Wel-unfare: Benefit fraud, error and philanthropy

The issue of benefit fraud often receives some pretty harsh coverage in sections of the media and some politicians are also prone to making unhelpful statements about what is actually a very small minority of benefit recipients. What doesn’t receive as much coverage is the underclaiming of certain benefits and it is this issue that is the focus of this post. This post is also not a defence of fraudulent activity within the benefit system.

Fraud and Error

Fraud and error within the benefits system are often reported together, which many people have criticised as they are both separate issues. This way of doing things means that the figure reported for fraud and error is higher than that for fraud alone. According to a press release by the DWP on 23 February 2012 titled ‘Universal Credit – weapon against benefit fraudsters’ (my emphasis) the figures lost to fraud and error were as follows:

• £1.2 billion lost to fraud
• £1.3 billion lost to customer error
• £0.8 billion lost to official error

So error accounts for approximately 1.5 times as much lost as fraud with a total for the two combined of around £3.3.billion. The press release also documents new powers which will introduce tougher penalties for fraudsters. These figures and the press release were based on a lengthy report called ‘Fraud and Error in thew Benefit System’.

Benefit Fraud campaigns

The DWP also run a campaign to catch people attempting to defraud the benefits system. The campaign, which is as far as I can tell, the only one promoted on their website, is called ‘Benefit Thieves – it’s not if we catch you, it’s when’ which states that all ‘benefit fraud is benefit theft.’ Below are some images from the campaign.

The Sun has also started a ‘Beat the Cheat’ campaign recently and in December, Crimestoppers launched a campaign targeting benefit fraud called ‘Wel- un -Fare’, shown at the top of the post. This campaign received front page coverage in the Daily Express under the heading ‘New Blitz on Benefit Cheats’

Take up of Benefits 0r ‘Benefit Philanthropy’

On the same day that the Fraud and Error report was published, the DWP also published a report on ‘Estimate of Take-up in the benefit system’. This publication wasn’t, according to the DWP website, accompanied by a press-release. At 214 pages, it is a lengthy report but on page ii in the Executive Summary, the report notes that:

Taking all six income-related benefits together, there was between £7.52 billion and £12.31 billion left unclaimed in 2009-10; this compared to £40.56 billion that was claimed and represents take-up by expenditure of between about 77 per cent and 84 per cent. (my emphasis).

Unlike benefit fraud which costs approximately £1.2 billion, there are, to the best of my knowledge, no national campaigns or media coverage targeting what could be called ‘benefit philanthropists’ – those that do not claim or receive the £7-12 billion in benefits that they are entitled to. Incredibly, approximately 4 in ten people who are entitled to Jobseekers Allowance do not claim it. (This issue has been covered in a recent post on the Inequalities blog by Ben Blaumberg which can be found here). People who are unemployed are likely to be on some of the lowest incomes in our society and so, one would imagine, they meet the definition of the ‘most disadvantaged’ families or individuals that are mentioned 19 times in the government’s child poverty strategy.

Universal Credit is supposed to address some of the complexity in the benefits system that can put people off claiming and there are other issues around the stigmatization of claiming as well, but we shouldn’t wait until Univeral Credit is introduced to see this issue addressed. If this unclaimed money was received by the people entitled to it, it would almost certainly enter the economy and would probably not be put into savings accounts or investments. In 1909, Winston Churchill, talking about the benefits of the ‘old age pension’ said:

Nearly eight millions (pounds) of money are being sent circulating through unusual channels, long frozen by poverty in the homes of the poor, flowing through the little shops that cater to their needs, cementing again family unions which harsh fate was tearing asunder, uniting the wife to the husband and the parent to the child’

and Paul Spicker, more recently, made a similar point in a post about stimulating the economy on his blog. His post was about one-off aditional payments to certain recipients of benefits but the advantage of improving the flow of money to the poorest people remains the same. He said:

The distributive effect would be generally progressive (it could be made more progressive still if the payments are treated as taxable); and it would lead to an immediate, localised stimulus to spending that would fall roughly in proportion to the prevalence of deprivation.  And if such payments happened to do a little to alleviate child poverty, that is a side-effect I think we should be able to bear with equanimity.

A New Campaign?

