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Benefit Fraud

Volume 529: debated on Wednesday 15 June 2011

The National Fraud Authority estimates that £21 billion is lost to fraud in the public sector each year. In recent months, the counter fraud taskforce, which I chair, has overseen a series of small-scale pilots that have made immediate savings of £12 million in benefit and tax credit fraud, and which—when rolled out—will save £1.5 billion a year.

I thank the Minister for his response, which, when compared with the Labour Government’s targets for benefit fraud reduction, signals an unambitious approach to tackling this serious problem. Why is that?

It is one thing to have a target but another to reach it. The £21 billion of public sector fraud that the National Fraud Authority identified arose after his party’s Government had set their ambitious targets. We are getting on and doing things—identifying fraud and error and stopping hard-earned taxpayers’ money going out of the door, to ensure that instead it goes to the vulnerable people and important public services where it is needed.

One and a half billion pounds sounds not like a modest saving, in the words of the hon. Member for Barnsley Central (Dan Jarvis), but like a worthwhile saving, given that every penny comes out of people’s pockets. How soon will the Minister be able to take forward savings towards achieving the £21 billion total? We need to stamp this out of the public sector: what can we do about it?

I should make it clear that this is only the beginning. The issue is not only benefit or tax fraud but procurement fraud. My right hon. Friend the Secretary of State for Transport is undertaking a pilot on supplier fraud in his Department, and it is already yielding significant returns. If the previous Government had been as concerned with eradicating fraud as we are, the public finances would not perhaps be in the mess they are in.