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The Department must do more to get to grips with tackling Housing Benefit fraud and error. In 2013-14 overpayments were £1.4 billion and underpayments were £0.4 billion. In 2013-14 overpayments increased to 5.8% of Housing Benefit spending, the highest rate of the Department's benefits, and represented 42% of total overpayments across all benefits. Even after recoveries by local authorities, this is a huge cost to taxpayers. Underpayments also create difficulties for claimants who miss out on payments. The Department has made little progress in reducing fraud and error despite repeated calls by this Committee over the last 16 years for the Department to improve its management of the problem. It has now begun to use HM Revenue & Customs' real time information on earnings which should help it address the largest area of overpayments when the Department eventually rolls out Universal Credit but the timeframe for that remains uncertain. The Department needs to take action now to strengthen incentives for local authorities to tackle claimant error and fraud, develop a clearer understanding of fraud and error at the local level and target major areas of loss.
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