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Benefit fraud – Cameron’s bluster vs Duncan Smith’s nuance

Wednesday, August 11th, 2010

Cameron’s blustering attack on people committing benefit fraud yesterday highlighted the growing gap between Iain Duncan Smith’s increasingly nuanced line on the issue and the rest of government’s determination to milk the potential of a ‘government cracks down on benefit cheats’ headline for all it’s worth.

After much concerted lobbying from Community Links, as part of our Need not Greed campaign, we were delighted to see DWP’s 21st Century Welfare paper include the paragraph:

“As a result [of the complexity of the benefits system] working legitimately is not a rational choice for many poor people to make. Fraud is always wrong, but we must recognise that the benefits system is making matters worse by pushing valuable work, and the aspiration that this can engender, underground.”

This complexity in the system also ensures that twice as much is lost each year in error as is lost to fraud. Tackling these real problems within the system will ultimately be far more successful at bringing down the welfare bill than pandering to prejudice against benefit claimants.

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Posted in Benefits, Informal Economy, Welfare | 1 Comment »

Benefit fraud crackdown – we’ve heard this all before

Tuesday, August 10th, 2010

Government’s latest wearily predictable spate of bullying the most vulnerable in society for cheap political gain – or ‘cracking down on benefit fraud’ as they prefer to call it – is as tiresome and damaging as ever.

As many have already pointed out, the £5.2bn figure being bandied around is for fraud and error, with error (£3.7bn) far outweighing fraud (£1.5bn). Cameron would claim he has said that all along, but his spin has been enough to deceive the Telegraph, who this morning were claiming that “Mr Cameron discloses that £5.2billion of the £87billion welfare budget is lost to fraudulent claims for tax credit and welfare, while administrative error wastes £1.6billion.”

Secondly, the latest figures I have (for 2006/7) show that 6,756 were successfully prosecuted, a further 12,000 were cautioned, 10,000 received an administrative penalty, 95,000 had their benefit changed but weren’t deemed to have done anything serious enough to warrant any kind of sanction, leaving an enormous 196,000 people who experienced a hugely stressful investigation and were found to have done nothing wrong.

We regularly talk to terrified people who are about to be hauled in front of a Jobcentre advisor and quizzed about their claim. Their only source of income is at risk – that five minute interview could mean the difference between scraping by and being plunge into destitution. And they might only be there because a neighbour has fallen out with them and phoned the benefit fraud hotline, or they had a bit of paint on their hands at their last interview. These advisors, don’t forget, are the same people who are supposed to be supporting people into work.

Even those who are defrauding the system usually do so out of need, not greed – scraping together enough for Christmas or paying for repair of a boiler through a bit of informal work, for example. The structural problems with the benefits system that Iain Duncan Smith has identified, the ones which make it very hard to get into work and render the system so complex it borders on incomprehensible, must shoulder the blame for all the error and most of the fraud. The few cases of blatant greed make the headlines, but don’t reflect the reality for people we see.

If I was Iain Duncan Smith this morning, I would be annoyed. His plans for welfare reform might be uncosted so far and might never make it past the Treasury, but they do represent a thoughtful and detailed attempt to address some of the more nuanced problems with the benefits system. Cameron’s announcement today, on the other hand, is crude, callous politics of the very worst kind – the age-old trick of bullying those least able to defend themselves to unite the rest in opposition. It’s a trick every government tries, usually with asylum seekers, poor migrants, and benefit claimants.

Before he became party leader, Cameron visited Community Links. The invitation is always open should he wish to return. But if he does so, I’ll make sure he spends a day behind the desk at our New Deal project – the most successful in London and the South East – talking to our advisors about the reality of being on benefits and looking for work. Hopefully he’d think twice before picking on people again.

Lastly, as many people have pointed out, don’t forget about the £70bn in tax evaded each year. Cameron said today that, ‘at a time when we’re having to take such difficult decisions about how to cut back without damaging the things that matter the most, we should strain every sinew to cut error, waste and fraud…’ in the tax system?

UPDATE: My colleague has pointed out the following line from DWP’s 21st Century Welfare paper last week:

“As a result, working legitimately is not a rational choice for many poor people to make. Fraud is always wrong, but we must recognise that the benefits system is making matters worse by pushing valuable work, and the aspiration that this can engender, underground.”

