The numbers and thinking behind the Benefit Fraud Strategy announced last month have been revealed in an Audit Commission report. The strategy to crackdown on fraud ( see Publicnet Briefing 26 March 1999) integrates information technology with other measures to stem the flow of cash out of the system.
The Commission’s report shows that the Benefits Agency and local councils who are jointly responsible for administering the benefit are climbing a massive fraud mountain. Some eleven billion pounds is paid out annually to four million claimants. It is estimated that about 8% of this amount, 845 million pounds, is paid out in illegal claims. The strategy target is reduce the loss from fraud by one billion pounds over five years. This is an admission that fraudsters will net over three billion pounds during this period.
The reasons for this modest target become clear when progress in 1998 is brought into the picture. Despite publication of an Audit Commission report in 1997 urging prompt and decisive action, administration of the benefits is described as ‘poor’ in 40% of councils. One third of councils have unsatisfactory arrangements for recovering overpayments and prosecutions for fraud are described as ‘rare’. What is more worrying is that investigations have revealed significant fraud by council officers and members. In the light of this latest report, the target looks ambitious.