Benefit fraudsters cost Hartlepool taxpayers more than £400,000 last year.
That is how much people illegally claimed from the council and the Department of Work and Pensions.
In 2013-14 the council’s Benefits Investigations Team investigated 511 cases of benefit fraud which resulted in overpayments of £418,000.
Eight people were taken to court, seven were fined and 28 offenders were cautioned.
> So lets see… 511 investgations, 8 taken to court. Mathematics was never my strong point, but isn’t that something like only 1.6% of the investigations were actually taken to court ?
Another way to put it would be 503 people out of 511 – 98.4% – investigated were NOT taken to court.
Even if you subtract those 28 who were cautioned (what for ? Nothing they could be taken to court for, evidently) that’s still 475 out of 511 who appear to be innocent.
It covered money that claimants were not entitled to for help with housing and council tax.
The fraudulent claims resulted from a mix of sources such as tip-offs from the public, and irregularities noticed by benefit assessment staff and in computer systems.
> 475 out of 511 innocent. How many of those tip-offs from the public were malicious ? How many of those irregularities noticed by benefit assessment staff and in computer systems were actually errors by the staff ?
But council leader Christopher Akers-Belcher said the figure represents a tiny fraction of the millions paid out in benefits by the council and the authority does everything it can to reclaim the cash.
John Morton, the council’s assistant chief finance officer, added:
“The council is committed to supporting vulnerable households across welfare benefits they are entitled to receive.
“Equally, the council is committed to preventing fraudulent claims and protecting public resources.”
Coun Akers-Belcher added:
“In the grand scheme of things the council pays out around £50million in housing and council tax benefit over the year.
“As an authority we collect over 99 per cent of council tax. The overpayments are not written off.
“If an absconder leaves the system and they reappear the money they owe is written back in.
“It is never completely written off.”
From July 1, the Department Work and Pensions (DWP) will investigate housing and council tax benefit fraud through the new Single Fraud Investigation Service (SFIS).
The DWP has approached the council about identifying benefit investigation staff to transfer to the new national service.
But the council has refused to transfer its two investigation officers because the SFIS will not probe abuses of the Local Council Tax Support Scheme.
The scheme sees the council pays out £11.7million a year to 14,500 people to limit cuts to their council tax benefits.
Mr Morton said:
“It would create a risk of criticism to the reputation of the council and potentially lead to an increase in attempted fraud activity against the council tax support scheme.”
Coun Akers-Belcher added:
“It is really important to keep a counter fraud presence in our own establishment rather than rely on the DWP to deliver services.
“We would also be reneging on our responsibilities under the Local Government Act.”
In another DWP scheme, the council will be financially rewarded for helping to reduce housing benefit fraud as part of the Fraud and Error Reduction Incentive Scheme.
> I’m suprised they’re not offering cash incentives for tip offs from the public as well… grass up your neighbour and win money.
Several years ago I was investigated because apparently someone tipped the dole off that I was working while claiming. And to be fair I was – I was working on a New Deal scheme ! Collapse of case.
I never did find out who the malicious informer was, though.
It will be up to the council, which will receive £14,000 start-up funding, how it goes about uncovering fraud and errors by claimants.
But Fens and Rossmere Labour Councillor Alan Clark said there was a misconception among the public how much benefit fraudsters cost the country compared to big business tax evaders.
> A misconception carefully fostered by the DWP, politicians and sections of the media.
“I read that there are 400 tax inspectors going after tax evaders and 14,000 going after people committing benefit fraud,” he said.
“I think that is the wrong way around.”
Source – Hartlepool Mail, 02 Feb 2015
It remains uncertain how DWP will manage the housing costs element of Universal Credit without increased risks of fraud and error, warns a Work and Pensions Committee report.
The Government has stated that an IT system (the Integrated Risk and Intelligence Service (IRIS)) will allow it to cross-check data and provide similar safeguards against fraudulent claims under Universal Credit as are currently operated by local authorities within the Housing Benefit system.
