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Committee to investigate DWP's lost £billions

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Committee to investigate DWP's lost £billions

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Published by Max Salsbury for 24dash.com in Central Government and also in Finance

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The Work and Pensions Committee is to start an inquiry into fraud and error in the benefits system, after recent figures showed an estimated £3.5 billion was lost in overpayments during 2012/13.

Though the Department for Work and Pensions and local authorities recovered around £900 million, there was still a net loss to fraud and error of around £2.6bn.

The committee will inquire into the causes of error and vulnerability to fraud within the benefits system, and the adequacy of the government’s strategy in dealing with it. It is particularly keen to identify potential improvements and hear about examples of good practice, including lessons to be learned from the private sector.

Official estimates of incorrect social security benefit payments—overpayments and underpayments— are categorised into three groups:

  • Official error, due to “inaction, delay or a mistaken assessment by DWP, a local authority or HMRC”.
  • Claimant error, when “claimants make inadvertent mistakes with no fraudulent intent”.
  • Fraud, in which claimants “deliberately seek to mislead DWP or local authorities which administer benefits on DWP’s behalf to claim money to which they are not entitled".

Over 2012/13, £1.6bn was lost due to claimant error, £1.2bn was due to fraud, and £0.8bn was due to official error.

The committee is now inviting submissions to assist its inquiry from interested organisations and individuals. It is particularly interested in:

• Where errors occur in the benefits system and the adequacy of steps being taken to reduce them, including: internal DWP processes; communication and joint working between departments and local authorities, including through the single DWP Fraud and Error Service (FES); and communication with claimants.
• Approaches to tackling benefit fraud, including: the proposed Single Fraud Investigation Service (SFIS); steps designed to discourage fraudulent claims and identify potentially fraudulent claims at the earliest possible stage; and the recently announced “Benefits: are you doing the right thing?” campaign;
• The implications for fraud and error of the introduction of Universal Credit and other welfare reforms, including the risks of online fraud; and the potential impacts on fraud and error reduction of utilising real-time information (RTI) on earnings; and
• Lessons to be learned from the private sector, including on online fraud protection and data protection issues.

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