HUNDREDS of thousands of pounds of taxpayers’ money has been overpaid to benefits claimants in South Oxfordshire because of the failures of a private contractor charged with running council business.

Figures obtained by the Wallingford Herald reveal that multi-national firm Capita’s handling of the district council’s benefits system has led to overpayments of almost £1.5m. Much of the cash wrongly overpaid to claimants will never be recovered.

In a bid to improve the service, another £50,000 of taxpayers’ money was used to tackle the problems. The council has invoked penalty clauses in its contract with Capita.

An internal report said their recovery of wrongly-paid benefits was “very disappointing” and the firm needed to “raise its game”.

The company has been linked to a string of embarrassing failures since signing a wide-ranging contract to manage South Oxfordshire and Vale of White Horse district councils’ business in July 2006.

According to figures released to The Herald, Capita presided over 3,038 benefit overpayments, totalling £1,339,646.64, by April.

Although some of that money has been repaid, the debt has increased because of further mispayments, some of which the company blames on claimants not filling in the right paperwork.

The debt has risen to £1,480,736.74 across 3,258 different invoices. Arrangements are in place to collect just £630,111.11, much of it over many years.

Further debts are understood to have built up in the Vale of White Horse, where council officials were unable to provide figures.

South Oxfordshire District Council spokesman Olivia Bucknall said overpayments often had to be reclaimed at a rate of just a few pounds each week.

She said: “There are, therefore, many debtors whose arrangements mean that their debts will not be repaid for many years to come. We also have the issue of debtors for whom court action is no deterrent and those who simply disappear.

“The recovery of all these overpayments is an ongoing process which will never be at an end.”

Council leader Ann Ducker said: “This is not unique to this council. It’s been a national story for some time. If we go back in history, we had the same problems with (previous contractor) Liberata, and the same problems in house.

“The sums are looking rather large in comparison because more people are claiming more. The most important thing is that we’re not being complacent about it.”

Last week, Capita’s contract manager, Daren Keen, admitted to a council meeting that the level of overpayments had been “a bit of a mess”. He said: “In terms of overpayments, that’s not been a priority in terms of genuine customer service, which is making sure customers are getting their money when they need it.”

He said: “I can now concentrate right across the board on starting to clean up overpayments.

“There’s an awful lot of work and an awful lot of money still to collect. Some of these debts will take years to recover and there’s nothing I can do about it.”

The Taxpayers’ Alliance campaign director, Mark Wallace, said: “This is a huge amount of money to simply give away by mistake. Local taxpayers are struggling enough as it is, without Capita accidentally giving away a fortune on their behalf.

“The council should seek to recoup this money from Capita if they are responsible for mistakes.”