Chancellor exaggerates welfare fraud
In his statement on the Spending Review George Osborne said that he wasn’t going to tolerate social security fraud any more. He said
We estimate that £5 billion is being lost this way each year.
This is a huge increase from the level of fraud the Department for Work and Pensions was estimating just three months ago. In July, the National Audit Office published a note on Fraud and error in benefit expenditure, arising from their audit of the Department for Work and Pensions’ accounts. They reported that the DWP told them that “overpayments due to fraud and error in 2009-10 are estimated at £3.1 billion” (my emphasis.)
But even this figure would have been an over-statement. As the NAO goes on to report, £1.1 billion of this figure was due to official error and the same amount to customer error. The DWP estimate of the amount of fraud overpayments was £1 billion – one fifth of the amount claimed by Mr Osborne.
The Chancellor must have got his data from the DWP – what has happened in the last three months to quintuple the estimated level of fraud?