£1bn benefit staff errors slammed
Published 25/11/2010 | 00:42
Benefit chiefs have been criticised by a spending watchdog for failing to cut errors by staff which cost the taxpayer at least a billion pounds a year.
The National Audit Office (NAO) said there had been "no discernible decrease" in the number of costly mistakes despite at least £23 million a year spent trying to tackle the problem.
Last year overpayments due to administrative error totalled an estimated £1.1 billion and underpayments £500,000 - almost the same position as four years ago.
Most of the overpayments have to be written off under social security law. And the actual cost to the public purse is much higher as that does not include money devoted to putting the situation right, the NAO noted.
The estimated cost of overpayments due to administrative error last year was 0.7% of the total benefit bill, the same as in 2006/07, with the figure for underpayments dropping from 0.4% to 0.3%. Some people faced "hardship" because of underpayments, the NAO said.
The standstill came despite a new strategy introduced in 2007 including IT system changes and action teams which the NAO said lacked the necessary "sophistication".
While it was among the best in the world at working out how many errors were being made, the Department for Work and Pensions (DWP) was failing to gather the information on why they were happening, it suggested. "There is no clear evidence that the Department's commitment to reducing administrative error has led to a significant improvement in performance," it concluded.
Consultation with benefits staff carried out by the NAO for its research exposed complaints about out-of-date training, conflicting targets and poor communication between IT systems.
The report said the Government's plans to simplify the benefits system by wrapping many payments into a single universal payment would help but more action was needed while that was introduced.
The DWP is awaiting a Supreme Court ruling in a challenge by anti-poverty groups of its efforts - now suspended - to seek repayment of overpayments under common law.