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The UK has levels of social security fraud and error which are similar to those in comparable countries, but the Department for Work and Pensions has a better understanding than other nations of the problems and is doing more to tackle them.

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A report by the National Audit Office, based on research carried out by RAND Europe, found that fraud and error overpayments are a major problem for many countries, but the UK is one of few to understand the scale of the problem. The high levels of estimated fraud and error in expenditure on benefits – £2.6 billion in 2004-05 – have led to the NAO’s qualifying the DWP’s accounts and those of the former Department of Social Security for 16 years in a row. But the problems the UK taxpayer faces are mirrored overseas, in countries such as USA, Ireland, Canada and New Zealand.

However, the DWP is ahead of agencies in other countries when it comes to addressing these problems. It is doing more to monitor and prevent customer and offical error, at the same time as combating fraud.

The DWP has invested in professional training for fraud investigators; introduced a national anti-benefit fraud advertising campaign; increased the capacity of the National Benefit Fraud Hotline to receive information from the public about fraud; is working with other Government departments to match information and data; and has produced a risk profile to help identify claims which are more likely to be fraudulent.

Internationally, there are many common problems in social security fraud and error, such as illegal working; document and identity fraud; and weakness of internal controls. But, despite regular exchanges between some countries, there is scope for improving mutual awareness of the problems and developing possible solutions.

Although it is making progress in reducing fraud and error, the DWP stands to gain from learning more about novel approaches developed by other adminstrations. For example, France and Australia are planning a central national database for customer records, and Canada has achieved savings by preventing fraud as a result of directing high-risk customers to attend meetings with officials that provide them with information about benefit programmes, their rights and obligations and the Government’s control measures.

Given their progress in understanding, controlling and reducing fraud and error, the DWP is well placed to take the lead in encouraging the sharing of lessons learnt in different countries.

“Social security fraud and error is a problem not only for the UK, but also across the world. While we always want to see further progress, the international picture tells us that DWP is at the forefront in identifying, measuring and reducing this kind of fraud and error. I am encouraged that it will be able to pass on some of the lessons it has learnt, and gain from the experiences of other countries.”

Sir John Bourn


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