SNP agency has no power to f ine frauds

The Scottish Mail on Sunday - - Front Page - By Gareth Rose SCOT­TISH PO­LIT­I­CAL ED­I­TOR

SCOT­LAND’s new so­cial se­cu­rity agency will not have the power to pun­ish ben­e­fit fraud­sters, spark­ing fears that the sys­tem will be open to abuse.

At present all ben­e­fits are ad­min­is­tered by the UK’s Depart­ment for Work and Pen­sions (DWP), which is au­tho­rised to fine those who make bo­gus claims.

Later this year, So­cial Se­cu­rity Scot­land will take over the ad­min­is­tra­tion of key ben­e­fits north of the Bor­der.

But we can re­veal it has de­lib­er­ately not been given the power to pun­ish cheats.

It is un­der­stood the Scot­tish Govern­ment

be­lieves it is wrong for it to be ‘judge, jury and ex­e­cu­tioner’ and wants to leave pros­e­cu­tions to the Crown Of­fice.

Scot­tish Con­ser­va­tive so­cial se­cu­rity spokesman Michelle Bal­lan­tyne said: ‘It will be im­pos­si­ble to run a wel­fare sys­tem which doesn’t carry any pun­ish­ment for those who de­fraud it. It’s not only a soft-touch on ben­e­fits cheats, but of­fers noth­ing in the way of de­ter­rence for those who want to steal money from the tax­payer.

‘The SNP is about to find out just how dif­fi­cult it is to run a fair and af­ford­able wel­fare state.

‘Early in­di­ca­tions sug­gest that the Na­tion­al­ists have no in­ten­tion of be­ing fair to those who have to pay for the new sys­tem.’

A raft of ben­e­fits – in­clud­ing Best Start Grants, Per­sonal In­de­pen­dence Pay­ments, Dis­abil­ity Liv­ing Al­lowance and At­ten­dance Al­lowance – will be de­volved. Oth­ers, such as Uni­ver­sal Credit and pen­sions will re­main re­served.

Un­der the cur­rent UK sys­tem, low-level fraud is dealt with through ‘ad­min­is­tra­tive penal­ties’ of up to £5,000 handed out by the DWP.

Last year, 5,000 penal­ties were is­sued.

For large-scale or long-term fraud, the DWP passes cases to the jus­tice au­thor­i­ties to pros­e­cute in the crim­i­nal courts.

But the Scot­tish Govern­ment plans to take a dif­fer­ent ap­proach.

It said So­cial Se­cu­rity Scot­land would seek to re­cover over­pay­ments but, as it is not a pros­e­cu­tion ser­vice, would not is­sue fines or other penal­ties.

Yes­ter­day, the Govern­ment said cases of fraud would be passed to the Crown Of­fice.

But crit­ics warned that the sys­tem was un­der­mined by the new agency’s lack of pow­ers.

John O’Con­nell, chief ex­ec­u­tive at the Tax­Pay­ers’ Al­liance, said: ‘It’s good to see de­volved pow­ers be­ing used, but the de­ter­rents in the cur­rent sys­tem are there for a rea­son, namely, to dis­cour­age fraud. If fraud is al­lowed to con­tinue, or even in­crease, hard-pressed tax-pay­ers who play by the rules will suf­fer.

‘It’s com­pletely un­fair to have a sys­tem where peo­ple are pun­ished for play­ing by the rules and this should change.’

The re­liance on pros­e­cu­tion as the only way of pun­ish­ing of­fend­ers will be even more con­cern­ing, as re­cent fig­ures show that only a tiny per­cent­age of ben­e­fits fraud­sters end up in jail.

Only three out of ev­ery 100 Scots ac­cused of cheat­ing the sys­tem are pros­e­cuted – and of those who ap­pear in court, just 1 per cent are sent to prison.

The fig­ures – re­leased via a Free­dom of In­for­ma­tion re­quest last year and cov­er­ing the two-and-a- half years up to June this year – also show that £1.6 mil­lion was lost to ben­e­fit fraud ev­ery month north of the Bor­der.

So­cial Se­cu­rity Scot­land will launch its call cen­tre next month but has only just of­fered po­si­tions to the 93 mem­bers of staff who will fill it.

It is also tak­ing on a team of counter-fraud of­fi­cers who will spy on peo­ple sus­pected of be­ing ben­e­fits cheats.

They will have the power to seize doc­u­ments, such as bank state­ments, em­ploy­ment in­for­ma­tion, cus­tomer ac­count de­tails and house­hold util­ity bills, as part of their in­ves­ti­ga­tions.

The first pay­ments of Carer’s Al­lowance are due within weeks, back­dated to April.

The new agency is ex­pected to cost tax­pay­ers al­most £1 bil­lion to ad­min­is­ter by 2021.

A Scot­tish Govern­ment spokesman said: ‘Ben­e­fit pay­ments will be worth over £3 bil­lion a year and to pro­tect these funds and those en­ti­tled to sup­port, if ev­i­dence ex­ists some­one has com­mit­ted an of­fence, we will pass that to the prose­cut­ing au­thor­i­ties.

‘Any­one can make a mis­take, how­ever, and those who make gen­uine er­rors in their ap­pli­ca­tion will not be crim­i­nalised.

‘If any­one has a rea­son­able ex­cuse, they will al­ways be given an op­por­tu­nity to ex­plain this and any other mit­i­gat­ing cir­cum­stances.

‘It is im­por­tant a con­sis­tent ap­proach is taken in re­port­ing such cases and guid­ance and staff train­ing will be de­vel­oped.’

‘The de­ter­rents are there for a rea­son’

‘SOFT-TOUCH’: Michelle Bal­lan­tyne

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