BILLIONS of taxpayers pounds have been lost as a result of the Department for Work and Pensions' failure to tackle housing benefit fraud and error effectively, a Westminster Parliamentary Committee claims.
The Public Accounts Committee said around £12.6 billion had been spent on Housing Benefit overpayments since 2000/01.
Last year overpayments were £1.4 billion and underpayments were £0.4 billion.
The committee, headed by Labour MP Margaret Hodge, said the DWP made little progress in reducing fraud and error despite repeated calls over the last 16 years for it to improve management of the problem.
It also claimed the DWP needed to take action to strengthen incentives for local authorities to tackle claimant error and fraud, "develop a clearer understanding of fraud and error at the local level and target major areas of loss".
Ms Hodge said: "The size of overpayments is going up not down. In the last financial year £1.4billion of overpayments were made, 5.8 per cent of housing benefit spending, up from £980 million (4.6 per cent) in 2010/11. "Even after recoveries by local authorities, this is a huge cost to taxpayers.
"We are also concerned that the Department is not doing anything to target underpayments, despite the hardship caused to those who miss out on the support they are entitled to.
"It is completely nonsensical that the Department spends just 8% of its fraud and error funding on Housing Benefit, even though Housing Benefit overpayments account for 42% of overpayments across all benefits."
The Public Accounts Committee also accused the DWP of reducing its funding to local authorities.
It instructed the DWP to report back to the committee within six months on measures it has introduced specifically to target underpayments and encourage legitimate take-up.
It also recommended it produce a proposal for how to strengthen incentives so that local authorities tackle housing benefit fraud and error more effectively.
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