ABOUT £600m was lost last year to housing benefit cheats and through errors in processing claims, despite efforts to tackle the problem.

The figure was revealed by the Department of Work and Pensions (DWP) in a new report.

It is based on a random survey of 10,000 cases across the country of housing benefit fraud and error.

The DWP said the bill had actually been cut by £60m due to measures introduced by local authorities.

Government Anti-fraud Minister Chris Pond said the figures only covered the period up to March last year and there had been many improvements in preventing, detecting and deterring fraud since then.

Every council in North Yorkshire and the North-East has now applied for or received funding from the Government to put in place a Verification Network (VF) which sets out the information that must be collected and verified before benefit is paid.

It also specifies minimum standards of evidence and checks that must be made during the life of the claim.

Mr Pond said: "We will see further falls in housing benefit fraud and error as we move towards our target of a 25 per cent reduction by March 2006."

Paul Slocombe, director of resources at Middlesbrough Council, said technology used by local authorities to detect such benefit fraud was improving all the time.

He said: "That means that it's getting harder by the day for benefit cheats to hide, and those who are caught are finding a hardline approach is being taken."

A hotline number, (0800) 854440, is available for people to report on benefit cheats.