Wednesday, November 04, 2009

Update On Welfare Fraud

The same old picture

The Department for Work and Pensions has just slipped out its annual estimate of welfare fraud (summary table above). Overall, it reckons overpayment due to fraud and error is now running at around £3bn pa, or 2.2% of benefits paid - an increase on last year's 2%.

That's bad enough, but as we've blogged before, some benefits are much more prone to fraud than the overall total suggests.

For example, Housing Benefit (annual cost £17bn) has a fraud and error rate of around 5%. And despite constant assurances of a crack-down, there has been virtually no improvement over time:

When we last had a good look at Housing Benefit, we discovered a highly expensive shambles, with the Simple Shopper paying way over the odds to canny private landlords.

And this week's revelation that in some areas an extraordinary 40% of households are now in receipt of housing benefit makes us even more concerned. When taxpayers are subsidising that much of the private rental market, rents are inevitably being inflated way beyond their true level. No wonder it's costing us so much.

Given our dire financial straits, the entire welfare system is heading for a serious pruning. A big reduction in fraud losses should be one of the benefits.

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