From the TUC

Benefit fraud: no justification for maligning claimants

29 Mar 2011, by in Society & Welfare

Less than one per cent of the benefit bill is lost to fraud and that proportion is significantly lower than it was ten years ago. I’m willing to bet a small sum that that’s a headline you won’t see in any of the right-leaning newspapers. Its certainly the case that there’s been no publicity so far for the Department of Work and Pensions’ Fraud and Error in the Benefit System, new out today.

You may remember that in his Spending Review speech last year, the Chancellor said:

Nor will fraud in the welfare system be tolerated anymore.

We estimate that £5 billion is being lost this way each year.

George Osborne isn’t alone in claiming this. In his forword to the DWP’s anti-fraud strategy, Lord Freud said:

This document sets out a radical new approach for addressing welfare fraud and error, which now costs the taxpayer £5.2 billion pounds every year, or £165 every second.

So I suppose we can’t really blame journalists for using this £5 billion figure afround repeatedly. As I’ve said before, this is the combined figure for fraud and error and it is (on a generous reading) a terrible mistake to quote it as the cost of fraud.

Today’s figures confirm this. They show the total figure for benefit overpayments is £3.3 billion. (Last year’s estimate for the equivalent figure for tax credits was £2.1 billion, which would bring the “welfare” total to £5.4 billion.) Since last year’s Fraud and Error report the cash value has risen from £2.9 billion; this is entirely due to the increase in total benefit spending, the proportion of total spending accounted for by overpayments remains the same, at 2.2 per cent. There is no excuse for reporting the cash increase without mentioning this, it is a prominent point in the Executive Summary.

Just 0.8 per cent of benefit expenditure is lost to fraud,totalling £1.1 billion. 1.4 per cent (£2.2 billion) is lost to customer and official error.

Customers are underpaid £1.3 billion due to customer and official error.

There is no evidence that the level of fraud is rising. The 0.8 per cent  estimate in this year’s report is the same as the estimate for 12 months previously. There was a significantly higher level of raud at the start of the noughties – one of the Department’s successes has been to bring this down:

(The Department’s methodology for estimating overpayments changed after 2004/5, but the net impact will have reduced the level of estimated fraud by less than £100 million. In any case, the Department’s progress on managing fraud clearly began before this change.)

Fraud is an important issue; 0.8 per cent of total spending may be quite a small proportion, but £1.1 bn is a lot of cash. Every pound lost to fraud is a pound that cannot be spent on the purposes benefits were designed for and it is important that the system should be policed.

But it is still important to keep this in perspective. Some newspapers suggest that most or many claims are fraudulent, that because of this our taxes are wasted when they are spent on benefits and claimants don’t deserve any sympathy. Ministers of both parties have repeatedly used tough talk about fraud to appeal to the populist constituency these reports have created.

That is why today’s report deserves a much wider audience.

10 Responses to Benefit fraud: no justification for maligning claimants

  1. angelica
    Mar 29th 2011, 1:33 pm

    But it’s also worth talking about what that fraud actually means. Again going back to their own investigations, the vast majority of fraud isn’t perpetrated by the people portrayed on the front of the Daily Mail – it’s mostly people who are actually in fairly desperate circumstances, defrauding the system in petty ways because it’s failing to adequately meet their basic needs.

  2. Hindle-a
    Mar 29th 2011, 2:13 pm

    Quite clearly the Government wishes to propagate the myth of widespread fraud -they wish to dissuade people from claiming and be grateful for any entitlement which they receive,with particular regard to DLA-which has the least fraud associated with it -they regularly contrast tax-payers and benefit recipients as if two mutually exclusive groups-these are people that claim hundreds of pounds on one taxi-fare and seek to remove the mobility component of DLA for residents/residential school attendees- they are the fraudsters- they are the rats.

  3. Dek
    Mar 29th 2011, 6:20 pm

    It’s not only the media and Government who are targeting people on benefit. I accuse the DWP of being institutionally prejudiced against the sick and disabled of this country. The very people who are EMPLOYED to be of assistance to those of us who need help to have any semblance of a life are encouraged to find us guilty of fraud until we can prove our innocence!

