Universal Credit fraud fears raised by MPs

13 May 2014

Government attempts to cut fraud by introducing the Universal Credit risk being “seriously undermined” by issues with housing benefits, the Department for Work and Pensions Committee has warned.

The government said its reforms were expected to cut losses due to fraud by £1bn over the next five years. But the committee argued that, alongside issues with housing benefits, gaps in the system could also increase the number of self-employed people working for “cash in hand”.

Under the current housing benefit system, local authorities are able to cross-check claims across a range of data relating to other council services. The committee said that, unless the Department for Work and Pensions (DWP) could cross-check Universal Credit claims in a similar way, it could be less effective in tackling fraud and error.

The MPs expressed particular concern over the management of the £24bn-a-year housing benefit element of Universal Credit, which accounts for fraud and error losses of £1.2 billion: more than double any other core benefit.

A DWP spokesman reinforced that the department were “absolutely committed to doing all we can to reduce the level of fraud and error in the benefit system, which has fallen since 2010.”