Perhaps someone should tell Cameron…

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Posted in Benefits, Informal Economy, Welfare | 3 Comments »

People working informally need support not stigma

Monday, March 15th, 2010

Anne Stewart works at Church Action on Poverty’s Community Pride Unit, who have done a lot of work looking at the informal economy in the area around Manchester. They are part of Community Links’ Need not Greed campaign.

In a report published by Community Pride in 2008 called Invisible Workers, it was clear that lots of people in many of our inner-city communities are actually working! The reasons they are working ‘informally’ are many and varied. The key issue is that people simply do not have enough to live on and have to find ways of surviving and sustaining each other.

(more…)

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Posted in Working age poverty | No Comments »

Welfare Commission: humanising decision making and appeals in the benefits system

Tuesday, February 9th, 2010

Today the Department for Work and Pensions Select Committee publishes its report on decision making and appeals in the benefits system, the headline press coverage reports that overpayments due to error had soared from £400 million in 2000, while overpayments due to fraud and mistakes by claimants dropped. As part of the solution the select Committee is calling for a Welfare Commission to be set up to simplify the benefits system. We welcome this news and believe that any redesign should place a one-to-one service to claimants at its heart; ensuring efficient and humanised service delivery. We have a few specific recommendations for the Commission to consider

  • Reduce the complexity of claim forms,
  • Make crisis loans more accessible and immediate,
  • Addresses the inconsistency of the earnings disregard across all benefits to ensure accidental fraud is not committed resulting in benefits being automatically stopped.

Last year the Community Links advice services were used by a total of 12,400 local people. At our drop-in advice sessions 37.8% were benefits related cases, of which 73% were a result of DWP error. Our advice services continue to be in high demand, services cost several hundred thousand pounds per year – funded by local authorities and the Legal Services Commission. This cost to the tax payer could be dramatically reduced by the simplification of the benefits system and increased competency with the administration process.

Research by AdviceUK in Nottingham reveals that 42% of the demand at advice agencies in the city is ‘failure demand’ – demand caused by failures in the system of public administration. Reducing this would save significant amounts of money and free up advisors to carry out valuable work with clients, supporting them to resolve their long-term problems.

Many of our clients have used our advice services in the past; some have had their benefits mistakenly stopped on more than one occasion. The knock-on effects are increased borrowing and debt, eviction problems and in many cases people falling into the informal economy, working cash-in-hand to cover costs as a last resort. Debt related advice has doubled, and our advisers believe this is in part due to the recession-related rise in claimant figures, and benefits being stopped or delayed as people struggle to find formal work.

Our campaign, Need NOT Greed has been calling for a simplified benefits system. A system which is easier to navigate could help prevent the rise of informal economic activity caused by people struggling to survive poverty. At the launch of the Need NOT Greed campaign in February 2009 Terry Rooney, chair of the DWP select committee said

“There is a treadmill of being in the informal economy out of Need NOT Greed. The striking thing is that the national benefits system is geared up to serve millions, but everybody is an individual – it’s how you can recognise everyone’s needs and requirements. You need a totalitarian system and there are enormous challenges – but ones that need to be faced and met.”

A local campaigner and user of our advice services said

“the system wears you down, I am constantly just surviving. Every time you pick yourself up and try to move forward the system lets you down again. It’s the same old problems for everyone and none of us round here trust it anymore. How can something you don’t trust be able to help you?”

Rising unemployment is increasing demand for welfare benefits at a time when public funding is under severe pressure. Spending time building productive relationships with people using services is time well spent; not an extravagance. These relationships are instrumental to efficient delivery of public services. We hope that a Welfare Commission is established as it is evident that change is necessary – but change must put the needs of the service user at the heart of the system.

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Posted in Benefits, Communication, Informal Economy, News, Regeneration, Research, Welfare, debt, employment | 2 Comments »

Community Links advises government on hidden economy

Tuesday, January 5th, 2010

HM TreasuryThe formation of a Hidden Economy Advisory Group was announced in last month’s pre-budget report, and now HMRC have released some more details.

Community Links accepted an invitation to be part of the group; we have lobbied for its creation for many years.

As a community organisation based in east London, we have provided support and advice to local people for over 30 years. We soon realised that many of the people accessing our services were working cash-in-hand, or informally, some while on benefits. We realised that most were doing so because the system was not supporting them sufficiently and they needed the money, not because they wanted to defraud the taxpayer. They told us how the benefit system and low-paid work often left them with little choice but to work informally, and how people are exploited as the cash-in-hand jobs available are usually low-paid and insecure. And we discovered that although the majority would have liked to formalise their work, there are innumerable barriers to doing so – low wages, inflexible rules, low benefit rates.

