Benefit Fraud

August 10th, 2010

I’m not really that bothered about benefit fraud.

I can see that it is something that probably shouldn’t be encouraged but I don’t see it as something that we really need to get that hung up about. Most people that phoned a radio station this morning probably don’t agree with me.

I used to work for the Benefits Agency. The fraud team seemed fixated that they were some sort of special agents, they had radios.

They would spend months on surveillance, building a case to stop someone nicking  £30. It didn’t seem very cost effective.

This morning, or possibly last night, David Cameron announced a new “policy” to unleash bounty hunters on benefits “cheats”. This sounded quite exciting. The prospect of unleashing Dogg the Bounty Hunter on someone “doing a foreigner” (not a literal use of the term, but I rarely get to use it), seemed a bit over the top.

The reality is that it is just an excuse to bung more cash at credit reference agencies and give them access to more data to flog to companies. This is nice because credit reference agencies always have a hard time in a recession.

The way this has been represented seems to be the most interesting thing about it. The figure of £5.2 billion in fraud a year has been plastered over everything. This surprised me as I thought that fraud levels in previous years were much lower. I know we’ve had a recession but this would have been a massive increase in such a short time.

As you look at the story you notice that this figure is in fact fraud AND error. So it includes money paid to people by mistake. Though there doesn’t seem to be much interest in the press in the error part of it.

Finding Dave’s figures proved to be quite tricky. I couldn’t find anything that matched £5.2 billion but I did find the Department of Works and Pensions 2008/09 figures. They tell quite a different story. They say fraud and error account for £3.1 billion. So we have a discrepancy of over £2bn.

They also state that fraud accounts for one third of this total.

Over a billion quid in fraud is something that we should be interested in but it isn’t really the £5.2bn that started all this.

Listening to Five Live this morning you might have thought that most of the country were signing on whilst working. The DWPs own report estimates that Job Seekers Allowance fraud accounts for £240 million.

The report also highlights the £0.5bn that is underpaid to people each year. This again hasn’t been mentioned by the press.

Whilst looking for the figures I came across a press release from the Citizens Advice Bureau highlighting the £16 billion that is unclaimed each year. This is the real issue that should be of concern to us. This is a vast amount of money that should be paid to the most vulnerable in society but isn’t. These are winter fuel payments that play a vital role in keeping people alive.

Overall our current benefit bill is much lower than it should be.

That’s something to think about next time we make excuses to not chase the £40 billion that is avoided in tax each year.


Posted in Media, Politics | Comments (2)

2 Responses to “Benefit Fraud”

  1. Pete Lewis Says:

    Spot on Daz – I hadn’t seen the figure for the unclaimed benefit before (amazingly they don’t shout about that).

    Compare the figures here with the amount of tax money not being brought in by those in Jersey, Lichtenstein and all that, and it shows up that it really is the wrong problem. I’ve never understood why benefit “thieves” are seen as leechers when tax avoiders aren’t.

  2. Daz Says:

    The one thing to note about unclaimed benefit is that it includes heating payments and child benefit. Both of which are universal and as such have high levels of people refusing to claim them.

    There are still very high levels of benefits not claimed because people don’t know about them but not quite the level I put in the post.

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