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Wednesday, August 11, 2010

Citizens Advice urge acceptance of plans for holistic tax, tax credit and benefit reform

Plans by Works and Pension Secretary, Iain Duncan Smith to overhaul the benefits system have received the endorsement of Citizens Advice. Their Director of Policy, Teresa Perchard argues that a large part of the amount quoted by the Goverment as being lost through fraud is actually due to error arising from the complexity of the system:

“Citizens Advice acknowledges that the £1.5bn cost of fraud in the benefit system must be recovered, but we are very concerned at the government's persistent tendency to roll fraud and error figures together. Errors account for the remaining £3.7bn of the £5.2bn figure quoted. Some errors are caused by benefits claimants failing to report their circumstances correctly, more often than not because the system is so complex. But just as many are caused by government agents giving the wrong advice or managing a claim inaccurately - Citizens Advice Bureaux see numerous cases of papers getting lost in the system because there is no proper tracking mechanism.

“Either way, the complexity of the system causes considerable extra expense for the government and distress for customers. We accept that the government aims to tackle the issue of error through its current plans to reform and simplify the system, and we urge the Treasury to recognise the importance of accepting the DWP's current proposals for a full reform of the tax, tax credits and benefits system as a holistic solution.

“In the meantime, the £5bn cost to government through fraud and error is dwarfed by the £17bn* of benefits and tax credits that remain un-claimed every year, because people don't know they are entitled to claim, or because the system is too complicated. The danger of making benefits more difficult to claim is that people in real need will not receive the money they need to pay their rent, keep their families warm, or feed their children."

Let us hope that this argument helps to convince the Treasury.
Pedr Ddu, how on earth have you worked out that that is an endorsement?!

The reality is that CAB will face massive cuts and over the next few years may cease to be a viable organisation. We'll then see who is still lucky enough to have a post from which they can endorse the policies of Iain Duncan Smith.
I think 'we urge the Treasury to recognise the importance of accepting the DWP's current proposals for a full reform of the tax, tax credits and benefits system as a holistic solution' is a fairly conclusive endorsement.

I have seen no proposals to cut CAB funding. Is that something else you have made up?
Can I please correct you. Teresa Perchard represents Citizens Advice not Citizens Advice Bureau. The former is a membership organisation for the 300+ CABx around England & Wales. Each Bureau is an autonomous charity with it's own constitution. Whilst Teresa may be using her powers of lobbying she does not necessarilly cover the views of all members.

Welsh ramblings makes a valid point about cuts. Citizens Advice have already had £11m cut from their budget and many local authorities (including mine) are talking of reducing the funding to their local Bureaux
I have amended the post to make that clear. I would point out though that I have been working with my local CAB for over ten years and over that time they and Citizen Advice have faced cuts in their budgets by both central government and local councils. I have not seen anything that suggests that the coalition government will be instituting cuts over and above that or that they will act differently. Accordingly, I reject the allegation that Citizen's Advice will be targetted by this government to the extent that they will cease to be a viable organisation. That statement has no basis in fact.
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