Huge increase in 'organised' unemployment-benefit fraud

INVESTIGATORS reported a big increase in 'premeditated and organised' unemployment benefit fraud yesterday. More than 67,000 people were caught fraudulently claiming unemployment benefit last year, and 100 employers were found colluding with their workers.

Employment Service inspectors revealed a 38.4 per cent increase in prosecutions of individuals and a rise of more than 80 per cent in cases of employer collusion. Graham Bambridge, head of the department's fraud investigations, estimated that about one in 12 dole claims for a total of pounds 5.8bn in benefit involved some deceit and that between 40 and 50 per cent of those were detected.

Mr Bambridge said the 779-strong inspectorate spent pounds 26m on inquiries and saved pounds 3 for every pounds 1 spent. He said claimants were not prosecuted for minor offences but if individuals or employers had made a concerted effort to cover their tracks the department invariably pursued them through the courts. Mr Bambridge said some companies even gave time off to workers to make fraudulent claims.

Most successful prosecutions resulted in fines and some in jail sentences. One offender in Scotland was given three years. The man's sentence was increased from two years after he appealed.

Among the false claimants discovered were 400 flower-pickers in west Cornwall, whose detection saved pounds 370,000, and more than 500 people working in leisure industries at Welsh coastal resorts, who withdrew claims totalling pounds 562,000. An inquiry into London clothing manufacturers resulted in 185 individuals withdrawing claims of pounds 373,000.

The work of fraud teams led to more than 69,500 withdrawals or reductions in payments. More than 3,600 claimants and 100 employers were prosecuted.

James Paice, the employment minister, said the fraudsters were stealing from 'honest people', who paid for benefits through taxation. He warned: 'Those employers and individuals who continually flout the law will be prosecuted and could find themselves in jail.'