  4. lind s
    Mar 29th 2011, 7:11 pm

    Yet more lies by the government/media (can we separate them anymore?)
    - more and more people are ACTUALLY ill and entitled to benefits- it is difficult enough living in this society as a disabled person, let alone having to deal with fear/forms/judgements and `jumping` through hoops liked a trained animal to get a reward biscuit.

  5. Ken Walters
    Mar 30th 2011, 7:05 am

    How many remember Cameron saying he’d make Britain more like America? well this making benefit claimants feel guilty, and making benefits a dirty word is the American way.
    The truth about the figures won’t be read by the brainwashed, who read the kind of rags that preach about benefit fraud with incorrect figures. Mud has been thrown and much of it will stick.
    If Cameron had to keep to accurate figures, he’d get confused quickly trying to find new ways to deride benefit claimants. Using rounded off figures sticks in the mind, i.e £5billion is more memorable than £4.732 billion. I’ll bet that Cameron isn’t even aware that he’s using fake figures, he’s not the brain running things, he’s the puppet mouthing his lines.

  6. Clare Fernyhough
    Mar 31st 2011, 10:33 am

    I’ve been ill for 14 years and it’s become progressively worse. I learned at the beginning firstly that limited help was available to me and that there was a stigma involved in claiming.

    Although almost incapable of work initially, after 18 months I was so desperate to escape the stigma in my community and the abject poverty that ensued that I was forced to work. A cycle of work/illness becomes worse/claim/poverty/work started. Each time I finished work my illness was much worse than before, and now I am generally housebound. I was in the strangest position of being entitled to help with all sorts of things as an ill working person, but I was not entitled to disability benefits.

    During this time I found out first hand how predjudiced all sorts of people are concerning benefit claimants. I took a degree thinking that I would find work that was easier. At university, your department is supposed to make allowances for someone who has evidenced a disability. Although some lecturers did facilitate such help, others did not, even screaming and shouting at you for even asking for the help which you were entitled to. One of them nearly wrecked my chances of gaining my degree in the final year of study. Afterwards, I was allowed taxi fares to get me to and from work via the ‘access to work’ programme. Sometimes I would travel big distances, and certain taxi drivers would ask me how I could afford to take a taxi so I told them about my allowance. Some of them ‘told me off’, and say that it shouldn’t be allowed. When I finally did gain DLA (after social services intervention), friends told me off since they didn’t think a disabled person should have what they saw as an ‘advantage’ over an able bodied person. Hardly any allowances were made for me at my various places of work over the years. I have felt shocked at how regularly peoples’ attitudes toward benefit claimants surface.

    I could provide many more proofs, but the point I’m making primarily is that I have often felt surrounded by predjudice whether in work or not. The warped media reports and the misinformation successive governments provide to the public play a large part in this.

    For example, due to the changes in Housing Benefit and the forthcoming changes to disability benefits, I may well lose my home of 24 years; in desperation I have written letters to housing federations and others. They want to use my circumstances as a ‘case study’, which I have agreed to, but I have had to ask them not to use my name. The overiding reason for this is that I am afraid of people in my community finding out because I know how bigoted people can be, that some would specifically try to make trouble for me if they could. It would only take one phone call where misinformation was provided and meantime my benefits could be completely frozen whilst it is being sorted out. It has happened to other people and even when the allegations have proved false, the benefits are not backpayed, and as a result people have become deeply in debt with rent and utilities.

    Many hundreds of thousands of people, if not millions, who are capable of work will end up on JSA along with the genuinely disabled because of this government’s fiscal policy: there will never be enough jobs for all of these people. Many of them will have no private means to fall back on and so they will become desperate. Meanwhile, the public will ‘lap it up’ and say that we all got our ‘just deserts’; they’re already saying as much now when they comment on newspaper websites and forums. Tensions will rise between a misguided public who believe the propogands and the ever increasing number of those who are made destitute and homeless: it will surely only lead to civil unrest.

