


Press notices and reports are available from the date of publication on the NAO website at Hard copies can be obtained from The Stationery Office on 0845 702 3474.


The Comptroller and Auditor General, Sir John Bourn, is the head of the National Audit Office employing some 750 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.


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