Spending review

I can’t stay away long when there’s a spending review, can I?

Even Harry Hill is playing kick the poor these days.

I’ll write about this properly when I feel less livid and thus can be more reasonable, but for now, here’s Zoe Williams at the Guardian talking utter sense about the benefits system and fraud.

If you don’t want to follow the link (and why would you, it has been following you all day, it has been sneaking coffee beans into your teabags), then here it is:

Before we get too animated about the Tory suggestions for dealing with benefit cheats, let’s remember that all governments talk like this. George Osborne wants a three-strike rule which will deny benefits to people who have repeatedly been found guilty of fraud.

How this will work is opaque, since you have to assume that these fraudsters, for all their dishonesty, still don’t have any money. So they are either to starve, or get food stamps, both of which would represent a radical new direction for welfare policy. But during the election campaign, it was leaked (the technical term is “accidentally on purpose”) that Jim Murphy, then Scottish secretary, had suggested to Ed Miliband that people who informed on benefit cheats should get a share of any cashthey save the government. In politics, if you have a conversation about benefit fraud and you don’t sound like Rush Limbaugh or the Stasi, then you’re not doing it right.

The reality of this “cost” never taints the political rhetoric in any way. The figure lost is £5.2bn, but that is fraud and error, which the relevant press officers always pronounce “fraudnerror”, as though they were the same thing. The true figure for benefit fraud is £1bn, and £500m for tax credit fraud. About 56,000 people are caught every year perpetrating a fraud, which is about 1.1% of those receiving benefits.

The cost of errors dwarfs that of fraud: in the DWP it’s £1.1bn in official error, and £1.1bn in customer error. Within tax credits there’s an overall error figure of £1.6bn, over three times the fraud amount. HMRC doesn’t specify whose the error is.

The government has suggested a £50 fine for customer errors that could reasonably have been prevented. That is a brilliant idea, but it must be matched, for any semblance of fairness, by compensation from the government when the error is theirs. So far we are only dealing with money lost by the government, not money it saves by underpayments. This is interesting: £1.3bn is saved by the DWP, not because people don’t claim what they’re entitled to, but because people do claim and the department calculates their entitlement wrongly. If you combined all the official errors by the DWP and HMRC and then undertook to rectify them – well, it would be irresponsible to talk about national bankruptcy, but we’d be kissing goodbye to our empty aircraft carriers, for a start. And that’s just relating to benefits – the income tax errors in the government’s favour, which predominantly hit the low paid, are even more scandalous.

Anyway, back to these fraudsters, who are the least costly element of a leaky system, but nevertheless transfix the political imagination as though they were masterminds of cunning and audacity, whose long game were to destroy the fabric of society altogether. The department doesn’t break the figures down by type of fraud – whether it’s mainly undeclared cash-in-hand work, or couples pretending to be single, or criminal gangs stealing identities – but they do give some sense of scale.

The average fraud per prosecution was £11,000, but only one in 10 fraudsters is prosecuted because most misdemeanours are too small to warrant it. There were 360 convictions for frauds of over £50,000 last year, but that is a tiny proportion of the total. To notch up that much, you would have to be doing something quite major, such as cloning an identity for housing benefit or faking a disability over a very long period.

Around 90% of cheats are either given an administrative penalty or a caution – and the average frauds that bring about these sanctions are, respectively, £1,100 and £1,200. So imagine you did two hours a week cash-in-hand work over the 16 hours you’re allowed: and over three months, your fraud amounted to £1,000, since you shouldn’t have been on jobseeker’s allowance at all. That’s what politicians should be asking us to envisage when they set upon this bugbear with their big sticks: people on very low incomes earning a very small amount extra and not declaring it. I am amazed that the figure for fraud is so low. When you consider the incompetence of the DWP and HMRC, you would be mad to declare a small cash-in-hand income to them. You’d probably find yourself not just having your benefits withdrawn, but also on an emergency code, erroneously charged tax that it would take you years to recover.