    I have been through so much distress over the years with regard to benefits, having to get to breaking point physically and mentally before I was finally granted the support I needed. It is no real solution however. At any time I could lose all the support again, and few people would care since they have a skewed viewpoint informed by inaccurate and sensationalist media reporting.

    So I live in a state of constant fear, which doesn’t ‘benefit’ my illness at all. One thing I do know is that I can’t face deprivation again; my body won’t take another bout of starvation and living with no lights and central heating, which is what will happen if I like many others are forced onto JSA whether they are capable of working or not: I would rather be dead, and many disabled people feel the same.

  7. Hindle-a
    Apr 1st 2011, 12:03 am

    In reply to Clare-your experiences highlight to me-the insanity of Governmental policies and the attitudes of some people towards people with disabilities-which feed off each other-they state that they are happy to protect the genuine and vulnerable-what they mean is they get a kick out of feeling superior by making such people they deem such as beholden to such generosity-thus you attempted to gain and maintain employment and thus besmirched as you cannot be genuine and vulnerable enough to receive support to that end-castigated as receiving favourable support at their expense,on receivership of benefits you continually have to pass the test of being worthy of such entitlements-if you fit an ever restricted view of worthiness the best afforded is a patronising attitude the worst continual suspicion.if you fail you deserve nought and the cycle continues-IDS -words fail me -he cannot see the problem of repeatedly assessing ill/disabled people and not see how it such circumstances this gosh may lessen the chance of correct decisions and people obviously entitled not even prepared to endure the process and worsening their conditions-this is deemed by their corrupt logic as must not need it.REGARDS.

  8. John
    Apr 4th 2011, 5:15 pm

    Interesting issues raised here. I was a Benefit Fraud Investigator for some 25 years, both with the DWP nad a couple of Local Authorities.
    Now before you start typing a comment please read this carefully.
    In ALL of my time as an Investigator I came across some real hard luck stories and could relate to them fairly well, indeed if I found some one not claiming a particular benefit I made every effort to ensure they did. I have also had the un-enviable job of investigating pensioners who had unreported private pensions, but almost 30% were not getting their private pension and I made sure that I found where the pension was located and assisted in making sure that they got both their lump sums and yearly amount.
    I hasten to say that I am NOT a saint, I just wanted people to be treated properly.
    Howver I have come across a lot of greedy thieves, who take money from a system that is full of holes and they are exploited not just by the ‘hardline unemployed’ but by very skilled criminal gangs, so you can winge on about the government trying to get people off of benefits, but they are trying to combat a very difficult problem. The figure given for fraud is estimated on that uncovered, but work in the Welfare System long enough and you know that this is an under estimation, there is only limited resourses thrown at fraud investigation and obviously a lot of ‘fraud allegations’ are not followed up, so I would suggest that this would point to an under estimation.
    The real issue is that if the figures quoted are to be believed then how does the DWP manage to payout over three billion pounds by ‘mistake’?
    Couple of thoughts to leave you with:
    1. Have a look at the Draft White Paper relating to Universal Credit which will be with us in the next couple of years.
    2. Look at the legislation under which people are prosecuted, especially Section 112 of the Social Security Administration Act 1992. Its a ‘Strict Liability Offence’ ask yourself if it should be classed as committing fraud, when it could be a simple mistake or a lack of understanding?

    Thank you for your time, now you can start typing!

  9. Hindle-a
    Apr 5th 2011, 3:39 pm

    John-Very skilled criminal gangs,most fraud associated with pensioners-totally agree-far more left unclaimed -again agree-however all Governmental actions in redefining benefits/allowances and disability itself and then stating it is fraud is wrong as is the well-placed lies and distortions in the media-deliberately confusing/conflating IB/ESA and DLA as a common example to engender suspicion-encouraging people with no idea about benefits/allowances and/or disability- to report “fraud”-80% are malicious -they have no concern with ensuring that people receive what they are entitled to and instructing officials to endeavour to obstruct genuine claims-the fraudsters will be OK-the genuine will suffer.

TUC