Progress in tackling benefit fraud

Total benefit expenditure is £120 billion, with the total number of recipients at 18 million and total fraud estimated at £0.8 billion.

In the 2006-07, £154 million was spent on six strategies to reduce fraud with a Department of Work and Pensions departmental estimate of £106 million of benefit overpayments identified as a result of fraud investigation and compliance activity. Also in this period, the Department recovered £22 million of the total £339 million outstanding fraud debt. Although the National Audit Office has identified that fraud has fallen from an estimated £2 billion in 2001-02 to an estimated £0.8 billion in 2006-07, official error has risen in the same period from £1 billion to £1.9 billion.

Tackling fraud is a key priority for the Department of Work and Pensions and the report examines the main anti-fraud initiatives, recognising that tackling benefit fraud is inherently difficult, that the UK has levels of social security fraud and error which are similar to those of comparable countries, and that the Department has made good progress in tackling fraud. However, the report suggests that the Department will find it increasingly difficult to secure further year on year reductions.

Recommendations include:

• The Department's management information on fraud could be improved, with greater communication between the various departmental directorates responsible for counter-fraud work
• A review of the cost effectiveness of the Customer Compliance approach, which deals with lower risk cases of fraud, should be conducted
• A record of the outcomes of prosecution activities should be taken by case type to provide better Departmental information
• The Department must review recovery of overpayments in fraud cases and consider setting appropriate targets for recovery from customers who have committed fraud.

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