Benefit errors run up £2.7bn cost

The DWP is showing 'determination to improve', the NAO said

The Department for Work and Pensions lost an estimated £2.7bn of benefits payments to fraud and errors last year, a National Audit Office report says.

NAO head Sir John Bourn said he was "qualifying" the DWP's accounts for the 17th year in a row, as a result.

The DWP said it was making progress in overcoming the problem.

But Tory MP Edward Leigh, chairman of the Commons public accounts committee, said "almost unimaginable" sums of money were being wasted.

"If this seems like an annual event, that is because it is exactly that," he said.

Long-standing problems

But Sir John said the DWP was showing a "clear determination to resolve these long-standing problems".

He added: "It is always encouraging to see such progress, but the scale of the challenge ahead remains considerable.

"The fact is that, in 2005-06, an estimated £2.7bn was paid out to people who weren't entitled to the money."

Work and Pensions Minister James Plaskitt said fraud losses had fallen from about £2bn in 2001 to an estimated £0.8bn in 2005-06.

He also said: "We are greatly encouraged that the NAO have recognised the progress we've already made and acknowledged our determination to further minimise losses due to fraud and error."

The money lost accounted for 2.2% of the department's total budget of £124.2bn in 2005-06.

A public accounts committee report published last week said 21 million calls to help lines run by the DWP had gone unanswered in 2004-05 - 44% of all those made.