How to slash £1bn from benefits bill - use IT

The government wants to slash the £2bn it loses every year in benefits overpayments by implementing more joined-up computer systems.

In the 2005/06 financial year roughly £1.9bn was overpaid by the Department for Work and Pensions (DWP) as a result of errors in the benefits system - with the complex nature of the rules governing the benefits system and poor IT integration among the reasons for the extra generosity.

But DWP minister James Plaskitt said the department expected to cut this by £1bn by 2012. "We have had great success in reducing benefit fraud. We now intend to apply the same drive and determination to reduce customer and official error," he said in a statement.

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The DWP said while many benefits are linked to each other, business processes are not fully automated so errors can creep in as staff have to make calculations offline.

Where systems are not integrated, staff need to use paper to let other parts of the department have information - and when documents get lost more errors occur.

As the DWP report points out: "Those parts of benefit processing which are fully automated and integrated - requiring little or no routine staff intervention - operate well. Where the system requires input from our staff, the potential for error entering the system increases."

Future systems will be designed to make it impossible for staff to process a benefit claim without following the correct process or entering all the required information. The DWP said this is its "long-term ambition".

In the short term it will work through a programme of system fixes to stop the most costly errors. And the DWP is also introducing a new computer system, the Customer Information System, which will share basic customer information such as name, address and rate of other benefits in payment across the department.

In the longer term, it said it wants customers to submit claims directly into its IT systems via the internet.