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4 Dec 2017

Benefit fraud surges by £200m in a year as record levels swallow up £2.1 billion of department's budget

Benefit fraud has reached record levels after it rose by £200 million in the space of a year, the DWP has admitted.

Fraud swallowed up almost £2.1 billion of the department’s total budget of £174 billion – the equivalent of £40 million per week.

It means that the DWP now loses almost twice as much money to fraud as the entire budget of the Foreign Office, which is £1.1 billion per year. MPs said David Gauke, the Work and Pensions Secretary, now had “questions to answer” over why the figures have gone up despite repeated assurances that they would be brought under control.

Figures released by the DWP show that in 2016/17 the total amount of money lost to “overpayments” – which counts both fraud and errors by staff – stood at £3.6 billion, up £300 million from the previous year.

Around £1.1 billion of that money was recovered, meaning net losses stood at £2.5 billion. Fraud accounted for 1.2% of the entire DWP budget, compared with 1.1% the previous year, largely because housing benefit fraud was at its highest ever level of 4.5%.


The new Universal Credit system was also targeted by fraudsters, with £50 million lost. Another £40 million was lost to errors by staff and claimants. The DWP claimed part of the reason fraud had gone up was because of better methods of gathering information on it, but a spokesman admitted that did not explain the overall increase in overpayments.

Frank Field, the  Labour MP and chairman of the work and pensions select committee, said: “David Gauke has got some questions to answer about this. After the Chancellor, the Secretary of State for Work and Pensions has arguably the most important job in Government because of the size of the department’s budget. The Government is losing huge amounts of money at the same time as it is making a mess of the roll-out of Universal Credit.”

A DWP spokesman said: “We have brought in reforms to improve detection, prevention and recovery and our fraud investigators work tirelessly to bring criminals to justice. Last year we prosecuted around 5,000 fraudsters and issued around 6,000 administrative penalties and recovered a record £1.1  billion in overpaid benefits. Meanwhile, Universal Credit will reduce fraud and error by £1.5 billion when it is fully rolled out.”

In September, Judge Nicholas Dean QC criticised the DWP for failing to tackle benefits cheats and said that people should be forced to pay back money sooner.

And that's just what they admit to - they don't go looking!

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