Supplementary memorandum submitted by
the Department of Work and Pensions
Question 102 (Mr Jenkins): How many actions have
you taken under the Proceeds of Crime Act (POCA)?
In the financial year 2004-05 DWP secured recovery
in 81 cases under POCA totalling £2,425,871.91. This amount
is made up of cases where confiscation, compensation, voluntary
repayments, forfeiture or costs have been made or ordered. (With
confiscation orders the time to pay can normally be set anything
from six months to 18 months.) Data for Housing Benefit prosecutions
is not available as Local Authorities do not record the power
under which a conviction is secured.
Question 105 (Mr Jenkins): Can you give the prosecution
rate, the fraud rate and the amount you get back through the process
of fines?
The last full year's worth of data that we hold covers
the financial year 2003-04.
PROSECUTION RATE
In 2003-04 Local Authorities applied 8,695 administrative
penalties and cautions for benefits fraud, compared to the 2,600
recorded in 2001-02. In addition, Local Authorities secured 3,747
successful prosecutions for benefits fraud in 2003-04, compared
to the 1,732 recorded in 2001-02.
In total these 12,442 sanctions or prosecutions amounted
to around 8% of the 163,000 investigations of benefits fraud carried
out by Local Authorities in 2003-04. This compares to an equivalent
rate of around 2% in 2001-02.
FRAUD RATE
The latest estimate of the rate of fraud and error
in Housing Benefit (Fraud and Error in Housing Benefit—April
2002 to March 2004) was published under National Statistics
on 24 February 2005. The key findings are that:
— around £500 million (4.7%)
of Housing Benefit expenditure within the scope of the Housing
Benefit Review sample is estimated to have been overpaid due to
fraud and error;
— by using a rough extrapolation,
a further £100 million is estimated to have been overpaid
in the Housing Benefit expenditure outside the scope of the Housing
Benefit Review sample; and
— this gives an estimate of £600
million (4.9%) for total overpaid expenditure in Housing Benefit.
These results represent the first full year of data
beyond our baseline estimates for 2002-03 (when we began our continuous
measurement of Housing Benefit fraud and error). The un-rounded
reduction in Housing Benefit fraud and error over this period
was estimated to be £60 million.
AMOUNTS RECOVERED
Local Authorities recovered £320 million of
overpaid Housing Benefit expenditure in 2003-04.
Question 113 (Mr Davidson): Are you actually comparing
yourselves with anybody? Do you do any benchmarking?
Benchmarking DWP's performance in containing and
reducing losses in the benefit system arising from fraud and error
is not straightforward, because there are no direct comparators.
But the Department is pursuing the issue with a number of finance
sector organisations and aims over time to produce a broad assessment
of the position as far as comparability allows.
Question 115 (Mr Davidson): In the 2000 Report
we noted that errors were much more likely in London and the South
East because of high turnover of staff and so on. Is that still
the position?
Relative comparison between London, South
East and national average MVFE—PSA estimates—%
| | 2001-02
| | 2002-03
| | 2003-04 |
| London | SE
| National | London
| SENational
London
SE
National
|
| Fraud | 6.1 | 5.7
| 4.8 | 5.0 | 5.9
| 4.5 | 3.2 | 5.7
| 3.1 |
| Customer Error | 1.4 | 0.7
| 1.0 | 0.9 | 1.0
| 0.9 | 1.4 | 1.4
| 1.2 |
| Offical Error | 2.4 | 1.9
| 1.8 | 3.1 | 2.4
| 1.9 | 2.7 | 2.9
| 2.2 |
| Total | 9.9 | 8.4
| 7.6 | 8.9 | 9.3
| 7.3 | 7.2 | 9.9
| 6.4 |
| | |
| | | |
| | |
Note: A data quality adjustment in 2003-04 creates some
difficulties in comparing the individual components of fraud,
customer error and official error over time.
These results indicate that:
— Further improvement has been made in the London
region.
— Overpayments in South East region have increased
Relative comparison between London, South East and
national average MVFE—PSA estimates—by share of monetary
loss (overpayments) (£m) and percentage of the total loss
| | 2002-03 |
| | |
| | 2003-04 |
| | |
| London |
SE | National
| London | SE
| National |
| £m | %
| £m | % |
£m | £m |
% | £m | %
| £m |
| Fraud | 116 | 20
| 68 | 12 | 570
| 77 | 19 | 68 |
17 | 400 |
| Customer Error | 20 |
18 | 11 | 10 |
110 | 33 | 21 |
16 | 10 | 160 |
| Official Error | 71 |
28 | 28 | 11 |
250 | 65 | 22 |
35 | 12 | 290 |
| Total | 208 | 23
| 107 | 12 | 920
| 174 | 21 | 119
| 14 | 840 |
| | |
| | | |
| | | |
— The share of total national overpayments was
similar in 2002-03 and 2003-04 for both London and the South East.
— During the same period the South East region
did not receive the extra help that was being put into London.
Their share of fraud overpayments increased and London's share
of official error decreased.
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