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“The amount of welfare benefit being lost through fraud and error is continuing to run at an estimated £3 billion each year. Once again I must point out that Parliament intends that this money should go only to those who are properly entitled. The challenge which the Department faces in reducing the scale of fraud and error to an acceptable level is very large indeed. However, it is crucial that as much of the money as possible goes to those who are in real need.”

“While more than 90 per cent of payments are accurate, more than a fifth of the Department of Work and Pensions thousands of decisions each day on benefits contain errors. Although the number represents less than one per cent of decisions, a quarter of a million people a year go to an appeal tribunal and 40 per cent of these cases are changed in favour of the customer. Customers are also having to wait too long for the outcome. The Department could not only reduce the number of cases where customers have to go through stressful appeals but also save money for the taxpayer, if they got more decisions right first time and put right errors effectively.

“The Department should make improving decision-making a priority in their ongoing programme of organisational change. By focusing more on good quality evidence and effective communication, and setting minimum service standards, they can help to ensure that customers across the country know what to expect from the system and have increased confidence in it.”

“I have had to qualify this account yet again because maintenance assessments are still subject to high levels of error. I therefore welcome the implementation earlier this year of the Agency’s reform programme with its new, simplified methodology for calculating maintenance assessments.

The Agency believes that this will result in more accurate assessments and provide other associated benefits. The new programme has been operating for only four months and it is too early for me to assess the success of the reforms. I intend to consider their impact in my audit of the 2003-04 account.”

“The Department have a set of programmes that are designed to make fraud more difficult to commit, increase deterrence, increase the probability of frauds being detected and have increased the penalties for committing fraud. These programmes have produced some good results but more needs to be done to maintain progress. Amongst other actions the Department should continue to concentrate on areas of higher risk, address the decline in the fraud prevention and investigative activity, and evaluate the deterrent effect of the different sanctions available.”

“It is of the highest importance that money which Parliament has made available for welfare benefits is paid accurately only to those people who have proper entitlement and are in real need. Although the Department has taken significant steps to reduce the level of estimated fraud and error in recent years, the scale of losses remains substantial at £3 billion each year. The Department face a considerable challenge in reducing these losses further to an acceptable level.”

“Many tens of thousands of pensioners who live in poverty each year miss out on benefits to which they are entitled but which they fail to claim. Taking up these entitlements can have a significant effect on the lives of these pensioners since much of the additional money is spent on a range of essential items such as nutritious food and clothing.

“The Department for Work and Pensions have made a start in addressing this situation, by making it easier to claim Minimum Income Guarantee and by establishing The Pension Service, but clearly more could be done. The Pension Service cannot tackle the problem of non-take up on its own. Others who provide services for pensioners such as local authorities and the voluntary sector also have an important role to play to encourage them to claim the money to which they are entitled.”