There is a very important failure of governance here: people are being cheated out of benefits by an incompetent system, they are being threatened for their own mistakes and simultaneously screwed by the DWP, and 200 extra employees are being taken on as “anti-fraud” officers when the first priority of government should be that it has enough staff to get its sums right.

But of course this is all common knowledge: nobody in government thinks of benefit fraud as a significant cost. It’s just a rhetorical twitch that they have. Osborne demonstrated neatly, yesterday, how the rhetoric works: he placed his welfare aims in the territory of stopping cheats, but the cuts he announced were nothing to do with fraud, they applied to all welfare claimants. This narrative tacitly turns everyone who claims welfare into a fraud. It is socially very divisive, it is stigmatising, it is subtly slanderous and it is immoral.

All in it together my fucking hole.

My views in a simplistic nutshell: Lots of people are fucked, the people I expected to be from the Tories. People working in the public sector (half a million job losses, just about).  To the people who are going to be too ill to work but be forced into non-existent  jobs after a year, despite having paid their taxes for this system to support them, and to those who will lose their mobility component and be isolated from their families and friends in having to rely on increasingly lessening public transport unsuited for them, and to people (like me) who will lose the support to live a productive life.  I hope by 2012 I have a job and don’t have to move into a single room and put my cats into a shelter (or what I did in the first place when I kept losing jobs due to being too mad to be there, which was end a relationship, leave the home I shared in order not to drag him into homelessness and no money either,  die with shame along the way, living without benefits or income for months due to the hoops I had to jump through, into a tiny bedsit with a broken window, no heating and no mattress.  It’s the life!  Isn’t it? Flat screen televisions!  Boob jobs!)   What if you’re a 34 year old parent?  Whose kids live with your partner?  How do people stuck with the single room rate manage then?  Poor people who can’t afford council rents rising to 80% of the market rates will be forced from the more expensive areas into less expensive ones creating more ghettos and more social divisions and/or homelessness.  Isn’t housing a right?  Isn’t dignity and compassion a human necessity?  When it doesn’t exist within our governments how can we foster it within our citizens?  This is a disgrace.

At least overseas aid spending is intact. (I mean that sincerely by the way!)


22 Responses

  1. We’re all fucked. Self serving upper-middle class wankers. I fell into that particular ESA camp. Off to jump off bridge now.

  2. this is a succinct commentary on what GO announced yesterday http://tinyurl.com/2fy7yr4

    Angry yes, now working out my best defence plan, will we take to the streets like the French, somehow I doubt it? best bet will be to develop solidarity by sharing information and experience while of course remembering not to let Nadine Dorries (eg http://tinyurl.com/3xs5ezl) know that we know how to use computers

  3. I shouldn’t think that this will put many people’s minds at rest but re. ESA – the limit to a one year entitlement will only apply to those receiving the work-related componant of contributory ESA. It will lkely be that case that if you’ve been on contributory IB for a certain amount of time and your current income (i.e savings threshold etc) entitles you to income related ESA (since you’ll be reassesed on the basis of the new assessment proceedure), you’ll be moved to income related ESA (if you’re deemed eligable at all).Secondly the removal of the mobility comonant of DLA will only affect recipients in residential care (that’s the present proposal anyway).
    It’s still a nightmare, a headfuck and about to utterly overwhelm our organisation (mental health citizens advice). Hope this helps a tiny little bit.

    • Indeed. This change wont affect a large number of people (of course this is no comfort to those who it does effect) – but because things aren’t put into context in the media, it leads to people, panicking – and rightly so; it wouldn’t be normal not to panic if you think you’re going to lose your income. But this will in some cases leave some people better off.

      • See http://www.guardian.co.uk/society/2010/oct/21/disability-benefits-million-losers
        “because things aren’t put into context in the media”,
        would you be so good as to provide a more suitable analysis?

