Labour has paid out pounds 2 bn benefits in error

Thursday, 20 April, 2006

THE unemployed and people on low incomes have received more than pounds 2 billion in overpaid benefits since Labour came to power.

The Government yesterday blamed "official error''. The Tories described the total as "shocking''.

Ministers said there was nothing they could do to recoup the cash other than ask people to repay it voluntarily.

The figures were compiled from answers to parliamentary questions tabled by David Ruffley, the Conservative spokesman for welfare reform.

He called last night for John Hutton, the Work and Pensions Secretary, to report to Parliament on what action he was taking to stop taxpayers' money being sent in error to benefits recipients.

Last year the total overpaid in income support - an income-related benefit paid to low earners aged between 16 and 60 - was pounds 200 million. That was up from pounds 140 million two years before and took the total income support overpayment since Tony Blair entered Downing Street to pounds 1.17 billion.

The total overpayment for the jobseekers allowance - for people under the state pension age who are able to, and are looking for, work - was pounds 50 million last year, down from pounds 100 million the year before. That lifted the total since 1997 to pounds 910 million.

The figures are in addition to tax credit overpayments of pounds 1.9 billion last year and pension credit overpayment which has more than trebled since 2001/02 to pounds 130 million last year.

The Department for Work and Pensions confirmed that its top civil servant, Leigh Lewis, the permanent secretary, had ordered task forces into Jobcentre Plus offices, pensions centres and the Disability and Carers Service before Easter to tackle the crisis.

Mr Ruffley blamed meddling by "incompetent'' ministers who had created an impossibly complex system.

"Gordon Brown's fiddling with the benefit system, and DWP ministers' incompetent running of it, is causing chaos,'' he said. "It is confusing vulnerable claimants, many of whom will, quite understandably, have spent any money overpaid to them.

"It is also not getting taxpayers' money to the people who need it most.''

Last month DWP officials said they would try to claw back any overpayment of pension credit that had been made in error in cases where the mistakes would have been apparent to the recipients.

Ministers later backtracked and said they would send out letters asking people to repay the money voluntarily.

Responding to the latest figures, a DWP spokesman said: "Where there is an official error, we do not seek to claw it back.''

In cases of fraud, as opposed to error, the department tries to recoup the money. In 2004-5 the total that went astray as a result of fraud and error together was pounds 2.6 billion. The combined total lost in fraud and error between 2001 and 2005 totalled more than pounds 11 billion, according to the latest figures. James Plaskitt, the minister for benefits said: "Last year DWP paid out pounds 110 billion in benefits and over 97 per cent of that was paid correctly and on time. We are the first Government to report measures of official error which last year stood at 0.8 per cent.

"Whilst this is low, we are determined to reduce it further. That is why the error task force has been set up and its work is already well advanced.''