The Department for Work and Pensions (DWP) has been blasted by MPs for failing to tackle housing benefit fraud and error, as overpayments rise to £1.4bn.
A report from the Public Accounts Committee (PAC) today warned that £12.6bn had been overpaid in housing benefit since 2000/01, despite repeated calls for improvement.
The last financial year saw overpayment of housing benefit grow to £1.4bn, rising from £980m in 2010/11. Some £900m of last year’s spending was due to claimant error, £340m claimant fraud and £150m was official error.
PAC chair Margaret Hodge said that even after recoveries by local authorities, this marked ‘a huge cost to the taxpayer’.
Concern was also raised that the DWP was ‘not doing anything’ to target underpayment of housing benefit, which Hodge warned creates ‘hardship difficulties for claimants who miss out’.
Reductions to funding for councils have seen town halls cut back on work to identify fraud, error and underpayment, while local authority incentives to tackle fraud are ‘not good enough’ – Hodge added.
‘These weak incentives are exacerbated by pressures on local authority funding, including a 17% reduction since 2010–11 in the funding available for administering housing benefit,’ she said.
‘The Department should produce a proposal for how to strengthen incentives so that local authorities tackle housing benefit fraud and error more effectively.’
A DWP spokesman said: ‘Money lost through fraud and error is falling overall and we are recovering more of it than before 2010 – recouping £1.3bn last year. But we want to do more to make sure this money goes to those who need it most, which is why we’re incentivising local authorities to identify overpayments and bring fraudsters to justice.
‘At the end of last year we brought in a new detection system that will cross-check all housing benefit claims against up-to-the-minute information on earnings and pension income. And we expect the on-going introduction of Universal Credit to cut fraud and error by a further £1.5bn.’
