Benefits fraud and blunders cost £3bn

A STAGGERING £3bn was lost to fraud and error in the chaotic benefits system last year. Despite repeated pledges from Labour to crack down on bogus claimants, the amount of taxpayers' money squandered reached the same figure for the third year running - triggering a furious condemnation from Whitehall's spending watchdog.

National Audit Office chief Sir John Bourn said the losses were so 'substantial' he was unable to approve the Department for Work and Pensions accounts.

His anger was shared by MPs on the powerful Public Accounts Committee, who branded the fraud and error figures a 'grievous waste'.

The scale of the problem was spelt out in the National Audit Office's annual report, which revealed that the £3bn losses amounted to almost 3% of the annual benefits bill.

In the case of the Jobseeker's Allowance, for every £10 spent, £1 was taken by fraudsters or lost through errors.

Edward Leigh, Tory chairman of the Public Accounts Committee, said: 'The flood of benefit money being lost as a result of fraud and error is not abating.'

The Department for Work and Pensions insisted benefits were being continuously monitored to prevent further losses.