In the last 10 years we have conducted in-depth research into the issue, measuring its extent in boroughs across London, and latterly across the UK, as well as delving deeper into why people work cash-in-hand, how it impacts on them, and how they can formalise. We have built up a reputation as one of the few organisations in the UK with expertise in this area, and in the last two years our Need NOT Greed campaign has approached government, not being afraid to tell them what’s wrong, while offering sometimes radical solutions.

Throughout our work we are motivated by the desire to help people help themselves out of poverty. We believe that in the majority of cases cash-in-hand work keeps people poor, trapping them in low-paid and insecure work, and often shutting off the prospect of better jobs. And so we’re very keen to help shape measures that might allow people to formalise their work, or remove the need for people to work cash-in-hand in the first place. HMRC are motivated by the estimated £3bn in unpaid taxes by those working in the hidden economy, whereas we are motivated by the prospect of a better life for the people coming through our doors every day. In this instance we believe the two aims coincide – the best way to increase tax revenues is to remove the need for cash-in-hand work, and allow those working cash-in-hand to easily formalise.

I look forward to working closely with the group over the next few months. I want to ensure that we do not demonise those working informally but recognise the complex reasons behind their work, and that our practical and policy solutions reflect the lives of those working cash-in-hand across the country.

Our Social Change Series 3: the informal economy provides an overview of our research and recommendations to date.

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Posted in Benefits, Informal Economy, Regeneration, employment | No Comments »

What happened when Melanie Phillips met real people on benefits

Tuesday, January 5th, 2010

Last night was the first of Melanie Phillips’ two programmes on the ‘British work ethic’ on Radio 4, (listen on iplayer for the next week), which she also described in her column. I was particularly interested because we declined an invitation to help in the making of the programme, but also for her reactions to those people, struggling on benefits, who she met.

It’s very hard making judgements about other people, because there’s always a tendency to forget all the ways in which their life is different from yours. I got the impression that before the programme Phillips imagined people on benefits were mostly lazy versions of herself, with her access to money, support, education, social networks, and her ‘middle class elbows’.

She didn’t realise, for example, that people might not travel outside their town for work because they just couldn’t afford the bus fare. Or that a man might not challenge his doctor over a diagnosis that had left him in pain and on a cocktail of pills for many years. To her credit, in both these situations she admitted to having had her eyes opened. But these are just two examples, and there must be many other ways in which her eyes are still closed.

I’m still not sure she realises, for example, what it might feel like to apply for a low-paid, no-skilled, unbelievably dull job with no chance of progression and the prospect of years spent doing it. She dismisses a young man’s assertion that he wants to do an interesting job with fairly casual disdain, but is it really too much to ask, or atleast aspire to? The problem, perhaps, is that he has no idea how he could progress from an entry-level job into a more interesting one, or even what jobs might interest him. He needs access to jobs and support just as much as the man on incapacity benefit, and far less than Phillips probably did at his age. I’d be interested to hear what he thought of her portrayal of him in the programme.

I don’t want to be too harsh though – her column today shows admirable recognition of many of the problems of the benefits system. And to a great extent we all share the difficulty of truly putting ourselves in someone else’s shoes, rather than just imagining ourselves standing where they are.

In her column she notes that ‘not surprisingly, no one who was on the fiddle agreed to speak to me.’ Our Need NOT Greed campaign works with many people she’d consider ‘on the fiddle’, and we hope she’d be surprised to find that, again, it’s usually the system rather than individuals’ failings that forces them into it. For example, as we highlighted last year, people on Jobseekers Allowance who get a part-time job are only allowed to keep £5 of their wages. In this situation, can you blame someone for not declaring their work? In our experience, informal work is a great sign that people want and are able to work – we now needs a system that makes it worthwhile doing it legally.

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Posted in Benefits, Communication, Informal Economy, Welfare | 1 Comment »

A Year of Social Change

Tuesday, December 22nd, 2009

As we reach the end of 2009 the national team at Community Links have been reflecting on the last year … and begining to plan for 2010.

In 2009 Community Links has seen more and more people come through our doors, as people struggle and demand for our services increased. In Newham Community Links  carried on running much needed local services -  youth clubs, the New Deal, our own school, provided advice and support to families struggling with debt and welfare, and much more. And we’ve continued to share our learning nationally, achieving considerable success.

Projects that our national team have worked on this year include
The Parliamentary launch of our Need NOT Greed Campaign in February, to the National Talent Bank in June, Chain Reaction in November,  including the launch of three more Council on Social Action reports and much else besides.

