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Figures obtained by Willetts show that despite receiving nearly 1.7 million hits, the Targeting Fraud Web site resulted in only four prosecutions.
He said, "The new figures are devastating - they show very clearly that the Government's over-spun initiatives have had no real effect on the level of benefit fraud."
The Targeting Fraud Web site was launched by the then Department of Social Security in May 2000 as a confidential means of reporting benefit fraud over the Internet. However, Willetts' research suggests that, out of just under 12,000 suspected cases reported to the Web site, less than 700 investigations were completed by the authorities.
However, a spokesman for the Department for Work and Pensions stressed that there are many other elements to the Government's campaign to tackle the cheats. He said, "The Web site is only one part of our campaign against benefit fraud and it has been very successful in raising awareness. Anyone who wants to tip us off about suspected benefit fraud can also call our National Benefit Fraud Hotline."
The Government has already cut fraud and error in income support and jobseeker's allowance by 18% over the past three years, the official added.
Take-up of government Internet services by the public has come under increasing scrutiny over recent weeks. Last week, a report from the Commons Public Accounts Committee urged the Inland Revenue to improve the reliability and security of its e-services and offer greater incentives to users if take-up is to increase.
MPs warned that although the Inland Revenue plans to have all its services available electronically by 2005, it is unlikely to achieve its target of 50% take-up.