Social Security Secretary Alistair Darling has set a target to reduce benefit fraud by 30%. As with all fraud it is difficulty to be precise about its true extent, but it is estimated that the savings on Income Support over a five year period will amount to one billion pounds. The new strategy Safeguarding Social Security sets out how the Benefits Agency and local authorities will use information technology and other measures to stem the flow of cash out of the system.
The strategy has already led to a tightening of procedures for dealing with benefit applications. Payments are not made without proof of identity and photocopies of documents are no longer acceptable. A particular weakness in the system was the use of false addresses with arrangements for forwarding payments. Royal Mail have now agreed to stop re-directing benefit cheques.
A major advantage for the benefit fraudster is the fragmentation and complexity of the system. Each benefit is held on a separate database within the Benefits Agency and local authorities have to rely on paper records for making credibility checks. A pilot scheme for cross checking records has been introduced and it is producing 70,000 anomalies per year. Local authorities are being offered a link to the Benefits Agency computers.
The reasons for increasing fraud across public services in the recent years are unclear, but it is now clearly on the management agenda. In the NHS it is estimated that prescription fraud alone amounts to some 150 million pounds per year.