Softening of attitudes to fraud putting pressure on welfare system, report warns

Society’s attitude to fraud is “softening” with the effects being felt in the billion-pound benefits system, the Department for Work and Pensions has said.

The £266.1 billion welfare budget “is a deliberate target for both organised crime groups and opportunistic individuals”, the department’s annual report warned.

In the year to March, fraud accounted for overpayments of £7.4 billion, the report said.

It estimated that fraud levels could grow at around 5% each year without action to reduce them.

A “rising trend” in fraudulent behaviour towards organisations generally and a “softening of attitudes” around fraud in wider society is “likely to be mirrored in the benefit system”, the DWP said, noting the greater scale of the challenges it faces in trying to prevent and detect fraud as a result.

Research noted included a British Social Attitudes Survey showing the proportion of people who felt it was either “not wrong” or only “a bit wrong” for someone claiming unemployed benefits not to report a cash income from a casual job had risen from 16% to 27%, between 2016 and 2022.

A separate study from the University of Portsmouth suggested the proportion of people who thought falsely claiming benefits was never justified had fallen from 85% in 2011 to 67% in 2023.

That study’s “integrity score” calculations for participants, based on their responses, showed that more than a fifth had what was classed as a low integrity score last year, up from just 7% of respondents in 2011.

The DWP report stated that an “increasing propensity for fraud in society” was a trend that began before the pandemic and has continued after it.

The annual report said: “The overall conclusion of this analysis is that there is an increasing trend in the underlying propensity towards fraudulent behaviour, which can be expected to place an upwards pressure on fraud in the welfare system.

“DWP has estimated through the Office for Budget Responsibility (OBR) expenditure forecasts that this long-term behavioural trend creates a headwind that would cause fraud levels to grow at around 5% per year without action to reduce it.

“Based on the variety of evidence highlighting a long-term sustained increase in fraudulent behaviour, this trend is expected to continue throughout the OBR forecasting period over the next five years.”

Work and Pensions Secretary Liz Kendall is due to set out plans to tackle economic inactivity and help the Labour Government meet its long-term ambition of reaching 80% employment.

She is expected to lay out Labour’s ambitions to change her department from one for welfare to a “department for work” in a speech on Tuesday.

A DWP spokesperson said: “This Government will not tolerate fraud or waste anywhere in public services, including in the social security system.

“We are determined to reduce fraud and error and are currently exploring all options on how best to achieve our goal.”