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£80m: The cost in just one year of false benefit claims and clerical errors

By Adrian Rutherford

Published 24/11/2015

Auditor General Kieran Donnelly
Auditor General Kieran Donnelly

Fraud and error in Northern Ireland's benefits system is costing taxpayers more than £1m every week, a report has revealed.

More than £80m was wrongly paid out in the last 12 months - the highest for eight years.

Overpayments jumped by more than 12% compared to the previous year. The details are disclosed in a report by the Northern Ireland Audit Office examining the accounts of central Government bodies.

In total, 18 of 134 accounts examined by Auditor General Kieran Donnelly were qualified, meaning concerns were identified. His report draws attention to "significant" levels of fraud and error in our benefits system.

Total spending on benefits by the Department for Social Development in the 12 months to April was £5.7bin - up £200m on last year. Overpayments due to fraud and error totalled £81.1m - up from £71.9m last year.

Mr Donnelly's report states: "The estimated levels of customer fraud have increased significantly in the benefit payments made by the Social Security Agency, Northern Ireland Housing Executive and Land and Property Services in the current year.

"Total fraud and error in benefit expenditure is now at its highest level since 2007."

Overpayments in housing benefit due to customer fraud stood at £17.1m - up 46% on the previous year.

The findings emerged a week after the Stormont Agreement and Implementation Plan, which included a £125m commitment over five years to address fraud and error in the welfare system.

Errors also resulted in underpayments of £25.1m across the benefits system. Separately, the Department for Regional Development was criticised for an unauthorised £12.9m overspend.

It had anticipated £20m would be secured from Belfast Harbour Commissioners in both 2013/14 and 2014/15, but this never materialised.

As a result DRD faced a shortfall of £20m in both years.

The Executive had allocated £20m to plug the gap in 2013/14, but not last year.

A ministerial direction last December instructed DRD's permanent secretary to continue to fund winter service, road maintenance and essential travel, and maintain the NI Water budget. Concerns were also raised over the Legal Services Commission's accounts.

There was insufficient evidence to support the eligibility of certain legal aid applications and payments to legal practitioners.

The commission has since been replaced by the Legal Services Agency.

Errors with the NI Social Fund also increased significantly, with £2m of the £86.5m total expenditure queried.

And concerns were raised about pension arrangements at the Youth Justice Agency, which involved pension contributions of around £3.2m.

However, Mr Donnelly said that overall standards of financial accounting in Northern Ireland remain high. "I am responsible for forming an audit opinion on 134 central Government accounts," he said.

"My report outlines that the vast majority of opinions were clean, but I have qualified my opinion on 18 occasions and my report provides details.

"This represents an improvement from the position I reported on last year. Many of the qualified audit opinions result from failures to comply with instructions from governing authorities, including the Department of Finance and Personnel."

A spokesperson for DSD said: "The Department for Social Development has a strong record of tackling benefit fraud and error, with the amounts paid out due to fraudulent claims being taken down to, and now remaining at, historically low levels.

"Nonetheless, the department recognises fully that a level of loss, while just under 2% of benefit expenditure, still represents a significant loss of public funds.

"The department is investing significant effort to enhance its counter fraud and error capability and indeed recently secured additional funding through the Fresh Start Agreement to invest additional resources to tackle fraud in the benefit system.

"A further range of measures are being developed including tougher penalties, more investigators, closer working with partner organisations and enhancements as to how fraud is identified and detected."

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