Department for Work and Pensions accounts show £​3.2bn lost in overpayments and £​1.3bn underpaid.

The Whitehall spending auditor has declined to sign off in full the accounts of the Department for Work and Pensions for the 24th year running, because of the extent of fraud and error in the benefits system.

Some £​3.2bn is thought to have been lost through overpayments in 2011/12. Underpayments came to an estimated £​1.3bn.

Auditor general Amyas Morse said fraud and error was "​unacceptably high"​ and qualified his opinion of the DWP'​s accounts, the 24th year consecutive year this has been the case for the department and its benefits-handling predecessors.

Labour MP Margaret Hodge, who chairs the public accounts committee, said the DWP had failed to get a grip on fraud and error despite assurances that it would do so. "​This department has the biggest budget in Whitehall and its inability, 24 years in a row, to administer its spending properly is just unacceptable,"​ she said.

"​With fraud and error of £​4.5bn in 2011-12, roughly the same as in previous years, huge sums of money are being lost to the public purse that could have been spent on our schools and hospitals.

"​Government spending is at its tightest for over 50 years and it simply can'​t afford to carry on like this."​

Full story in the Guardian


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