Fund for needy 'lost' pounds 21.3m: Failure in keeping records of loans

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LOANS of pounds 21.3m made to the needy from the Social Fund are 'missing' from computer records run by Department of Social Security branches, writes Rosie Waterhouse.

Staff have failed to keep up-to-date and accurate records when people who have received a loan move to another location, according to Sir John Bourn, Comptroller and Auditor General at the National Audit Office, the government spending watchdog. An NAO spokesman said that no evidence had been found of fraud by people who had received loans or by staff.

The Benefits Agency, which oversees the fund, has assured Sir John that eventually most of the transactions will be transferred and that only a 'small part' of the pounds 21.3m will remain unaccounted for.

However, the NAO is less confident that most of the transactions would be traced as the amount outstanding goes back to 1988 when the Social Fund was introduced. It provides loans to meet maternity expenses, funeral costs, heating and in cases of emergency.

The report, to be considered by the Commons Public Accounts Committee, said: 'The Agency were unable to estimate what proportion may prove to be untraceable or otherwise impracticable to pursue and would therefore have to be written off.'

In a Commons written reply yesterday, Nicholas Scott, the social security minister, announced that the Social Fund will receive pounds 346m in 1993-94, an increase of pounds 44m.