The Government is now assuming a 5pc year on year increase in fraudulent behaviour, which implies that the annual amount lost to criminals will rise above £10bn by 2031.
It comes after a separate report by the government watchdog found that taxpayers had been left on hold by HM Revenue and Customs (HMRC) for the equivalent of almost 800 years last year. The tax office has missed its targets for almost all of the last five years.
The tax office has come under repeated fire for drops in its customer service and been forced to defend its generous home working policy.
HMRC’s advisers answered 22pc fewer calls in 2022-23 compared to 2019-20. Earlier in the year, it was forced to U-turn on plans to close its phone lines every summer following a backlash.
An HMRC spokesman said at the time: “While customer service standards on our phone lines are still not where we want them to be, we’re making strong progress in our efforts to improve our customer services and additional funding has been confirmed by the government.”
Jo Causon, chief executive of the Institute for Customer Service said there needed to be a “renewed focus” on customer service in the public sector.
She added: “The NAO report highlights some key aspects for DWP to improve and notes some positive changes they have made. Given the critical nature of the work they do, these areas will need to be addressed.”
A DWP spokesman said: “We acknowledge the challenges set out in this report and are committed to providing an efficient and compassionate welfare system.
“While it recognised the majority of new benefits claims were processed on time, our modernisation programme will help drive improvements in customer service, including improving support for PIP applications and a new online application service.”