Friday, February 02, 2007

Update On DWP Losses

DWP's estimated losses on benefit payments

The Department of Work and Pensions has just published updated estimates of its losses to fraud and error in benefit payments. The headlines are:

  • £2.6bn total estimated losses in 2005-06 - 2.2% of the roughly £120bn pa paid out
  • 61% of the losses come from 27% of the benefits- the main culprits are Housing Benefit, Income Support, Jobseekers Allowance, and Pension Credit
  • £770m lost in Housing Benefit - at 5.5% of total HB payments, this is the worst record of any benefit, and among those of working age it's running at 6.9%
  • Most of the problems are with working age benefits: losses on state pension payments are reckoned to be running at only 0.1%, and on pensioners Housing Benefit at "only" 2.7%; against that, losses on Gordo's notorious Pension Credit are running at 4.1% (= £270m pa)

Even at £2.6bn the loss figure is almost certainly wildly understated. Many of the benefits are not subject to regular monitoring, and the estimated 1.7% loss on £6.6bn of Incapacity Benefit spending takes no account of the wholesale lead-swinging we are all so familiar with.

No wonder the DWP's accounts have been qualified 17 years in succession.

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