HC Deb 28 July 1997 vol 299 cc102-4W
28. Mr. Fabian Hamilton

To ask the Secretary of State for Social Security if she will make a statement on the Government's proposals on fraud in the benefit system. [9056]

Mr. Denham

We are committed to modernising the structure and delivery of social security to encourage independence, social cohesion and well-being; to develop an active welfare system that supports work, savings and honesty; and to help tackle effectively unjustifiable social and economic inequalities. To that end, we are examining the major components of the system.

As part of this work, we are re-examining the strategic objectives governing counter-fraud work throughout the Department. This will ensure that there is coherence between counter-fraud objectives and other policy and operational strategic objectives, in particular those aimed at controlling loss of programme expenditure. We are also looking at the assumptions underpinning the calculation of estimated fraud savings. We will be involving external parties in discussions on these issues and inviting experts in their field to a fraud seminar to be held in September.

30. Mr. Hutton

To ask the Secretary of State for Social Security if she will make a statement on the level of fraud in housing benefit. [9058]

Mr. Denham

We are determined to clamp down on housing benefit fraud as part of our drive to restore public confidence in a secure social security system.

Estimates of the level of housing benefit fraud vary. A 1995 survey of housing benefit accuracy estimated the level of fraud to be almost £1 billion, whereas evidence presented to the Social Security Committee in 1996 suggested the figure could be as high as £2 billion. Over the next six months, with the help of local authorities, we will conduct a further detailed study to provide an accurate and up-to-date estimate of the level of fraud and profiles of those who perpetrate it, including the extent to which unscrupulous landlords are involved in fraud. As a first step, I have written to chief executives of local authorities emphasising the importance of the study and inviting their authority to participate.

Mr. Grieve

To ask the Secretary of State for Social Security if she will list in 1997–98 prices(a) the amount which the Government have saved as a result of measures to tackle benefit fraud in each year since 1978–79 and (b) the current projections for savings in future years. [10847]

Mr. Denham

This Government's aim is to reduce poverty and welfare dependency and to build confidence and integrity into the benefit system. An important part of that is the fight against benefit fraud.

Benefit savings figures prior to 1986 are not readily available and could be provided only at disproportionate cost. Such information as is available is given in the tables.

The projected savings figures are based on the estimates of the previous Administration, and I shall examine carefully the assumptions underpinning them.

Past savings
£ million
Year DSS savings £(1997–98 prices) LA savings1£ (1997–98 prices) Total
1986–87 235 n/a 1235
1987–88 304 n/a 1304
1988–89 380 n/a 1380
1989–90 419 n/a 1419
1990–91 428 n/a 1428
1991–92 528 n/a 1528
1992–93 632 n/a 1632
1993–94 720 95 815

Past savings
£ million
Year DSS savings £(1997–98 prices) LA savings1 £(1997–98 prices) Total
1994–95 778 166 944
1995–96 21,290 205 1,495
1996–97 21,566 3267 1,833
1 No central records are kept of any local authority savings achieved prior to April 1993. Local authority figures are net of subsidy payments.
2 2 Includes savings from initiatives in the security and control programme. Savings of £1,524 million at 1996–97 prices are shown in the Benefits Agency annual report and accounts, HC78, published on 22 July 1997.
3 Local authority savings are provisional and subject to audit.

1. Figures have been converted to 1997–98 prices using the adjusted GDP deflator at market prices.

2. Figures have been rounded to the nearest £1 million.

3. The information is given in terms of weekly benefit savings deriving from activity in the given year, not public expenditure savings which could be accounted for in that year. Weekly benefit savings are calculated by taking the difference between the amount incorrectly paid to an individual and the correct amount of benefit due, following intervention of the fraud officer. This amount is multiplied by 32. Based on research which mainly covered income support, 32 weeks is the average length of time a claim would have continued if the fraud had not been detected. This multiplier is currently applied to all benefits.

Future projections
£ million
Year DSS savings £(1997–98 prices) LA savings1 £ (1997–98 prices) Total
1997–98 1,585 280 1,865
1998–99 1,927 309 2,236
1999–00 1,938 274 2,212
1Local authority figures are net of estimated subsidy payments.


1. The savings figures are estimates and have been calculated on a different basis to past savings. Estimates weekly benefit savings figures have been adjusted so that the savings are counted in the year when they actually occur to align more closely with the public expenditure process.