Over £1 billion paid out in fraudulent benefit claims and social housing provision could be eradicated quickly if simple, cost-effective and proven fraud prevention techniques were implemented more widely across the public sector.
According to Experian’s Public Sector business, saving s could be made without needing new computer systems and could deliver an immediate crackdown on incapacity benefit, social housing and council tax fraud. Based on its existing work with the Government and its experience of tackling fraud in the public and private sector, Experian estimates that over £1 billion could be claimed back for the taxpayer and public purse.
In the company’s latest Insight Report entitled “Fighting Fraud in the Government’s Age of Austerity”, the potential savings are detailed as follows:
Up to £600m from Social Housing Tenancy fraud.
Work in London by Experian has shown that Social Housing Tenancy Fraud could be reduced by £200m. If the same methods were applied across the whole of the UK this would result in savings in excess of £600m. By reducing the amount of inappropriate and fraudulent claims for social housing, accommodation is also made available for those in genuine need. By freeing up social housing a significant reduction in temporary accommodation costs could be achieved, which is currently running at over £1 billion a year.
Up to £300 million from Incapacity Benefit fraud.
Experian estimates that savings of up to £300m could be made in the short term by identifying those that should not be claiming Incapacity Benefit.
£100m a year on Single Person Discount fraud.
Experian has already delivered over £30m of savings for local authorities by identifying Single Person Discount fraud. This is cash straight back to taxpayers and if the same procedures were extended to all local authorities savings could amount to more than £100 million a year.
£17m on Housing and Council Tax fraud.
Experian’s Housing Benefit and Council Tax Benefit fraud detection service has proved so effective that the Department for Work and Pensions (DWP) is rolling it out to all 380 local authorities in the UK. The announcement by the DWP follows a highly successful localised pilot which showed how Experian’s service could reduce housing benefit by £17 million a year.
Andrew Davis, Head of Fraud, Experian Public Sector, commented:
“Public sector fraud in the UK is costing tax payers over £17 billion a year. Our analysis suggests that this has been rising rapidly year-on-year – fuelled by specific, rectifiable challenges with the current system as well as financial stress and unemployment.
“In the case of the latter, a symptom we may see emerging is fraud being committed by those who have not historically been responsible for fraud. Much of this fraud will simply be opportunistic, driven by financial stress or people taking advantage of system errors including overpayment. With parallels to some of the fraud trends we have seen in the private sector, it is possible that some young, well-educated city dwellers could be tempted to turn to public sector fraud to maintain their lifestyles.”
Experian is the leading global information services company, providing data and analytical tools to clients in more than 90 countries. The company helps businesses to manage credit risk, prevent fraud, target marketing offers and automate decision making. Experian also helps individuals to check their credit report and credit score, and protect against identity theft.
Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Total revenue for the year ended 31 March 2010 was $3.9 billion. Experian employs approximately 15,000 people in 40 countries and has its corporate headquarters in Dublin, Ireland, with operational headquarters in Nottingham, UK; Costa Mesa, California; and São Paulo, Brazil.
Bruno Rost
Head of PR, Experian Public Sector
+44 (0)7967 567012
For more information, visit www.experianplc.com.