Social Security Benefit Fraud and Error

An estimated £60 million of the £3.5 billion social security benefits paid in 2006-07 was overpaid as a result of fraud and error according to a report published today by John Dowdall, the Comptroller and Auditor General for Northern Ireland. While tackling benefit fraud and error is one of the Social Security Agency’s priorities, the Auditor General’s report found that Agency faces a number of challenges, including the complexity of the benefit system, the need to implement efficiency savings and public complacency towards benefit fraud.

Main findings

According to today’s report, the Agency has put in place a range of measures to improve accuracy in processing benefits and investigate suspected fraud. The report however, identifies some important lessons for the Agency. These include the need for more robust performance measurement and evaluation of its activities aimed at tackling fraud and error. On the specific work of the Agency, the report found that:

Management of Programme Protection Activity could be strengthened

Over the six years to March 2007, the Agency spent £21.8 million on programme protection activity to tackle error in Income Support and Jobseekers Allowance. However, the Audit Office found a wide variation in the performance of the six districts into which the network of local offices are split and concludes that resources may not have been applied as effectively as possible. For example,
between 2001 and 2006, 21 per cent of the programme protection activity for which funding was provided did not take place. This resulted in 76,000 cases not being reviewed. The Audit Office estimates that, had these cases been reviewed, the Agency could have prevented nearly £6 million from being incorrectly paid and would have detected a further £2.7 million which had been paid in error.

The Agency has experienced difficulties in keeping pace with increasing level of fraud referrals

The number of suspected frauds increased from 8,400 in 2002-03 to 13,600 in 2006-07. However, the number of investigations carried out by the Agency has not kept pace with this increase. At 31 March 2007 there were 11,200 cases being investigated or awaiting investigation compared with 5,800 at April 2002. Despite a number of recruitment competitions over this period, the Agency only achieved its full complement of investigators in 2006-07.

The Audit Office also found that the Agency has broadly met its targets for the number and outcome of benefit investigations and taken steps to implement the recommendations from a Criminal Justice Inspectorate review in 2006. The report recommends however, the introduction of a range of performance measures to complement existing targets and provide better information to assess and evaluate the management and processing of fraud referrals.

The Agency could achieve further successful outcomes from its fraud investigation activity

An Audit Office survey of the Agency benefit staff found the vast majority aware of the Agency’s fraud strategy. However, 25 per cent of respondents had not received fraud awareness training and approximately 50 per cent were not confident that suspected fraud was fully investigated.

The report records that over the 4 years to March 2007, 5,600 of the cases investigated by the Agency involved fraud of which 3,000 did not result in a sanction i.e. formal caution, administrative penalty or prosecution. Although the majority were closed in line with the Agency’s policy, approximately 600 cases did not result in a sanction because of procedural errors or oversights by the Agency. The Audit Office found however, that where cases reach court, the Agency has achieved a conviction rate of 97 per cent (770 convictions in the 4 years to March 2007); a further 250 cases sent for prosecution were withdrawn. The report also records that the Agency has worked successfully with the Assets Recovery Agency to recover overpayments of benefit resulting from fraudulent claims.