Benefit fraud may cost UK£7 billion

The Sunday Times reported in mid May that the true cost of housing benefit fraud may be as much as UK£7 billion a year. A Department of Social Security internal report indicated confirmed fraud of UK£2 billion with UK£3 billion of “high suspicion” cases and a further UK£2 billion classified as “low suspicion”. The report also revealed that 40 per cent of local authorities have no stated prosecution policy for benefit fraud. Only seven per cent pursued 20 or more cases through the courts in the year 1998-99. A significant problem is staff complicity through “sleeper rings” in which an individual joins the agency with the express purpose of committing fraud. Once he knows how the system works, he colludes with external claimants to defraud it of large sums.