Benefit fraud up by £100m? Not according to the official estimates

Published: 14th Mar 2014

The news that bailiffs will be given the power by DWP to target high value goods such as cars and TVs from those unable or unwilling to repay benefits that they fraudulently claimed featured in many news outlets today.

Many speculated about what impact this might have on the £1.2bn the government estimates benefit fraud costs the taxpayer, a bill which the Daily Mail said had "increased by £100 million last year."

However the latest official estimates on the cost of benefit fraud cited by the paper don't seem to show the growth in losses claimed. In fact the Department for Work and Pensions (DWP) says that the £1.2bn lost in 2012/13 was exactly the same as the previous year, both in cash terms and as a proportion of the overall amount spent by the department on benefits. There has been an increase of £100 million in the total amount overpaid due to fraud and error (to £3.5bn), which is perhaps what has confused the Mail.

Equally importantly, the figures themselves are estimates derived from looking at a sample of cases, and as such there is a margin of error attached to them. The DWP says that it is confident that the true cost of benefit fraud lies somewhere between £900m and £1.7bn (at the 95% confidence interval).

Benefit fraud graph

So even if we could trace the £100m rise the Mail points to, the size of the movement described falls comfortably within that margin of error, and wouldn't represent a statistically significant increase.


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