Anti-fraud schemes 'too costly'

Benefit fraud is thought to have been halved to £800m a year

The government spends more on tracking benefit fraud than it manages to uncover, an official report suggests.

The National Audit Office found that £154m spent on Department for Work and Pensions schemes in 2006/07 had found just £106m of fraudulent claims.

"The department is spending £1.50 to identify every £1 of overpayments," the report suggested.

The NAO said the DWP "could do more" to be cost-effective. The DWP said it was "determined" to reduce benefit fraud.

The NAO found the department had cut estimated benefit fraud from £2bn to £800m a year since 2000.

Good progress

But it looked at the cost-effectiveness of six current counter-fraud initiatives.

The report said £1.50 was being spent to find every £1 that had been wrongly paid, but added: "This does not mean that these activities are not worth continuing with but does provide the department with a baseline by which further improvements can be measured."

I believe the department could do more to determine whether its activities are cost effective Sir John Bourn National Audit Office

Sir John Bourn, head of the NAO, said: "The Department for Work and Pensions has made tackling benefit fraud a priority and has made good progress in reducing fraud, which represents a substantial achievement by its staff.

"It is also ahead of other comparable countries in its measurement and understanding of benefit fraud."

'Part-time minister'

He added: "Although some of the department's initiatives lead to earlier interception of overpayments and may deter potential fraudsters, I believe the department could do more to determine whether its activities are cost effective."

For the Conservatives, shadow work and pensions secretary Chris Grayling said: "It doesn't surprise me that Peter Hain's department is spending £1.50 to save £1.

"I fear this is more evidence of the Department for Work and Pensions suffering from a distracted part-time secretary of state."

Mr Hain said: "We have had great success in cutting benefit fraud by more than half since 2000, as the NAO has recognised today, but we know that thieves are intent on stealing money from those most in need."

He added: "We are determined to stop this disgraceful and shameless theft."