DWP urged to clarify responsibilities for tackling housing benefit fraud and error

The Department for Work & Pensions has “not established sufficiently clearly how the responsibilities for tackling [housing benefit] fraud and error are divided between it and local authorities”, the National Audit Office has claimed.

In a report, Housing Benefit fraud and error, the NAO revealed that the total level of overpayment had increased to an estimated £1.4bn in 2013/14 from £980m in 2010/11.

Claimant error remained the main cause of overpayments at £900m in 2013/14, while fraud accounted for £340m.

The NAO criticised the DWP, saying it should have focused on fraud and error sooner. The Department had “relied too heavily on the incentives in the subsidy process (when local authorities reclaim payments) and the valuable, but limited, data sharing and matching it provides”.

The DWP’s management of housing benefit fraud and error had not provided value for money over the last few years, it concluded.

The report set out how the funding to support local authorities’ administration of claims related to housing benefit fell by 17% between 2010-11 and 2013-14. However, at the same time, the number of people claiming the benefit increased by 5%.

The NAO called on the Department to show it had addressed issues such as targeting interventions more on major areas of loss and exploiting data to identify riskier claims and strengthen decision-making.

It warned that the impact of changes being introduced by the DWP – including the introduction of a single fraud investigation service, and, in the longer term, the centralisation of the administration of working age housing benefit claims as part of Universal Credit – remained uncertain.

The report called for the DWP to set out clearer responsibilities for reducing fraud and error.

Amyas Morse, head of the National Audit Office said: “Housing Benefit is a difficult benefit to administer and, against a background of unclear responsibilities and limited investment, it is unsurprising that total overpayments have increased.

“The Department for Work & Pensions is facing an escalating problem. The DWP has recognised the need to do more and has been developing a new strategy. As these initiatives are in the early stages, it is too early to know whether they are working. However, the Department will need to show that it is tackling problems with local authority incentives and targeting major areas of loss.”