Given that it looks unlikely that the popular media will start a campaign on this issue in the near future, I would like to ask if any of our readers have the capacity, resources and inclination to start or help with an on-line campaign highlighting benefit philanthropy or a new generation of ragged trousered philanthropists or something similar? I don’t have the necessary skill to do this but I’m sure it’s not a huge task for someone who knows their way around a computer and a social network site or two better than I do….

Please get in touch – or get parodying –  if you are interested…..

Best wishes,

Steve

Weekly Round up 09/03/2012

News in Brief

Welfare Reform

Wednesday saw the launch of a report to Save Child Benefit, organised by CPAG and the topic of child benefit occupied a lot of political comment this week. The Telegraph, The Spectator and The Guardian all offered views on the proposal to withdraw child benefit from higher rate taxpayers. You gov suggest that 68% of the population thought the new rules are unfair. Despite all of the column inches devoted to the subject, one of the most sensible and succinct offerings came online, via Paul Spicker’s Social Policy blog:

The main argument for cutting Child Benefit seems to be that it will help to cut the deficit. If the government wanted to increase the burden on richer families, it has the option of clawing back the benefit through the tax system. It would make more sense to tax all higher rate payers, rather than only those with children. If the government was serious about cutting the deficit, they would be raising tax. The fact they are not talking about raising tax is a strong indication that this is not really about balancing the books. They are focusing on public spending, which is quite a different issue.

Tax credits were also in the news this week with the announcement that some working families would be better off on benefits

The Welfare Reform Bill became law this week (not last week as I had reported here 7 days ago!!) and Iain Duncan Smith stated:

The Universal Credit will mean that work will pay for the first time, helping to lift people out of worklessness and the endless cycle of benefits. Whilst those people who need our help and support will know they will get it without question

The Sun has started a ‘Beat the Cheat’ campaign encouraging members of the public to telephone the benefit fraud hotline if they suspect someone of being a ‘fiddling scrounger’. An excellent post by Declan Gaffney on his L’Art Social blog and one on The Guardian Comment is Free site offered alternative views on the crack down on ‘benefit cheats’.

Child poverty stats

The Guardian and Experian released information ranking each local authority area in England against a  number of poverty indicators. Unfortuantely for the North East, each of the 2 Local Authorities in the region were placed in the top 70 (the top 20%) overall. Middlesbrough topped the list and South Tynseide also made it into the top ten. The Guardian also charted the decline of Middlesbrough using the tale of the Tuxedo Royale floating nightclub, pictured at the top of the post and well known to many in the region…

General comment

The Guardian reported on an IFS report that suggested that the poorest families were most affected by the austerity measures of the Coalition Government.

Alison Garnham, the Chief Executive of CPAG, gave an interview to Nursery World which can be found here

Signpost(s) of the week

A series of photographs in last weeks New Statesman depicting what life is like for a poor child in Britain today

The Feminisation of Poverty and the Myth of the Welfare Queen – an excellent article in the week of International Women’s Day.

Rafael Behr asked if Labour can start a different conversation about benefits

Graphic of the week

It has to be the interactive ‘poverty maps’ provided by The Guardian and Experian. Click on the maps below to take you to The Guardian website where you can see how your local area fared.

Weekly Round up 02/03/2012

News in Brief

Welfare Reform

The Welfare Reform Bill finally became law this week and was hailed by David Cameron with predictably robust language:

‘These reforms will change lives for the better, giving people the help they need, while backing individual responsibility so that they can escape poverty, not be trapped in it. ‘Past governments have talked about reform, while watching the benefits bill sky-rocket and generations languish on the dole and dependency. This Government is delivering it. ‘Our new law will mark the end of the culture that said a life on benefits was an acceptable alternative to work.’

A letter to The Guardian earlier in the week had pointed out that ‘over the last 40 years unemployment benefit has been cut by 50% as a proportion of average earnings, to just 10%’ and that, out of 27 EU countries, only Estonia had a higher level of poverty amongst unemployed people than the UK and the BBC reported that the welfare reforms would mean an extra 6,000 children living in poverty in Wales next year alone.

Next week sees the launch of a report to Save Child Benefit, organised by CPAG.

Childcare costs

The Daycare Trust published the findings of a survey in a report on Monday looking at the rising cost of childcare that received widespread media coverage including in The Telegraph, The Huffington Post and The Independent.

