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Thursday, 13 February, 2003, 08:52 GMT
Anti-fraud efforts 'losing ground'
Post Office
Fraud costs 2bn a year in the UK
Benefit fraud is costing taxpayers an estimated two billion pounds a year, according to new figures from the National Audit Office (NAO).

And efforts to tackle the problem may be hampered because fewer cases are being investigated, the NAO warns.

Fraud and error in jobseekers' allowance and income support fell by a quarter between 1997/8 and 2002, according to the report.

But it also notes that the number of cases investigated dropped by 12% between 2001 and 2002.

The Department of Work and Pensions says it is beginning to win the battle against fraud, but an MPs' spending watchdog fears it may be "losing ground".

The department does not have up-to-date measurements of the amount of fraud

Edward Leigh
Commons public accounts committee

The NAO report suggests the number of cases investigated has partly fallen because regional benefits offices are only interested in examining cases based on better intelligence.

It says: "The reduction in checks and investigations may jeopardise further progress towards the department's target to reduce losses from fraud and error."

High risk areas

Edward Leigh, chairman of the Commons public accounts committee, noted that the loss in income support and jobseekers' allowance had gone down.

"What causes me concern is that in some respects the department may be losing ground," said Conservative MP Mr Leigh.

"The amount of fraud investigation activity and the value of overall fraud detected are actually going down.

We are by no means complacent

Department of Work and Pensions
"And the number of higher risk benefit claims subject to extra checks has fallen by no less than a fifth in a year."

Mr Leigh argued it was essential to tackle fraud and error in the worst hit areas of benefits - income support and jobseekers' allowance.

He continued: "That is only part of the picture. The department does not have up-to-date measurements of the amount of fraud being carried out against a whole range of other benefits.

"Some benefits have not been looked at for nearly six years."

The government aims to cut housing benefit fraud by a quarter by 2006, but the NAO says it will not have an accurate estimate of the amount of fraud until late this year.

Key savings

Criminals use forged birth certificates or passports, as well as dead people's national insurance numbers, to create false identities.

One suspect was found to have 20 separate identities, for example.

In a statement, the Department for Work and Pensions said: "We are starting to win the war against fraud and error. This NAO report recognises the progress that we have made."

Fraud reductions since 1998 had saved 230m - the equivalent of 7,400 new nurses or 7,350 new teachers, it said.

The statement continued: "We are by no means complacent and that's why we have reorganised the way staff tackle benefit fraud, providing a more professional and intelligence-driven investigation service.

"We've recently given investigators new powers and set ourselves tough new targets to tackle housing benefit fraud."

See also:

07 Feb 03 | Business
29 Aug 02 | Politics
02 Jan 03 | Politics
11 Sep 02 | Politics
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