04.12.14
Councils to receive cash rewards for tackling housing benefit fraud
The government will provide cash rewards to councils that reduce the amount of money lost through fraud and error in housing benefit, it has been announced.
Within the chancellor’s Autumn Statement, it was revealed that the government will establish a new Housing Benefit Fraud and Error local authority incentive scheme.
The financial rewards available to local authorities will be worth up to £35m over the new three years, according to Treasury documents.
This announcement follows a National Audit Office (NAO) report that recently revealed fraud and mistakes in housing benefit have led to overpayments costing £1.4bn, a jump of 40% in the last three years.
NAO strongly criticised the Department for Work and Pensions (DWP) for failing to tackle the problem earlier by cracking down on councils who process the payments.
At the time, Margaret Hodge MP, chair of the Public Accounts Committee, said: “The Department’s ‘out of sight, out of mind’ mentality means it has not set performance targets and has limited oversight of local authorities’ performance in tackling housing benefit fraud and error.”
In addition to the cash incentive scheme, the Treasury revealed that extra £6m will be made available to increase capacity within DWP Fraud and Error Operations. It is expected that this will deliver significantly more interventions targeting claims identified as carrying a risk of fraud, claimant error or official error, to ensure that claimants are not being paid more than they are entitled to.
The government will also work with the private sector to improve debt collection in the tax and welfare systems through the Debt Market Integrator – a more unified and coordinated approach which makes use of a range of debt collection services across the market.
Mike Turley, head of public sector at Deloitte, the business advisory firm, said: “The government is providing a single portal for the public sector to access debt collection and enforcement services through a Debt Market Integrator.
“That reflects the US Department of the Treasury’s Bureau of the Fiscal Service that works with federal government as well as states on debt management and collection. Comparable performance improvements in the UK could save the taxpayer an additional £12bn per year.”
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