Wednesday, May 21, 2008

DWP Still Losing Billions

Haemorrhage continues

Another update while we were away - the latest estimate on how much DWP is currently losing to fraud and error. Key points:
  • £2.7bn pa total loss - so despite all those promises of serious action, the total has increased again (see this blog); it still represents over 2% of total DWP payments.
  • 60% of losses come on 27% of benefits- as last year, the leakiest benefits are Income Support, JobSeekers Allowance, Pension Credit, and Housing Benefit.
  • Income Support and Pension Credit are worst - Gordo's fearsomely complex credits are notoriously difficult to fathom, even for DWP officials; losses are running in excess of 5%

DWP's accounts have now been qualified for the eighteenth straight year. If it was a business it would have been closed down and the directors jailed.

Instead, as part of our crass bumbling government, it's been set some extraordinarily modest targets for reducing its losses. But guess what - it has completely failed to do so. For example, far from hitting their 15% target reduction for IS and JSA, losses have actually increased.

The only sure way of cutting these losses is to simplify the benefits system massively. There's no way Brown will do that, and Cameron's government will be faced with the tricky issue of losers. Because as we've just seen with the 10p tax rate, absent a big pot of money falling from the sky, any changes to tax and benefit structures is going to mean losers.

You sure wouldn't start from here.

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