Posted on 02/01/2008 9:11:36 PM PST by fight_truth_decay
Up to two thirds of people claiming incapacity benefit are not entitled to the state handout, the Government's new welfare adviser warns today.
Welfare is a mess, says adviser David Freud
Your view: Who benefits from the UK’s benefits system?
David Freud, an investment banker hired by James Purnell, the new Work and Pensions Secretary, said the disability tests used to award state aid were "ludicrous" and could be costing billions of pounds.
Mr Freud's stark assessment, in an interview for today's Daily Telegraph, is likely to anger many Labour Left-wingers concerned about Gordon Brown's apparently tough stance on welfare reform.
But he said the Prime Minister plans to press ahead with the biggest shake-up of the welfare state since its creation more than 50 years ago.
More than 2.6 million people claim incapacity benefit at a cost of more than £12 billion a year to the taxpayer.
However, Mr Freud suggested that less than a third may be credible recipients while several hundred thousand work illegally on the black market.
"When the whole rot started in the 1980s we had 700,000 [claimants]," he said. "I suspect that's much closer to the real figure than the one we've got now."
Although it is impossible to quantify exactly, this means as many as 1.9 million people who are able to work could be claiming the benefit.
Mr Freud - who has also influenced Tory welfare reform policies - launched a damning attack on the system that allows people to claim benefit, worth up to £81.35 a week. "If you want a recipe for getting people on to IB we've got it," he said.
"You get more money [than unemployment benefit] and you don't get hassled, you can sit there for the rest of your life. It's ludicrous that the disability tests are done by people's own GPs - they've got a classic conflict of interest and they're frightened of legal action.
"The system sends 2.64 million people into a form of economic house arrest and encourages them to stay at home and watch daytime TV. We're doing nothing for these people.
"You don't need to make a huge fuss about categorising people. If you're disabled, work is good for you and not working is bad for you.
"The people who are really disabled are often the ones who are really desperate to work, but there are then a whole load of people who say they don't want to be made to work regardless."
Successive governments have been accused of failing to clamp down on fraudulent incapacity benefit claims and critics say the fall in the number of unemployed may simply reflect people moving on to sickness benefits.
Recent figures showed that more than 500,000 people under 35 claim incapacity benefit with tens of thousands of people claiming for conditions such as depression, anxiety, and obesity.
Mr Freud estimates that "five to seven per cent" of claims are fraudulent with people working on the black market while receiving benefits.
Under his review, the private sector is to be brought in to run large sections of the welfare system and lone parents will be encouraged to work as soon as their children go to school.
People refusing to co-operate and find a job will have their benefits "sliced" under the plan to get about 1.4 million people back to work. The system should be in place within five years, he said.
Private companies will be put in charge of finding jobs for the long-term unemployed. They will be paid by results, with large fees if they succeed in keeping people in work for more than three years and nothing if they do not.
"We can pay masses," Mr Freud said. "I worked out that it is economically rational to spend up to £62,000 on getting the average person on incapacity benefit into the world of work."
He said there had been a transformation in the Government's approach to welfare since Mr Purnell's appointment. "Purnell is showing astonishing energy - there is going to be a much more single-minded ferocity".
Peter Hain, his predecessor, had been more "worried about the Left". The Conservatives and the Liberal Democrats already support the plans.
However, many of the Government's plans to return people to work may be derailed by fears of a recession
Freud says specialists will spring up - giving the example of Bangladeshi women, who are the lowest participants in the work force - "somebody will see a gap in the market and make their fortune."
He wants a combination of carrots and sticks to persuade people to take jobs (1.9m). "You have to slice the benefits [if people won't work] but if you're not spending the money to provide the services, the stick is just a vengeful and useless way of beating people."
He doesn't think people on the dole are lazy. "There's good, evil, laziness and hard work in everyone, it's a question of motivation. I do not accept the rhetoric about lazy scroungers. Even if they're a Jack the Lad or a Jill the Lass, there's usually something else as well - they're illiterate or they've got no social skills." ...But in his view, fewer than a third of those on incapacity benefit are really too ill to get a job.
Mr Freud's big idea is that the private sector be put in charge of the long-term unemployed. Companies taking part would receive a huge fee for getting somebody to stay in a job for more than three years but nothing if they fail. There will be bonuses for hard cases, and no special treatment of disabled people or lone parents with children at school.
It is, he (Freud) says "always sensible to work on the assumption that banks are mad, they behave like lemmings, there is always something they all go and do that then explodes".
So does he think there will be a recession? "Yes, because we should have recessions every five or six years and we are due one. What would be very skilful would be to have a mild, short one."
He won’t last a year: The last thing politicians want to hear is the truth. I worked off and on in the welfare system while in state government, and most of the welfare recipients dressed better, had nicer cars and lived better than I did!
I wonder what they’ll do with all those Muslim and Eastern European immigrants “doing the jobs that Britons won’t do” for less money?
nope. the way to "fix" a disastrous government beaurocracy isn't necessarily to "privatize" it. Private institutions are not necessarily any more virtuous, compassionate, or effective than government ones. In fact, without strict regulation, private "welfare" would probably turn people into slaves.
They have a group that checks dance halls, sporting
events and other places.
They take pictures of these dead beats that are not
really injured and use it to prove their claims are
phony.
SSI should do the same!
...it was his experience in the City that persuaded Tony Blair to hire him to review the welfare system two years ago. The investment banker who helped to raise £50 billion for firms such as Eurotunnel, Railtrack and EuroDisney, had a reputation for solving impossible problems.
...This week, however, Mr Freud was hired by James Purnell, the new Work and Pensions Secretary, as an adviser and asked to help implement nothing less than a revolution in the welfare state. There has, he believes, been a sea change in Labour's thinking about the benefits system. "Gordon Brown has now said they're going to do it," he says.
Thats about.. what?...$150,000.... they gonna spend up to THAT much on each person??? insane
he thinks it makes sense to spend $150,000 to get a welfare recipient to work and that we, they, SHOULD have a recession every 5 years or so
Around the turn of the century (1900), social workers pushed for “progressive” reforms that included government-based welfare. It seems that the private entities that distributed private relief - churches, mutual aid societies, charities, etc. - would distinguish between the “deserving” and “undeserving” poor. Government made (and makes) much fewer distinctions between the two groups. Allowing government to monopolize social welfare has been a disaster.
“...it was his experience in the City that persuaded Tony Blair to hire him to review the welfare system two years ago. The investment banker who helped to raise £50 billion for firms such as Eurotunnel, Railtrack and EuroDisney, had a reputation for solving impossible problems.”
Gee, sounds like a Mitt Romney type. Too bad our country is busy trying to make sure someone who would actually get things done, like Mitt and like this guy, out of the way so that a guy like McInsane, with no experience in running anything can be Prez.
Privatization is a good idea.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.