The £5 billion pay out to people who shouldn’t have received it

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Department for Work and Pensions – £3.5 billion of overpayments detected by auditors

CROSS POSTED ON BYLINE.COM

Here is a strange paradox. The government has imposed a tough and to many people unfair benefits and  tax credits regime which has squeezed the poorest – both the unemployed and those in work.

Yet this summer accountants have revealed that HM Revenue and Customs and the Department for Work and Pensions has paid out £5 billion to people on benefits and low incomes who should not have received it. And they predict that even more will receive these payments next year. I have written about this in Tribune magazine this week.

The disclosure comes in the annual audit of both departments by Parliament’s financial watchdog, the National Audit Office, who have qualified the accounts of both departments – as not being a true and accurate description of public spending.

According to the NAO report: “HMRC estimates that the overall level of error and fraud that resulted in overpayments in Tax Credits in 2015-16 increased to 5.5% of Tax Credits expenditure (from 4.8% in 2014-15)

“HMRC estimates that the overall level of error and fraud resulting in underpayments in Tax Credits in 2015-16 remained at 0.7% of Tax Credits expenditure (0.7% in 2014-15). This equates to overpayments of £1.57 billion and underpayments of £210 million.

“HMRC has told us that it believes the level of error and fraud in Tax Credits will increase further when measured for 2016-17. Two main factors have been identified that will lead to this increase: the introduction of the ‘Commercial with a view to a profit’ self-employment test for those who are self-employed and the impact of the Concentrix contract. The impact of these factors on error and fraud levels will not be measured until June 2018, and so the estimate of error and fraud in 2015-16 remains the most up-to-date indication available of error and fraud in Tax Credits expenditure for 2016-17.”

Concentrix were sacked by the department after a privatisation programme went wrong – and they were not up to the job.

Worse are the figures for DWP.

The  NAO’s findings are: “Excluding State Pension, overpayments are at the highest levels since 2009-10, while underpayments are at the highest recorded levels.”

Overpayments amount to £3.4bn, excluding the state pension, an increase of £400 million while underpayments are £1.5bn In percentage terms this amount to an increase to 4.1 per cent of all overpayments and 1.9 per cent of all underpayments.

The report says: “Amongst benefits measured annually for fraud and error, Employment Support Allowance and Housing Benefit overpayments are at the highest recorded levels, and Jobseeker’s Allowance overpayments have returned to the highest levels since 2010-11.

The NAO questions some of the techniques used by the DWP to calculate fraud – saying it assumes that when people don’t get back to the department for a re-assessment that they have been fraudulently claiming. This may not be the case. Also, information is out of date.

“The absence of up-to-date information on error rates in large benefit streams creates a risk that the department is not targeting its fraud and error interventions effectively,” the report says. “For example, Disability Living Allowance, which accounted for £11.5 billion of expenditure in 2016-17, has not been measured for fraud and error since 2004-05.”

All this points to some serious mismanagement by the ministries – which have been squeezed by successive coalition and Tory governments. But it doesn’t mean that those at the top have suffered. I shall return to some interesting findings in their annual reports.

Child sex abuse:The audio file that names an ex Tory Cabinet minister

An audio  recording that names a former Tory Cabinet minister in connection with alleged child sex abuse is expected to be heard by MPs shortly.

This latest dramatic development is reported fully on Exaro’s website is of an interview with a customs officer who witnessed seeing the minister on a seized videotape at Dover,

The video is political dynamite. Customs and Excise seized it, along with other “indecent or obscene” films and videos of children, from Russell Tricker, a businessman, as he attempted to bring the material into the UK from Amsterdam.

Senior managers took over the case at the time, and are understood to have passed the video cassette to the Security Service, MI5. Tricker was released, and no further action was taken.

The fact that MPs want to hear this should mean that the police will have take this latest claim seriously as they will have to decide whether to hand over the tape to the new child abuse inquiry, summon the customs officer to give evidence to Parliament  or press the police to follow up this incident properly.

Yet another fast moving development in a story that is not going to go away.

 

The child sex abuse customs video: Why didn’t the police act?

Over the weekend my intrepid colleague, Mark Conrad, broke a very detailed story on Exaro News and in The People, about a pornographic child abuse video seized by the customs way back in 1982. You can read the full story on both sites.

 The customs officer, Maganlal Solanki, then handed over the tape to senior managers at Customs and Excise. They took over the case. took no further action, and are understood to have passed the video cassette to the Security Service, MI5. No one was prosecuted.

The officer says a prominent  Tory Cabinet minister was on that tape but he is still too scared to discuss what he is doing and there still seems an attempt to gag him.

Again like the scandal at Elm Guest House, the failure to pursue paedophile  Sir Cyril Smith, and what is being revealed about the scale of sexual abuse in a Durham detention centre, the police and the security services and special branch( who certainly knew about Smith) have questions to answer.

 Why  is it taking 40 years for the police to review cases ? It begs the question of whether it will be covered up yet again.  Or have people destroyed all the evidence?

Given such a video would have provided prima facie evidence for any prosecution why was nothing done about it and why was the person who brought it into Britain at Dover allowed to go on his way?

 The more we look into this murky area, the more unanswered questions there are and the nastier the cover up.