By: Joanna Marchong, investigations campaign manager
The benefits system plays a part in most people’s lives at some point, whether it's small payments to help with heating homes, money to live on when in between jobs or the state pension. The system is designed to cater to the genuinely needy and those who can’t work anymore and provides a safety net so people won’t fall into absolute despair and poverty. It’s indicative of the generosity of British taxpayers. But the brutal reality is that there are many who are willing to exploit this generosity. And as proven in multiple stories, it’s a very lucrative business...
Benefit fraud in the UK is not just a criminal act; it’s an insult to every hardworking taxpayer who dutifully contributes to the welfare system, a system that caters to 22.4 million people. With the number of people on benefits steadily rising, the system has become bloated, and cracks have formed. Each year, billions of pounds are syphoned off by criminals with nowhere near enough being done to tackle those responsible. In the last two years alone, the government lost a staggering £6.4 billion and £6.5 billion, respectively, to benefit fraud. To put it in perspective, the average household will pay £1.2 million in taxes over their lifetime. It would take the lifetime tax bills of over 5,000 households to pay for just one year of benefit fraud.
It is hard to pin down a single solution to this significant and long-standing problem. Ministers have been drafting reports for decades, trying to find a way to crackdown on the problem. The sentiment in 2015 was that reform of the benefits system was the answer; we have seen this enacted with the introduction of Universal Tax Credit. But, of course, this wasn’t a silver bullet as the problem persists and grows. Focusing on the internal administration of payments may be much more worthwhile in terms of efficiency gains.
A fundamental overhaul of the administrative system is crucial. The next government needs to recognise the mistakes made by previous administrations for many years, letting these criminals take advantage of the system undetected for years before being caught. A rigorous system of checks will ensure the accuracy of benefits forms. Forms must be meticulously reviewed and verified before approval, and constant reevaluations should be in place to account for changes in recipients' circumstances. By establishing a robust system of verification and continuous monitoring, authorities can deter potential fraudsters and safeguard taxpayer money.
This proactive approach to maintaining the integrity of our welfare system seems like a no-brainer. But even this is met with scrutiny. The Department for Work and Pensions carried out tests with two banks to see whether their systems could help identify potential fraudsters. This partnership was successful with one bank being able to identify 60,000 benefit claimants who were breaking the rules. Some raise concerns about treating benefit claimants as potential criminals, but surely anyone claiming taxpayers' money should be subjected to some basic checks?
There will always be those in society who fancy trying their luck, but it is ultimately the responsibility of our government to make sure that our system is impenetrable or that the punishment for fleecing taxpayers is deterring. However, the government has historically viewed this issue as a low priority despite our regular complaints. It’s unlikely to lead any election campaigns. The process of taking a proactive approach and enacting internal changes is slow. Put simply, far too much of taxpayers' money has gone where it shouldn't – and too little where it should.