Picked up from the www.benefitsandwork.co.uk website and worthy of note here in case you missed it (as I did) initially. From the Daily Mail on 8th July 2008, by Michael Lea.

The welfare fraud farce: How ministers spent £154 million to get £22 million back from benefit cheats.

"Investigating welfare fraud last year cost taxpayers seven times the amount actually clawed back from benefits cheats. 

Ministers spent £154 million on counter fraud operations in 2006-07, while only £22 million was recovered for the Treasury, a report by MPs reveals today. 

 Benefit fraud has fallen overall from £2 billion in 2001-02 to £800 million last year. 

However, the Commons' public accounts committee found that the saving has been almost entirely offset by a £900 million rise in the amount lost to errors over the same period. 

The cost of mistakes by officials and claimants  -  blamed on the complexity of the system  -  has nearly doubled since 2001-02 and now stands at £1.9 billion. 

It means total fraud and error in the system cost the taxpayer £2.7 billion last year  -  the same amount borrowed by Gordon Brown to compensate those who lost out from his decision to abolish the 10p starting rate of tax. 

Committee chairman Edward Leigh said the level of error was 'not acceptable' and called for more to be done to tackle organised crime gangs and prosecute fraudsters. 'Benefit fraud diverts public funds into the pockets of criminals and, in so doing, reduces our confidence in the benefits system,' he said. 

'There are important areas where the Department for Work and Pensions must improve its performance. 

'It must get a lot better at tracking down and recovering fraud debt. It must get a firm understanding of the cost-effectiveness of its counter fraud activities, otherwise it cannot know that it is targeting its resources to best effect.'

According to the report  -  Progress In Tackling Benefit Fraud  -  some £106 million of fraud was identified last year in return for the £154 million spent tracking down conmen.

However, debt recovery, described by MPs as an 'essential part of tackling fraud', totalled only £22 million in 2006-07.

Fraud last year included £210 million in relation to income support claims, £150 million in housing benefit, £110 million in pension credit and £60 million in jobseekers' allowance. 

The most common cons included claiming as a single person while living with a partner; bogus claims from those living overseas, and undeclared earnings and income.

But just 7,500 cases were taken to court in 2006-07 out of 200,000 where officials believed there could be a successful prosecution. 

'Potential fraudsters will not be deterred if the department is not seen to be taking firm action where there is good evidence that fraud has taken place,' the report said. 

Referring to the pitiful amount of taxpayers' money recovered, it added: 'The overall deterrent effect of the department's counter-fraud work will ultimately be reduced unless money is recovered.' 

In 2006-07 errors by staff cost £900 million and those by claimants £1 billion. LibDem work and pensions spokesman Jenny Willott described the system as 'fundamentally flawed'. 'It has grown so complex that even officials can't understand it,' she said.

© 2008 Associated Newspapers Ltd"