Ministers’ attempts to slash fraud and error in the benefits system could be undermined because of uncertainty over how the housing element of universal credit will work, MPs have warned.

The work and pensions select committee said in a report today it was unclear how officials would be able to cross-check universal credit claims against other information to prevent benefit fraud and error.

Currently, local authorities can cross-check claims across a range of data relating to other council services.

The government claims an IT system – the integrated risk and intelligence service, or IRIS – will allow it to cross-check data and provide similar safeguards against fraudulent claims under universal credit.

But last year the National Audit Office found IRIS was ‘missing’ from universal credit pathfinders. It remains uncertain how or when DWP will get access to property data currently available to local authorities, the committee said.

Dame Anne Begg, chair of the committee, said: ‘Universal credit has the potential over the longer term to substantially reduce fraud and error in the benefits system. However, this could be seriously undermined because of the uncertainty about how DWP will administer the housing element of universal credit without increased risks of fraud and error.’

The committee also said the public’s perception of the rate of benefit fraud was 34 times higher than the actual rate.

It recommended the Department for Work and Pensions publish benefit fraud figures on a separate day to those related to error in the benefits system to ‘reduce the risk of confusion or conflation in media reporting’.