Benefits pilot scheme scrapped for costing too much

Now this scheme seems to be a brilliant idea.
Should it be stopped?
I think not, the question of why should it cost so much to implement needs to be asked. After all, those on benefits are on a computerised system, surely a little bit of data input to vary the payments should not cost a fortune.

Benefits pilot scheme scrapped for costing too much
Embarrassed ministers have been forced to scrap a pilot scheme that suspended benefits for offenders who breached community orders because it costs more than £150 for every £1 it saves.

By Tom Whitehead, Home Affairs Editor
Last Updated: 7:46PM GMT 27 Feb 2009

The scheme, run in four areas since 2001, was designed to get tough on those ignoring community service but only saw a 1.8 per cent improvement in compliance rates.

At the same time, it costs more than £650,000 a year to organise and saves less than £4,000, in average, in benefit handouts.

The Ministry of Justice could not even say, last night, how many offenders had had their benefits suspended during the pilots.

Justice Secretary Jack Straw has now abandoned the scheme after admitting it "did not provide sufficient value for money".

Matthew Elliott, Chief Executive of the TaxPayers' Alliance, said: "It defies belief that anyone could run a system that spends over £150 to save £1. It seems that you could give some public servants a brewery and they'd struggle to organize a booze-up."

The scheme began in 2001 in Derbyshire, Hertfordshire, Teesside and West Midlands.

It applied to those serving community orders who were also in receipt of jobseeker's allowance, income support or certain training allowances.

If they breached the conditions of their community sentence they would see jobseeker's allowance and aspects of their training allowances withdrawn for four weeks while income support was reduced by 40 per cent, or by 20 per cent where the offender or a member of their family is seriously ill or pregnant.

But a written ministerial statement slipped out to parliament late yesterday afternoon said the pilot schemes would not continue.

It found there had only been a 1.8 per cent improvement in offenders complying with their conditions as a result of the policy.#

The MoJ were unable to supply accurate figures on how much money was saved but said had there been a five per cent improvement rate it would save £9,500 a year, suggesting less than £4,000 was actually saved.

In contrast, it said the cost of running the scheme would be £652,000.


Lantern Swinger
How the hell can it cost £150 for every pound that it saves? This idea must have been thought up by the same guy who was running the RBS last year, and the other £149 must be going towards his pension.

If the offenders will not do community service, then the government need to look at an alternative...Like chain gangs

It should surprise no-one that yet another Government initiative has gone tits up.The only surprise for me was how little money they managed to waste.I suspect all the Civil Serpents got their bonus though.


Lantern Swinger
This is why I am rapidly losing faith with democracy - the government never actually seems to be doing anything useful! I agree with Slim's assessment.
slim said:
why should it cost so much to implement needs to be asked.
A sense of reality might be in order, that's less than ten people a year, even at fairly low contractor rates.

After all, those on benefits are on a computerised system
The ones mentioned in the article come from three different departents; Department of Work and Pensions, HM Revenue and Customs and either Department for Children Families and Schools or Department for Innovation Universities and Science.

Add on the need to actually report and audit on attendance then there is, reasonaly, a cost associated with stopping the benefits. That said a 1:150 rate of return does seem quite poor.

it costs more than £150 for every £1 it saves.
One might ask if the low rate of return merely reflects a low rate of non attendance?

From the tone of what's said it seems that cancellation is more down to the fact thats topping the benefits may not actually act as a deterrent to non-attendance. If it's not acting as a deterrent then why bother doing it at all?

Despite all those questions NOMS does appear to be a complete cluster, there are a whole host of issues withint it that have been reported elsewhere. The project is profoundly inefficient and isn't making any move towards becoming anything more than a contractor driven money-pit. They seem to use a lot of low cost independent contractors who have no motivation to actually deliver anything.

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