        • unfortunately the Guardian’s piece is well researched and pretty accurate 😦

        • “he proposal is that contribution based ESA (which is not means tested) would last only a year for claimants in the work related activity group. After that, provided the claimant continued to satisfy the relevant medical test they would only be eligible to claim income related ESA. If they are not eligible for that because of their financial position, they would not be eligible for income related JSA either, even if they were fit for work. Ironically, there are people who curently get IB at a rate slightly above IS levels where the loss of passported benefits outweighs the extra they get at the moment, who would end up better off on means tested ESA. Those people are currently worse off than if they had not paid their NI contributions in the relevant period prior to becoming ill. “

          • do the ConDems aim to take us back to the National Assistance of the fifties?

            • Whatever suits Dave and his chums I suppose.
              I do wonder what kind of legislative process parts of the review has to undergo. For example, the announced changes to be made regarding levels of rent for social housing. I would like to know when this change is likely to be considered fully enshrined in law. I have asked several intelligent people and I don’t yet have an answer. So, any pointers would be appreciated. (Too nauseous to do research at the mo)

              • Yes, at the moment it’s still all headline stuff; will try and find out and will post the URLs to whatever I discover

              • will assemble what I can and stick selected URLs on a website (and there I was wondering what to do this weekend 🙂

                • I decided that I would contact my local MP, and ask him to provide accurate info, relevant to both national and local concerns. So I greatly appreciate that you appreciate these questions should be answered. And I will report back, though it is getting cramped in here! Have a good weekend, whatever you decide to do. If I don’t see any footage of Osborne for 48 hours, that’s the best part of my weekend.

              • OMG just found this http://tinyurl.com/358darn and realised just how much this will affect everyone even those like me in ex-local authority (now housing association) social housing in a relatively low rent part of the England,gulp…

  4. I’ve had a much improved three months mental-health-wise due to making some changes in my life.

    I’m finding it really hard to keep going with my Big Plan today because I’m getting so anxious and depressed about the spending review.

    Even if I can save myself (I’m very fortunate to have family to fall back on) I’m just utterly miserable for all those people who have my sort of incapacities whose lives are to be made even harder in the years ahead.

    The tory wing of the coalition keeps using the word progressive when it’s been shown that the poor are the second worst hit by these changes. And even if it’s true on paper that the very richest lose a bigger percentage of their income the actual *meaning* of that to their lives in contrast to the impact on the life of the poor is not remotely comparable.

    What will the rich lose? I doubt they’ll lose their second home, one of their cars or be forced to sell anything other than a few of their shares.

    The poor may well lose their fucking *home*. Be homeless.

    I like to make sure I watch the news every day and keep up with what’s going on in the world. But it takes a tremendous toll on my mental health. I toy with the idea of just banning it from my life but I feel like a wanker if I do that; it feels wrong and anti-society. So, I can either be a wanker in my own eyes by burying my head in the sand or carry on watching, becoming increasingly morose, angry and depressed.

    Not a great choice.

  5. if to carry on watching is going to make you more miserable, please stop doing it and please don’t think of yourself as a wanker – stay with the fact of your ‘much improved three months mental-health’ and stay with your Big Plan

  6. But Harry Hill is a psychiatrist so we shouldnt expect too much of him.
    Im a bit worried that there wont be enough work around for his colleagues that are still plying their trade.
    Im thinking of setting myself on fire with petrol in the town centre if anyone cares to join me. I know that its the expensive option what with the price of unleaded fuel but it might make more of an impact than a solitary death in a stinking flat.

  7. I am just kidding of course.
    I think that it is important to just hang in there for the moment. I do actually believe that Ian Duncan Smith is sincere and if, with help people are able to come off benefit that must improve their lives. But if people are incapable of work they must be provided for and this has been acknowledged.
    Lets see what pans out, after all what else can we do?

  8. @ BP24/7 glad you’re just kidding, funnily enough I agree about I D-S in that he comes over as a decent bloke who, like Heseltine, had a Damascene moment in Liverpool. As you say let’s see what pans out, what we can do is (as long as ND isn’t looking) to share experience and information amongst ourselves and those we are in contact with.

  9. the clearest overview about the spending review I have found so far is http://rd.kpmg.co.uk/Topics/23803.htm

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