Benefit ‘bounty hunters’ move ‘unfair and unjust’

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Government plans to crackdown on benefit fraud are likely to stigmatise the most vulnerable people, according to the Child Poverty Action group.

As part of plans to cut the £5.2bn annual cost of fraud and error, the prime minister today pledged tougher penalties, more prosecutions and new measures, including rewarding private credit agencies on a payment by results basis – quickly dubbed a ‘bounty’ payment - for each benefit fraud identified.

Mr Cameron said an ‘uncompromising’ strategy was required to reform the welfare system.

But Gabrielle Preston, policy and research officer at Child Poverty Action Group, said it was ‘unfair and unjust’ to focus on benefit rather than tax fraud and warned the initiative could ‘inflame stigma and discrimination’.

‘Whilst we recognise there is a need to minimise benefit fraud, it is currently at an all-time low of less than 1% of claims,’ she said. ‘Administrative problems and low take up remains a problem for families. A recent report from work and pensions select committee, Decision making and appeals in the benefits system “highlights the desperate need for fairer and faster decision-making to improve benefit delivery and take up”.

‘The system's complexity means £16bn is unclaimed by some of society's most vulnerable people. This initiative stigmatises the most vulnerable people and is likely to further reduce take up of much needed benefits and tax credits.

‘The National Audit Office believes at least £40bn of revenue is lost every year due to a failure to collect tax revenues effectively. Other estimates suggest the full loss may be over £100bn per annum. The decision to focus on benefit rather than tax fraud is unfair, unjust – and makes little economic sense.

‘If the government is to meet its 2020 commitment to end child poverty, it must protect children whose parents are entitled to receive benefits and tax credits.

‘It is unacceptable for politicians to inflame stigma and discrimination against some of the most vulnerable people in the country. The coalition should take a lead in challenging myths about people who rely on the welfare system.’