Headlines: October 31st, 1997

Reports by The National Audit Office and The Audit Commission estimate that of the £11.1 billion spent on Housing Benefit in 1996-97 some £905 million may have been claimed fraudulently.The study found that many of the measures taken by the Department of Social Security and local authorities to combat fraud had been successful. The amount of fraud detected had increased dramatically and the number of local authority staff employed in tackling fraud had risen significantly. The NAO reviewed Housing Benefit from the Department’s point of view and the Commission reviewed it from the local authority standpoint. They both spell out opportunities to build on the success achieved.

‘Make it simple’ is the key message for the Department of Social Security and the Benefits Agency. Housing Benefit is complex and this complexity leads to error by claimants and confusion by both claimants and officials processing claims. This complexity also offers opportunities for dishonest claimants. Because most claimants also receive Income Support or Jobseeker’s Allowance, errors and fraud in assessment of these payments have a knock on effect in Housing Benefit. The NAO urges simplification of the benefit conditions along the lines proposed for Housing Benefit.

The Commission draws attention to the highly variable standards of benefit administration and fraud investigation by over 400 local authorities who manage Housing Benefit. It advocates the promotion of good practice and recommends better quality assurance of local authority fraud investigators’ work backed up by external audit, and by benchmarking performance.

Commenting on the reports Sir John Bourn, the Controller and Auditor General who heads the National Audit Office said: “This is an important groundbreaking study which demonstrates the value of the National Audit Office and the Audit Commission working together to tackle a significant drain on public funds, and to ensure effective working between central and local agencies.”

Andrew Foster, Controller of the Audit Commission said: “By taking an independent view of all aspects of the process we were able to identity areas where policies set in train by the Department to reduce this worrying level of fraud were successful. However, local authorities and the Department cannot afford complacency – there is scope to improve the administration of the system and thus reduce both fraud and error. “