Drop in Housing Benefit fraud and error but levels remain unacceptably high

The report by Mr. Kieran Donnelly summarises the results of his audit of the LPS accounts, which have received a qualified audit opinion as a result of the levels of fraud and error in Housing Benefit expenditure.

He found that in 2019/20, LPS administered £37 million of Housing Benefit to claimants who own their own home but who are on low income and suffering financial hardship.

The levels of fraud and error, which are estimated by the Department for Communities Standards Assurance Unit, amounted to a total of £3.9 million, representing 10.6 per cent of total housing benefit expenditure.

While this is a 2.5 per cent decrease compared to the 13.1 per cent recorded in 2018/19, there has been a notable increase in levels of customer fraud, which totalled £2.4 million in 2019/20 (up from £1.6 million in 2018-19).

Mr Donnelly commented: “While I welcome the considerable efforts LPS has made to improve fraud and error rates, the increase in customer fraud by fifty percent in 2019 is concerning.

"The significant levels of fraud and error in LPS total Housing Benefit Expenditure remain unacceptable, and the qualification of my audit opinion reflects that.”

Other findings noted in the report include: 1 - In 2019/20, LPS administered £3.3 million of rate rebate which is reflected in these financial statements, for claimants in receipt of Universal Credit. LPS estimated that the amount of fraud in error within these transactions to be 7.2 per cent of LPS total rate rebate expenditure. The C&AG has noted that he will keep this matter under consideration in light of increased numbers of claimants becoming eligible for the Rate Rebate Scheme in the future. This increase is anticipated as a result of claimants due to migrate to Universal Credit from other benefit types, as well as new Universal Credit claimants, particularly due to the impact of COVID-19.

2 - Levels of ratepayer debt were £124.4 million at 31 March 2020 (£124.5 million in 2019). £14.5 million of debt was written off during the year, and £38.3 million was identified as impaired debt, which is unlikely to be repaid in full. However, LPS has advised that the majority of outstanding debt is due to be recovered, and the C&AG has stressed the importance of ensuring all necessary steps are taken to maximise this recovery.