The below Parliamentary question was asked by Baroness Jones of Moulsecoomb on 2016-02-29.
To ask Her Majesty’s Government what was the total budget for the National Benefit Fraud Hotline in 2014–15; how many allegations of suspected benefit fraud were reported via that hotline or the online reporting form in 2014–15; what was the total cost of investigating those allegations; and how much was identified in recoverable overpayments by those investigations.
Lord Freud
The Fraud and Error Service (FES), part of the Department for Work and Pensions (DWP) is responsible for the prevention, detection and where appropriate, investigation of Fraud and Error against all benefits administered by and on behalf of DWP.
The National Benefit Fraud Hotline (NBFH) is outsourced; therefore there is a yearly cost for outsourcing as opposed to a budget. The total outsourcing cost the NBFH for 2014/15 is £303,480. This figure covers the 52 week period commencing 31 March 2014.
The available data on allegations of benefit fraud reported via the NBFD or online only covers incidents recorded on the internal FES Fraud Referral and Information Management System (FRAIMS.) It does not give the total volume of enquiries and calls made to NBFH, only those that were entered onto FRAIMS. There are various reasons for allegations not being entered onto FRAIMS, including the fact that not all enquiries and calls are of an appropriate nature. In 2014/15 there were 207,600 cases of suspected benefit fraud reported via the NBFH that were entered onto FRAIMS or reported online.
We are unable to provide a precise response on the cost of investigating these allegations because some of the investigations from the allegations made in 2014/15 are still on going. We are able to provide an estimate of the cost of investigations that achieved an outcome in 2014/15 which were initially triggered by an allegation made through the hotline or online reporting. We cannot distinguish the exact costs of investigating NBFH allegations from the total cost of investigating all allegations and so this figure is an estimate, calculated by apportioning total costs of Local Service that were undertaken in 2014/15 on the basis of Positive Outcomes as this is the main cost driver. This was estimated to be £16.9m. This figure only includes direct costs of Investigations – there are no overheads included.
As with the cost of investigation, we are unable to provide a precise response on the amount identified in recoverable overpayments because some of the investigations from the allegations made in 2014/15 are still ongoing. We have instead provided the value of overpayments that achieved an outcome in 2014/15 which were initially triggered by an allegation made through the hotline or online reporting. £46,068,848 was identified as recoverable.
Note that identifying overpayments also prevents a significant amount of future losses which are not included in the value of recoverable overpayments identified shown here. Referrals from members of the public therefore provide good value for money.
