A GOVERNMENT clampdown on benefit cheats is in disarray because the records of nearly 250,000 claimants — who are receiving a total of £730 million a year — have been lost, The Times has learnt.

The Department for Work and Pensions has mislaid the case details of 222,120 people awarded disability living allowance, a benefit that ministers suspect is open to abuse.

Since the records were lost — during a transfer to a new computer system in the 1990s — the claimants involved have received a total of £9 billion.

The disclosure has left Tony Blair’s plans to take millions of people off sickness benefits in tatters. It means that efforts by social security officers to check whether claims are genuine will be severely hindered.

Documents obtained under the Freedom of Information Act show that the department has lost vital information about the claimants, who receive a benefit reserved for those with a long-term health problem or disability.

Case notes were transferred to a new computer system in 1992, but claimants’ health problems were not recorded. The main disabling condition in each case was listed as “unknown”, the department said. Only their contact details remain.

Since then, claimants have received up to £102.90 a week each and will continue to do so, indefinitely, until their cases are checked.

Social security experts say that the lost information will make it extremely difficult to check on each claimant. No serious attempt has been made to investigate them or find out if there has been a change in their condition over the past 14 years.

Opposition politicians expressed dismay at the error. Philip Hammond, the Shadow Work and Pensions Secretary, said: “This looks like yet another example of incompetence and mismanagement at the DWP. Taxpayers need to be sure that benefits go only to those who are entitled to them, otherwise confidence in the welfare state will be eroded.”

Danny Alexander, Liberal Democrat spokesman for work and pensions, said: “Not only does it question the competence of benefit administration, but it could also mean that some claimants are missing out on the full rate.”

The allowance, which is not means tested, is designed to help people with a health problem or disability. Claimants can work and still receive it. It has two components — mobility allowance and care allowance — and each is assessed according to the severity of the disability.

Last year David Blunkett, the former Secretary of State for Work and Pensions, expressed concern at the ease with which disability living allowance could be claimed fraudulently and announced a crackdown.

In June, Keith Jones, a professional boxer who had fought nearly 100 contests while claiming the allowance for chronic asthma, was found guilty of benefit fraud.

The number of people claiming the allowance has risen steadily since it was introduced in 1992.

Only 14,000 allowance cases, randomly selected by computer from the 2.8 million people who receive it, are reviewed each year.

The benefit can be either awarded indefinitely or for a fixed period. More than two thirds of those who are awarded it receive it indefinitely.

The Department for Work and Pensions maintains that some of the missing cases have been investigated but could not say how many.

A spokeswoman said that some of the cases could still be reviewed. “The disability would have been known to the decision-maker at the time the decision was made and would have been noted on the hard-copy file. These cases are subject to the same level of scrutiny as all other DLA cases,” she added.

“At any time a converted case is re-examined, our records are updated to record the main disabling condition.”

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