BENEFIT BOSSES ‘WON’T PUNISH CHEATS’
SNP agency has no power to f ine frauds
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