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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.

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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


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