Around £2bn of Britain's £100bn social security spend is lost in fraud every year. The Money Programme looks at the work of one investigation team to find out how 120,000 people are on the fiddle.
Estimates suggest that about 2% of Britain's £100bn social security spend is being lost in fraud every year. To tackle the problem the government has set up intelligence units around the country to gather information on the benefits cheats.
Manchester's special fraud investigation team have been together for 15 months. The four members of the squad have over 40 years' combined experience in tracking down benefits fraudsters.
They are one of 11 teams formed by The Department of Work and Pensions as a result of the Grabiner report, a study into Britain's black market economy which inspired the current government campaign to crack down on fraud.
In their latest sting, the team have been investigating workers at local cleaning company Floorbrite. So far their enquiries have resulted in 61 cleaners from the firm being convicted, with one woman pleading guilty to £16,500 worth of benefit fraud over six years. They estimate that the combined fraud adds up to a total of £400,000 in benefits lost.
Team leader Andy Shaw welcomes the government's new focus on fraud: "I've been in this line of work for longer than I care to imagine, but there has definitely been a greater emphasis in the last 2 or 3 years on detecting and prosecuting these people. And I have to say I think that ever so slowly it is beginning to have an effect."
The national benefit fraud hotline is at the forefront of the government's new multi-million pound campaign. Last year it received 162,000 calls. To turn more of these calls into successful prosecutions the government has given investigators new powers and training to track down the cheats.
Malcolm Wicks MP, minister for fraud, says: "We don't want anyone to be under a misapprehension that this doesn't matter because it is only the government's money and it is only small amounts being defrauded. The government has none of its own money - this is the community's money."
"I know from my own constituents that when they know someone on a housing estate down their road is committing fraud they are absolutely furious about it and want the government to crack down on it."
The Manchester team have their own specially kitted out van with hidden cameras and recording equipment. In North West England alone they've spent £1m on training and equipment.
Convicted fraudster Michelle was prosecuted six months ago for working under a false name while claiming benefits. Encouraged by her employer, she picked the name randomly from a newspaper and changed some of the digits in her National Insurance number. "I was petrified of being caught in the beginning and then as it went on and on and I was getting away with it, I got used to the money, all the bills were paid and I thought this is lovely," she says.
Last year the Department of Work and Pensions prosecuted 11,000 people for benefits fraud but only 240 employers.
More still to be done
Minister for fraud, Malcolm Wicks, admits they have got to do more: "We need to increasingly shine the spotlight on the collusive employer who knows very well what is going on. Perhaps it enables him not to pay National Insurance contributions or to pay a lower wage because the worker is also getting a benefit."
"We need to become more sophisticated, as we are, in cracking down on that kind of person," Wicks says.
Many employers and employees operate within a culture where cheating the system has become acceptable - the biggest battle of all may be not to catch the cheats but to change that culture.
This programme was first transmitted on Wednesday 6 November 2002.