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Department for Work and Pensions 2013-14 accounts

Full report: Department for Work and Pensions 2013-14 accounts

The Comptroller and Auditor General, Amyas Morse, has qualified his audit opinion on the accounts of the Department for Work and Pensions owing to the material level of fraud and error in benefit expenditure, other than State Pension where the level of fraud and error is lower.

The accounts of the Department, and those of predecessor Departments administering this expenditure, have received similar qualified audit opinions since 1988-89.

The Department estimates total overpayments due to fraud and error in 2013-14 are £3.3 billion, which equates to 2 per cent of the total forecast benefit expenditure of £163.9 billion. This has decreased from 2.1 per cent to 2 per cent since 2012-13, which the Department primarily attributes to the removal of Council Tax Benefit from the estimate following its abolition in April 2013. The Department estimates the total underpayments in 2013-14 to be £1.4 billion, or 0.9 per cent of total benefit expenditure.

Within those figures, the Department estimates that in 2013-14, fraud and error within State Pension resulted in overpayments of £0.11 billion, which is 0.1 per cent of related expenditure, and underpayments of £0.12 billion, which is 0.1 per cent of related expenditure.

In order to develop effective ways of reducing fraud and error in benefits expenditure, the Department needs to understand properly how and why overpayments arise in individual benefits.

According to the NAO, some benefits, mainly those with means-tested entitlements, are more inherently susceptible to fraud and error owing to their complexity, the difficulties in obtaining reliable information to support the claim and the challenges of capturing changes in a claimant’s circumstances. These more difficult to administer benefits, such as Pension Credit, tend to be the ones exhibiting the highest estimated rates of fraud and error.

In contrast, the C&AG has again been able to issue a clear opinion on regularity on the Social Fund White Paper Account 2013-14. This is because the Department has achieved a substantial and sustained reduction in the level of error for Social Fund benefits.

Notes for Editors

  1. The NAO’s report on the Social Fund White Paper Account 2013-14 is available on the NAO website.
  2. 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 by using the relevant links on our website.
  3. The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Amyas Morse, is an Officer of the House of Commons and leads the NAO, which employs some 820 staff. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of almost £1.1 billion in 2013.

Contact

NAO Press Office
+44 (0)20 7798 7400 or email pressoffice@nao.org.uk

PN: 33/14