Unemployed people who fail to complete a month-long programme of work activity could lose their jobseekers' allowance for up to three years, the Government announced last night.
Ministers believe their latest crackdown will encourage the jobless to take part in the scheme, designed to get them back into the daily routine of work by helping their local community – for example, through doing charity work or environmental projects.
They say the move will also prevent people from "playing the system" by stopping their dole claims to avoid the month-long programme and then signing on again a few weeks later.
The first official figures show 46 per cent of the unemployed people referred to the scheme either stopped claiming jobseekers' allowance or failed to turn up. Some 29 per cent stopped claiming, some of whom are suspected of working in the black economy.
Claimants can already lose their dole money for three months for failing to complete a placement without good reason, with a six-month penalty for a second breach. Later this year, a new three-year sanction will be introduced for a third violation.
Chris Grayling, the Employment Minister, announced a £5m expansion of the scheme, which will fund an extra 9,000 extra places a year. Between May last year and February this year, 16,790 people started a placement.
Mr Grayling said: "People need to be aware that for those who are fit enough to work it is simply not an option to sit on benefits and do nothing. We've found that a month's full-time activity can be a real deterrent for some people who are either not trying or who are gaming the system. But we're also fighting a battle to stop claimants slipping back into the benefits system by the back door."
Government sources said decisions on withdrawing benefits would be left to local Jobcentre Plus offices and penalties would not be applied if the unemployed had a good reason for dropping out of the programme.
Liam Byrne, the shadow Work and Pensions Secretary, said: "This announcement does nothing for 99 per cent of Britain's jobless. There are 2.6 million people on Britain's out-of-work benefits. This announcement will help just 9,000. If this Government is serious about tackling Britain's unemployment emergency they would stop tinkering around the edges and bring in Labour's Real Jobs Guarantee to get 110,000 young people back to work – paid for by a tax on bankers' bonuses."
Mr Byrne said ministers had been warned by the National Audit Office spending watchdog that there are weak anti-fraud checks in the scheme. But he said Mr Grayling's department had announced no new safety checks, even though it had cut 30 per cent of its fraud squad.
The programme, run by private firms and voluntary groups, is designed to help jobseekers who have shown a need for additional support to gain work-related disciplines. Claimants work up to 30 hours a week. Placements aim to instill disciplines such as attending on time, regularly carrying out specific tasks and working under supervision.
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