By Suzanna Kerridge, 3 May 2001 12:48
NEWS The £170m system came under fire during the early stages of its life as it was plagued with implementation problems leaving many out of pocket. In one memorable incident, the UK Contributions Agency was forced to offer £10 compensation to each person affected by a severe crash which left hundreds of thousands of benefit claims unpaid. But the latest Audit Office report shows that the majority of the £400m losses from the National Insurance Fund 1999-2000 were due to errors made by officials in making benefit awards, fraudulent claims and fraudulent encashment of order books and girocheques. Losses from Jobseekers allowance due to mistakes made by officials and customers amounted to £54m while errors made by officials in assessing incapacity benefit totalled £252m. In a brief statement, Sir John claimed a backlog of work had arisen from previous delays and phased implementation but noted significant progress had been made in reducing fraud thanks to NIRS2. Sir John claimed the Inland Revenue expected to clear the backlog of National Insurance work by October 2001.
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