Leigh: Demanding action on fraud

A damning account of "astronomical" benefit fraud and error has been published by MPs.

The public accounts committee demanded that the Department for Work and Pensions must step up its drive to reduce cheating and mispayment in the benefits bill.

The committee found that in 2003/04, the DWP lost an estimated £3bn out of its total expenditure of £109bn to fraud and error.

Some £2bn was spent on benefit cheats while £1bn is accounted for by customer and official error.

Edward Leigh, the committee chairman, slammed the failure to effectively combat abuse of the benefits system.

"The astronomical scale of the amount of benefit money being lost through fraud and error is vividly brought home to taxpayers by the astonishing fact that the figures are rounded to the nearest half a billion pounds," he said.

"The Department for Work and Pensions has now had its accounts qualified by the NAO for 15 years running and, according to the department's own estimates, in each of the three years up to 2003/04 £3bn of welfare benefits were lost."

Simplification

The committee accepted, however, that progress has been made in cutting losses in the highest risk benefits.

"But fraud and error are unlikely ever to be brought under proper control unless benefits systems for both staff and customers are simplified," added Leigh.

"To address this the department must tackle a whole range of besetting difficulties.

"Progress must be made in tightening up the accuracy of its measurement of fraud and error which is at present full of uncertainty."

The committee also warned that recent organisational changes and plans to shed a quarter of its workforce "will not make the department's job any easier".

David Laws, the Liberal Democrat work and pensions spokesman, said ministers had to shoulder the blame for the failure to tackle fraud.

"Labour have been promising to tackle benefit fraud and error for eight years now," he said.

"But each new benefit and tax credit they introduce is more complicated than the next, laying the system open to yet more fraud and error.

"British taxpayers deserve better than a government which loses them each £100 a year on benefit fraud and error whilst fraud."