Committee criticises poor performing benefit fraud IT system

The Department of Work and Pensions has been slow to improve its information systems and “must improve its performance”, according to a Public Accounts Committee report.

In a statement made to the Committee, chairman Edward Leigh MP revealed that the estimated amount of benefits lost to error has nearly doubled over five years to almost £2 billion a year.

In addition, it was noted that lost benefits increased from £1 billion in 2001-2002, to £1.9 billion in 2006-2007, with the bulk of losses contributed to processing errors.

“Benefit fraud diverts public funds into the pockets of criminals and, in so doing, reduces our confidence in the benefits system. There are important areas where the DWP must improve its performance,” said Leigh. “Fraud is one thing, error another - although determining which is which in the case of claimants can be difficult. The estimated amount of benefit lost each year…has nearly doubled over five years. This is not acceptable. The DWP must direct its training and compliance checks on those local offices and benefits which prove to have the highest error rates.”

The DWP’s slow improvements to systems has hampered the department’s inability to measure the cost-effectiveness of counter-fraud activities, according to the Committee.

In 2003 the Committee had warned the DWP that management information was inconsistent and poor.

However, it took until February this year for the Department to roll out a new national management information system.

The new system, FRAIMS (Fraud Referral and Intervention Management System), has cost a total of £65 million.

Earlier this month the DWP announced plans to put five IT contracts worth a total of £3 billion out to tender.

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