Home > Coalition government, Conservative, Housing, Labour, Liberal Democrat, Public sector reform, UK Politics > Can the coalition benefit from benefit fraud?

Can the coalition benefit from benefit fraud?

Albert Einstein once said inanity was  “doing the same thing over and over again and expecting different results”.

David Cameron announced that he wants to tackle benefit fraud by maximising the use of credit reference agencies. Much of this has been done and is already being done. Cameron is doing a New Labour and re-announcing a policy pretty much in place already.

Social Security Benefits are already data matched against bank records, pay records, other social security records and NI records.

I will admit, in my own professional field I have had major concern with the data protection elements of this and in some previous contracts I have in the past stood up to the HMRC who have demanded data extracts from LAs because they had no lawful basis for the information requested. One of the points I made was that they themselves hardly had a good record of securing their own data.

Fighting fraud is all well and good, however success at finding fraud is often attacked by the newspapers and indeed the Parliamentary Committee and the Auditors responsible for looking after Social Security. If Anti Fraud Officers find more fraud, they get criticised for the amount of fraud in the system.

There used to be financial incentives for Councils to find fraud within the subsidy scheme paid to local authorities for administering Housing and Council Tax Benefit. As a result of those incentives Local Authorities hired lots of fraud officers. The newspapers reported the success of finding billions of fraud as an example of incompetence. Councils and indeed Ministers were made to look like incompetent doofs for letting the fraud through.

So Labour scrapped the financial incentives;  in fact these incentives have been replaced by subsidy penalties if the Council does find fraud. The penalties are supposedly to encourage Councils to recover the overpaid benefit from the fraudster.  However as a result of the penalties, Fraud officers were made redundant or relocated. So the figures for fraud found fell. The Daily Hate and indeed the pretty useless Parliamentary Select Committee cheered as stats showed “fraud and error” were being reduced. The money used previously as incentives for Councils to catch fraudsters – spent on nice expensive advertisements.

The logic; reduce crime by not investigating it. Put out scary ads to show how tough you are.

That benefit fraud hotline by the way used to be an advice line for claimants to seek information about getting their correct level of benefit. Oh well.

So the coalition can expect Experian etc to find lots of claimant fraud (maybe) but they need to realise that they way this will be reported will make them look like incompetent doofs (again). If the amount of fraud found increases, they need to understand that the way it will be reported will make them look incompetent.

They will also need to understand that this will be yet another data match project for Fraud Officers, who are already working on crap results obtained already from the DWP, HMRC and the Audit Commission data-matches. Data matching works, sort of. If you are being a dodgy twat you are likely to be caught. Your claim is already likely to have been flagged. It will just take time to get to you. This data-matching does however take away from real investigative work, which requires time, so the organised frauds from abroad and the multiple id frauds are not being investigated. This is made worse by prosecution targets. Fraud Officers can real claimants in all day, every day found through data-matches. Stupid government targets met. The big frauds, such as organised fraud from abroad and landlord fraud will have just one prosecution and will require time to investigate. So you can guess what happens.

More annoying for those in Benefits is that HMRC are especially bad at investigations. In part because they are paying a “tax credit” and not a benefit. Local Authorities and DWP Fraud investigators would simply love to do work on tax credit cases because they know so many are fraudulent. The government should allow them to. Doing so would make more sense than adding yet another database trawl to the powers of the State, but sometimes politics is not about sense, it is about what is sexy. Even if both Parties of this coalition and more importantly the Minister in charge of this, promised to clamp down on the database state.

As for punitive measures, that is really laughable. It is not as though the laws against Social Security Fraud are not tough. They are.The laws were pushed through by Peter Lilly after all. Quite simply, social Security is just not considered a big crime. Even if big frauds are found, the sentences tend to be suspended sentences at best and if the courts ask the fraudster to repay the overpayment, they often make them pay at the stunning rate of £1 per week. Not much of a disincentive.

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