Commenting on the report, the Chair of the Work and Pensions Committee, Dame Anne Begg MP, said:
“Through the use of RTI—real-time information on PAYE earnings—Universal Credit has the potential over the longer term to substantially reduce fraud and error in the benefits system. However, this could be seriously undermined because of the uncertainty about how DWP will administer the housing element of Universal Credit without increased risks of fraud and error.
Under the current housing benefit system, local authorities can cross-check claims across a range of data relating to other council services. Unless DWP is able to cross-check Universal Credit claims in a similar way it may be less effective in tackling fraud and error.
It is vital that a fully developed and tested IT system, which allows DWP to cross-check data, is in place before Universal Credit is implemented on a national scale. Worryingly, it appears that there is no automated system in use in the Pathfinders and is not clear when or how a system will be available.”
> It appears that UC has been developed on the basis of “we dont know how to do something, but we hope we might stumble across a solution before the system is due to go nationwide.”
The official estimated benefit fraud rate is 0.7% of total benefits expenditure. The general public’s misperception is that it is some 34 times higher. To reduce the risk of confusion or conflation in media reporting, DWP should publish statistics relating to the estimated level of benefit fraud on a separate day from those related to error in the benefits system.
> Trouble is, neither the DWP or elements of the media have any interest in presenting the true picture. They want to encourage the skivers image.
Dame Anne Begg MP said:
“Statistics relating to benefit fraud are often conflated in media reporting with those relating to error; and people’s perceptions of the level of benefit fraud are completely out of kilter with the official estimate. This is not helped by the Government publishing all of the statistics simultaneously. Whilst we understand that the boundary between claimant error and fraud is not always clear, we believe that publishing separate summaries of estimated fraud and error rates would be helpful.”
On progress towards fraud and error reduction targets
Fraud and error rates have plateaued from 2005/06 to 2012/13, despite an “uncompromising” and “zero tolerance” approach announced by the coalition Government. DWP will only meet the target set in 2010, to reduce the estimated overpayment rate to no more than 1.7% by April 2015, if it employs innovative approaches which are aligned with the known risk factors associated with each benefit.
Dame Anne Begg MP said:
“Despite DWP devoting considerable effort and resources to fraud and error reduction, rates have hardly changed since 2005/06 and estimated overpayments remain at around 2% of total benefit expenditure. If the ambitious target is to be met, innovative approaches are needed, not more of the same.”
On innovative ways of tackling fraud and error
DWP and HMRC should explore, with the Payments Council and the banking sector, the feasibility of establishing a system which flags up potentially incorrect benefits and Tax Credits payments, using data held by payments systems operators and banks on the types of payments due to enter individual bank accounts.
In the longer term biometric identity systems could have an important role to play in identity verification processes across government. The Cabinet Office is working on a government-wide system; the Government should evaluate the benefits of biometric identity verification in the social security system and more widely across public services.
Dame Anne Begg MP said:
“DWP should adopt a secure and consistent approach to public and private sector data-sharing. This should include exploring the feasibility of a system that uses data held by banks and payment system operators to identify potentially incorrect benefit payments.
The Government should also carefully consider innovative identity verification technology, such as the voice-recognition system now used in Australian public services.”
On the implementation of the Single Fraud Investigation Service (SFIS)
The Committee recommends that SFIS, a DWP-run service which will investigate all social security benefit fraud across DWP, HMRC and local authorities, be implemented, as far as is practicable, in line with the roll out of Universal Credit. The Government’s current timetable for SFIS implementation would see responsibility for Housing Benefit fraud investigations transfer from local authorities to DWP before the Department plans to take responsibility for housing costs support under Universal Credit across the country.
Dame Anne Begg MP said:
“SFIS is, in principle, a good idea but it makes no sense to rush its implementation, ahead of the roll out of Universal Credit. As far as possible SFIS and Universal Credit implementation should be aligned, otherwise there could be increased risks of fraud in relation to housing costs support. The Government also needs to pause to allow negotiations with local government and the relevant trade unions about the transfer of staff into DWP.”
Source – Welfare News Service, 15 May 2014