Social security "fraud"
01 July 1994
The government is encouraging all local authorities to contract out their social security "fraud" investigations. The type of functions which will be privatised will include accumulating evidence, such as employers details, making preliminary calculations and recommendations, maintaining written records and conducting interviews. The latter will have to conducted under caution in accordance with the Police and Criminal Evidence Act.
This development must be seen in the broader context of the government's overall strategy against social security "fraud". Under the current complex system authorities have been given financial incentives to encourage them to investigate "fraud". If, for example, a person who has been claiming Housing Benefit, fails to notify the local authority that their seventeen year daughter has obtained a job - a factor which would reduce the level of benefit - the local authority can either classify this as a claimant error in which case it will receive only 25 pence in the pound subsidy for the claim or it can record it as a case of "fraud", in which case it will receive 100 pence in the pound subsidy.
There is a further incentive to classify the failure to notify as a "fraud". All local authorities have been given Welfare Benefit Saving targets to meet. If they fail to meet the target their budget will be reduced the following year. Targets are calculated by adding together any amount which is considered to have been "fraudulently" claimed multiplied by an arbitrary factor of 32 to reflect the period in weeks the "fraud" might have lasted. The whole system is therefore itself fraudulent in suggesting that the notional savings stem from "fraud".
The privatisation of the investigation will no doubt lead to even larger notional sums being generated as the private investigators will be under an even greater pressure to search out and detect social security "fraud". If they fail in meeting their targets they will lose the business. People who are defined as having committed "fraud" will have their names and personal details noted on the new computer database which is being piloted in London (Statewatch Vol 4 no 3). Yet at no time will they have been tried in court and subject to a fair open and public hearing of the facts.
The poor and dispossessed will therefore now be subject to a new form of private policing which will be totally unaccountable, not subject to any formal system of justice and subject to the pressures and vagaries of the market.