HB overpayments….a “staggering loss”

A statement from The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts:

In 2013-14, Housing Benefit overpayments had increased to a staggering £1.4 billion, with an estimated £900m of this not recovered and simply lost to the taxpayer. Around two-thirds of overpayments were because of claimant error (65%), 24% due to fraud and 11% because of official error.

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.

It has not incentivised local authorities to identify fraud and claimant error, which account for the majority of all overpayments. While it has shared data with local authorities to help crack down on fraud and error, these initiatives have fallen well short of expectations.

Taking on the role of inspecting Local Authority Housing Benefit Services from the Audit Commission, the Department failed to carry out its planned 15 inspections, inspecting just one since 2011-12.

Although Housing Benefit overpayments account for 42% of all the Department’s benefits overpayments, the Department spent just £23 million on tackling Housing Benefit fraud and error out of the £308 million (8%) to tackle fraud and error across all of its benefits. This just doesn’t add up.

The Department’s recent efforts to develop a new strategy are long overdue. With so much taxpayers’ money at stake, the Department cannot afford to take such a hands-off approach to reducing Housing Benefit fraud and error.