We have produced a short report on our activities: you can read it here.

To all those with whom we’ve worked, a warm thank you. To those with whom we haven’t, how about next year? The election, unprecedented regeneration, the European Year Against Poverty all provide us with enormous opportunities for social change. We look forward to seizing that moment with you.

Wishing you a peaceful Christmas and a joyful New Year
The Community Links national team.

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Posted in Benefits, Child Poverty, Communication, Council on Social Action, Informal Economy, Innovation | No Comments »

£5 earnings cap traps people on benefits

Friday, December 4th, 2009

Today saw the launch of our Need Not Greed campaign’s demand for the earnings limit on Jobseekers Allowance to go up from £5 to £50. It was discussed on the Today Programme (mp3), and Nicola Smith of the TUC gave a great interview on BBC Radio 5 Breakfast (mp3).

People on JSA face a £5 cap (or ‘earnings disregard’) on the amount they can keep each week when they get any kind of paid work. Above this amount, benefits are deducted at the same rate as earnings, which means claimants who take on part time or occasional work are often little better off.

Our experience shows that this low cap on earnings often removes the incentive to take the first step back into work and can push people into illegal cash-in-hand jobs.

The £5 cap was set in 1988 and has never been raised. We argue that raising it to £50 a week would immediately allow people on JSA an easier route back into work. It would allow them to take on a few hours of temporary work to build up experience, and give people more flexibility when moving off benefits.

At the moment, many people getting these kinds of jobs do not tell the jobcentre, knowing that doing so would jeopardise their income. In doing so however, they’re breaking the law.

However, increasing the Earnings Disregard alone is not enough. We’re asking for this now as a measure which could be quickly implemented and make a large difference to the lives of people trying to move off JSA. In the end nothing but a complete overhaul of the benefits system would really allow people to make that smooth transistion off benefits and into work.

To find out more, you can download a briefing paper about the campaign or visit the Need NOT Greed website.

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Posted in Benefits, Informal Economy, News, Welfare | 1 Comment »

A partnership of equals to tackle Child Poverty

Tuesday, December 1st, 2009

Speaking at the Conference Into 2010 The European Year Against Poverty Financial Secretary to the Treasury Stephen Timms MP called on campaigners, community organisations and faith groups to join local and national government in a “partnership of equals” to end child poverty over the next 10 years.

He reaffirmed the government’s commitment to end child poverty by 2020 and outlined the significant progress that has been made over the last decade but he accepted that much more needed to be done if the target is to be reached.

The focus on poverty across Eurpoe offered by the European Year Against Poverty will provide an opportunity to develop existing work both in government and at the grass roots level which will help to build a movement to really push on and meet the target Stephen Timms said.

Speaking at the same event Jean Lambert MEP was perhaps less positive about the likliehood of real progress through legislation – but again talked about the progress that can be made through community based campaigns and projects such as London Citizens. She spoke about the need for a welfare benefit sytem to reflect the real situation experienced by communities experiencing unemployment and the challenges of the global recession. Significantly she called for strutural causes of inequality to be considered at the European level – not just responding to the effects.

A greater equality of income was an emerging theme in the discussion and will be something we will be considering in further blog posts over the coming months.

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Posted in Child Poverty, Community Engagement, News, employment | No Comments »

Just the beginning for welfare reform

Wednesday, November 25th, 2009

Despite the Welfare Reform Bill passing into a law a couple of weeks ago, there seems fairly universal acceptance that there’s still a lot of welfare reforming to be done (including, some would argue, undoing the damage done by the most recent set of reforms).

The questions left are around the direction of future reform, its scale, and its timing.

Is it going to be, as Faisel Rahman persuasively argues it should in today’s Guardian, positive reform – harnessing people’s desire for work, treating people on benefits as contributors, removing the barriers in the current system? Or is it going to be negative, increasingly punitive and stigmatising towards those on benefits?

Will it happen piecemeal – raising the earnings disregard one year, changing the rules for lone parents on Jobseekers Allowance the next? Or will there be wholesale reform, like that proposed by the Centre for Social Justice?

And will it happen in a few months, a few years, or a few slow decades? We’d certainly like to see some immediate smaller changes that this government could still bring in and which would make a big difference – we’ll be saying more about that next week. But in the long run we’re hoping, and arguing, for the need for wholesale, positive reform of the system.

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Posted in Benefits, Informal Economy, Welfare | No Comments »

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