Headlines: October 20th, 2014

The Department for Work & Pensions should have increased its focus on Housing Benefit fraud and error sooner, according to a report from the National Audit Office.

The total level of benefit overpayment due to fraud and error has increased to an estimated £1.4 billion in 2013-14 from £980 million in 2010-11. The overpayment is 5.8% of spending on this benefit.

In 2013-14, the DWP spent £23.9 billion on this means-tested benefit to help the 5 million households on low income to pay rent. Claimant error is the main cause of overpayments .
The DWP accepts that it is ultimately responsible for Housing Benefit fraud and error, and bears most of the financial risk if overpayments are not prevented or identified. The report considers that the DWP has not established sufficiently clearly how the responsibilities for tackling fraud and error are divided between it and local authorities.

According to the NAO report, the DWP has relied too heavily on the incentives in the subsidy process, when local authorities reclaim payments and the limited, data sharing and matching it provides. As a result, the Department’s management of Housing Benefit fraud and error has not provided value for money over the last few years.

Amyas Morse, head of the National Audit Office, said “Housing Benefit is a difficult benefit to administer and, against a background of unclear responsibilities and limited investment, it is unsurprising that total overpayments have increased. The Department for Work & Pensions is facing an escalating problem. The DWP has recognized the need to do more and has been developing a new strategy. As these initiatives are in the early stages, it is too early to know whether they are working. However, the Department will need to show that it is tackling problems with local authority incentives and targeting major areas of loss.”