Can technology reduce fraud?

The UK Government is introducing new digital technology at over 700 job centre sites including a digital signature to replace the old-fashioned paper booklets that jobseekers must carry around with them.

This is expected to save a whopping £1 million a year of tax payer’s money – a worthwhile investment for sure.

What I found interesting was part of the statement from the Minister for Employment, Esther McVey: “Claimants will soon be signing on using electronic pads in a move that will help to improve security, reduce fraud in the welfare system and make the jobseeking process paperless”

I have no doubt that this scheme is as much as to help cut costs using technology as it is to win votes in the run up to the election next year, however it is the bit about reducing “fraud in the welfare system” that intrigues me most.

Wikipedia states that the Department for Work and Pensions claim that fraudulent benefit claims amounted to £900 million in 2008-9. This would include benefit claims outside of just claiming unemployment benefit whilst working in the informal labour market.

David Cameron in an article for the Manchester Evening News 10 August 2010 claimed that “Welfare and tax credit fraud and error costs the taxpayer £5.2bn a year.” I can’t seem to find any reference to how much of that relates to fraud in the jobseekers market but clearly this is a big problem.

I think the Minister missed a real “trick” here – fraud is a political issue of significance importance to the voter. If using technology and biometric digital signatures is going to make an impact on stamping out fraud in the jobseekers market the Minister could and should have explained how.

From a BBC article, it seems that the software used when signing on a pad measures the way in which someone signs. It must relate to at least 80% of six sample signatures taken when a jobseeker first registers.

In my opinion, this will make a difference to the fraud. It will be much harder to claim a jobseeker is who they say they are when in fact they aren’t. It will be easier to monitor, track and identify trends which the DWP can analyse to better counter fraud in the future. As they say, knowledge is power.