Child poverty measure

It was reported that Nick Clegg and Sarah Teather had to block plans by senior Conservatives to scrap the 60% relative poverty measure. Downing Street suggested that measuring poverty using a relative measure was ‘a narrow approach that can fail to tackle deep-seated problems’

Employment

The CIPD suggested that there was no need to cut employment rights to stimulate the labour market, in direct contrast to a claim made in The Telegraph last week and Daniel Knowles identified that low pay was as much of a problem as unemployment, also in The Telegraph. Meanwhile, David Cameron suggested that business could help ‘smash poverty’

Signpost(s) of the week

A special pullout in the New Statesman from last week, looking specifically at different approahces to tackling child poverty is now available on the Webb Memorial Trust wesbite.

A very interesting post looking at the impact of stress on parenting, especially in low-income families

An article in The Week suggested 3 ways to fix America’s child poverty problem

Graphic of the week

The DWP published figures for the cost of fraud and error earlier this month and this graphic shows the relatively small amount lost to benefit fraud (in pink in the image) in comparison to fraud elsewhere in the system. Benefit fraud accounts for approximately £1 billion out of a total of approx £21 billion, with tax evasion costing approximately £7 billion. The midweek post next week will be on the portrayal of benefit fraud and error and we may be asking for your help with some suggestions for a social marketing campaign.

Breakdown of Public Sector Fraud Loss

Best wishes,

Steve

Weekly Round up 24/02/2012

News in Brief

Lots of new developments on the Welfare reform front again this week and the issues surrounding various work related programmes and the allegations regarding A4E are well documented elsewhere so we’ll try and leave these well alone. There’s plenty of other things of interest.

The DWP issued statistics on the amount of money lost through fraud and error this week, choosing to issue a press release which focused on fraud despite error costing 1.5 times as much. DWP also published information on the amount of benefits unclaimed during 2009/10 . No press release accompanied this information despite an estimated £7-£12 billion worth of benefits going unclaimed. Fraud was estimated to cost only £1.2 billion.

At the top of this post is an image from a campaign to crack down on ‘benefit thieves’. I couldn’t find an image or a campaign relating to unclaimed benefits – maybe we could start one around ‘benefit philanthropy’?

Child benefit changes were back in the news with a Conservative MP claiming the policy to withdraw the benefit from higher rate taxpayers is ‘in serious trouble’   whilst Janet Daley, in The Telegraph, questioned the planning behind the policy

Local firm Greggs have made the news on a couple of occasions recently, firstly as a result of a considered response to a letter regarding their participation in the voluntary Work Experience scheme and then when the Chief Executive Sir Ken McMeikan voiced some concerns over elements of the programmes. The former Chief Exec of Greggs, Sir Mike Darrington, also made the news when he spoke out against executive pay

Employment

Sunderland was identified as the 3rd worst city in which to find a job this week and whilst most attention has been focused on work experience, placement programmes and ‘jobsnobs’, Daniel Knowles identified a broken training system as the real problem and Jeremy Warner suggested firms would hire more workers if we ‘make it easier to fire them’

Campaigns

Newcastle CVS and VONNE published the findings from their Surviving not Thriving survey focussing on Newcastle’s voluntary sector. The report highlighted that 20% of respondents thought that they may close within 12 months

General comment

The Mirror highlighted a Barnardo’s report which demonstrated the choices people on low incomes are forced to make

A very interesting BBC report highlighted the ‘history of distrust of disability’

Two articles in The Guardian – one by Suzanne Moore on how we, as a society, appear to be disgusted by poor people, rather than poverty and one by Barbara Ellen which suggested that today, poverty not had only to be proved but also had to ‘be highly visible and in an almost theatrical way’

Finally, Neil Davenport suggested that ‘maybe the jobless should get on their bikes’ on Spiked Online

Signpost(s) of the week

The ever excellent Inequalities Blog have posted a number of interesting articles recently but this one in particular caught my eye – disspelling the myth of families that have never worked

Graphic of the week

The number of part time workers who can’t find a full-time job is at its highest leevvl since records began. This is particularly worrying given what we already know about in-work poverty, forthcoming changes to the tax-credit system and the potential to extend conditionality to those people already in work. The chart below is from The New Statesman blog and was compiled using stats from the Labour Force Survey