MPs demand benefits system review

12 April 2012

A committee of MPs has called for a wholesale review of Britain's "stunningly complex" benefits system, warning that it is so complicated as to make mistakes "inevitable".

The House of Commons Work and Pensions Committee called for the creation of a Welfare Commission to undertake a full examination of the system with a view to massive simplification.

In a report the committee pointed out that the Department of Work and Pensions alone administers around 40 different benefits, with differing rules and applications processes. Meanwhile, the tax credit system, administered by the Treasury adds an extra layer of complexity.

"The complexity of the benefits system makes official error inevitable," warned the cross-party committee.

"Staff have to contend with complicated processing requirements and, for claimants, the uncertainty creates disincentives to work and leads to inaccuracies in the amount of benefits they receive."

The committee welcomed the establishment of a Benefit Simplification Unit at the DWP, but said it was "under-resourced" and seemed to concentrate more on proposals for new policies than on a systematic review of existing structures.

The "piecemeal" approach taken to the Government amounts to no more than "nibbling at the edges" of the social security system, the MPs said.

The report comes two days after the National Audit Office refused for the 18th year in succession to sign off the DWP's accounts due to unacceptably high levels of benefit fraud and error.

And it follows Work and Pensions Secretary Peter Hain's Welfare Green Paper, which proposed changes to encourage people off benefits and into work. The committee expressed disappointment that the Green Paper did not take up proposals for a single system of benefits from the Government-commissioned report on welfare reform by banker David Freud.

Committee chairman Terry Rooney described last week's Green Paper as a missed opportunity, saying: "As the benefits system has grown, it has become more and more complex, making it difficult for staff and claimants alike to understand the different rules and processes."

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