Fraudulent claims for benefit

£1 Bn Annual Cost of Housing Benefit Fraud

A joint investigation by the National Audit Office and the Audit Commission estimated that almost £1 in every £10 paid out in housing benefit was paid incorrectly. The biggest problem is said to be private sector landlords claiming for tenants who don't exist.

The Audit Commission Controller Andrew Foster said the scale of the fraud was a matter of "great concern" while the head of the NAO, Comptroller and Auditor General Sir John Bourn described it as a "significant drain" on public funds.

Drain on social services

"The scale of fraud and error in the system is of great concern," said Mr Foster. "Those who are entitled to housing benefit should get what is due to them but we must stop dishonest claimants and landlords plundering the public purse."

Housing benefit is currently paid out to 4.8 million claimants at an annual cost of £11.1 billion of which £905 million is claimed fraudulently.

The NAO and Audit Commission blamed poor cooperation between the Benefits Agency and local councils and over-complicated benefit rules for much of the problem.

They acknowledged that both central and local government have done much to combat fraud, with councils employing more investigators, and that the amount of fraud detected has risen significantly.

But the two agencies want central and local government to work together more closely to stop abuses of housing benefit.

They want councils needed to put in place counter-fraud strategies and promote awareness of the problem among staff. They were also urged to improve their systems for distributing housing benefit.

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