WIREDGOV

• Full report - Department for Work and Pensions: Resource Accounts 2008-09
  

The head of the National Audit Office, the Comptroller and Auditor General, has today qualified the accounts of the Department for Work and Pensions for the 20^th consecutive year.  The accounts have been qualified because of the material level of fraud and error in expenditure on state benefits, except for State Pension which has a low level of error and therefore this element of the accounts has not been qualified.  The total loss due to fraud and error is an estimated £2.7 billion.

Across the £135.9 billion of benefits administered by DWP, a total of £900 million was lost to fraud, £900 million to customer error, and £900 million to official error.  The total sum lost represents two per cent of overall benefit expenditure; this is a decrease in the percentage of benefits being overpaid which was 2.1 per cent in the previous year and is the lowest ever recorded.  In monetary terms the estimated actual loss has remained the same over the last four years.  Total underpayments in 2008-09 are estimated to be £1.2 billion.

The benefits system is very complicated and some benefits are prone to error; therefore the DWP faces significant challenges in reducing fraud and error.  The Department has, however, developed a number of initiatives to help tackle fraud and error and bring the level of overpayments down.

Amyas Morse, the head of the National Audit Office, said today:

“I have had to qualify my opinion on the Department for Work and Pensions accounts because of the levels of fraud and error: an estimated £2.7 billion of overpayments and £1.2 billion of underpayments.  While it is promising that the total proportion of fraud and error continues to fall and the Department has put in place measures to try to reduce this still further, the Department should be aware of the risks of further fraud and error due to the pressure on the benefits system because of the current economic downturn.”

Notes for Editors: 

1. Press notices and reports are available from the date of publication on the NAO website, which is at http://www.nao.org.uk/.  Hard copies can be obtained from The Stationery Office on 0845 702 3474.
   
2. The Comptroller and Auditor General, Amyas Morse, is the head of the National Audit Office which employs some 900 staff.  He and the NAO are totally independent of Government.  He certifies the accounts of all Government departments and a wide range of other public sector bodies; and he has statutory authority to report to Parliament on the economy, efficiency and effectiveness with which departments and other bodies have used their resources.