NI benefit fraud costs £120m

Most money was lost from disability funds

Benefit fraud and error in Northern Ireland is costing the taxpayer £120.9m, according to a report.

Estimated levels of fraud and mistakes in income support, jobseekers' allowance and housing benefit during 2002-3 were "unacceptably high", it said.

The report, by the Northern Ireland Audit Office, on the accounts of government departments and other public bodies, revealed disability allowance mistakes by staff and the public amounted to £43.6m.

In the report, published on Friday, the public spending watchdog estimated that levels of fraud and error in income support was £37.5m, in housing benefit was £27.9m and jobseekers' allowance was £11.9m.

Department of Social Development officials reduced income support and jobseekers' allowance fraud to £13.1m by March 2003.

However, the Comptroller and Auditor General said while this drop was encouraging, £13.1m was still "unacceptable."

New businesses

"The department has advised me that greater consistency has been achieved by the agency across social security districts due to management restructuring and more experienced staff," the report said.

"This and the programme of interventions has led to improved performance in this area.

"In my view, the agency must continue to make every effort to identify and prevent social security fraud and error."

Meanwhile, the Northern Ireland Audit Office has criticised the former small business agency, Ledu, for the way it monitored a fund to help finance new businesses.

It said the investigation into the Emerging Business Trust was continuing, but described as "significant" the issues that were currently being explored.

Since last year, an investigation has been under way into almost 30 economic development organisations that were part funded by the former small business agency Ledu.

The Emerging Business Trust runs two funds used to make investments in fledgling companies.

The Northern Ireland Audit Office said that while the investigation had not yet been finished, "major weaknesses" in Ledu's oversight had been identified.

It said the probe centred on "significant issues regarding the governance and regularity of the funds - including the handling of potential conflicts of interest."

A further report is expected when inquiry has been completed.

A spokesman for Invest NI which has taken over the role of Ledu said they take these issues seriously and that new procedures had now been introduced.