£3.3bn bill for fraud and error on benefits

The figure, for 2013-14, equates to two per cent of the total forecast benefit expenditure of £163.9bn.

Amyas Morse, the Comptroller and Auditor General, announced he could not sign off the accounts of the Department for Work and Pensions (DWP) because of the level of fraud and error.

He has qualified his audit opinion, a move which has been made every year since 1988-89.

The figure of £3.3bn is slightly down on the £3.5bn of the previous year, which was mainly caused by the removal of council tax benefit from the estimated total.

The National Audit Office (NAO) said in yesterday’s report that the DWP needed to understand how and why overpayments arose in individual benefits so it could develop effective ways of reducing fraud and error.

Mr Morse said: “Issuing an audit qualification is a serious matter, and the fact that similar qualifications have been in place for such a long period of time does not lessen that seriousness.

“I consider that the overall value of fraud and error in benefit expenditure remains unacceptably high, and the qualification of my audit opinion reflects that.”

He said he recognised the challenges involved in reducing fraud and error and the NAO was working with the DWP to evaluate the adequacy of its response to fraud and error.

A DWP spokesman said: “We are absolutely committed to doing all we can to reduce the level of fraud and error in the benefit system. The fact is fraud and error is now proportionately lower than before the start of the Parliament and we are recovering more money than ever.”