A focus on fraud
The government is cracking down on fraudulent benefit claims and the licensed trade is one of the areas to be targeted. By Nicola Collenette.
It is an all-too familiar tale: a publican tries to cut down on costs by hiring casual labour and paying them cash in hand, no questions asked.
In the autumn of 2001, a couple managing a pub in Lancashire were caught claiming a variety of benefits while running a pub together. They were prosecuted and in January of this year Burnley Crown Court sentenced them both to a 200-hour Community Service Order. What's more, they're also being pursued by the Debt Recovery Collecting Team to pay back the £25,000 they stole.
This is just one example of more than 220 prosecutions that the Department for Work and Pensions (DWP) brought against collusive employers in the last 12 months.
That figure is now set to increase over the coming months due to a new initiative launched by the DWP.
The campaign, called "Targeting Fraud", aims to tackle the problem of fraudulent benefit claims and features a pub.
Malcolm Wicks, minister with responsibility for benefit fraud at the DWP, says: "Over the following weeks, our ads will be appearing on TV, radio and in the papers, sending fraudsters the crystal clear message that 'We're on to you'.
This isn't empty rhetoric, according to Mr Wicks.
By March 2002, the department had successfully reduced fraud and error in Income Support and Jobseeker's Allowance by 24 per cent, which puts it on target to meet its stated aim to reduce fraud by 50 per cent by 2006.
And now, says the minister: "We're stepping up our efforts to crack down on fraudsters by targeting the companies that are knowingly employing them, and colluding with them in breaking the law."
So what will the 20 Joint Shadow Economy Teams, which are staffed by officers from the DWP, the Inland Revenue and HM Customs and Excise, be looking for among the pub trade?
"It could be a publican who has taken barstaff on without putting their wages through the books," says Mr Wicks. "Or a licensee who is paying them a 'top-up' wage over and above what's being declared for tax and benefit purposes."
What can employers do to prevent this from happening to them? "At its simplest level," says Malcolm Wicks, "they have to stop hiring casual labour and paying cash-in-hand, and instead make an effort to recruit their employees legitimately."
One way of doing this, he says, would be to advertise vacancies through Jobcentre Plus, which is now much more geared to addressing the needs of employers.
"That way, we'll be immediately informed if someone who was previously claiming benefits is now working, and take the appropriate action," added Malcolm.
"Alternatively, if companies want to recruit via newspaper ads, for example, then they should make sure that any new employee provides them with some sort of formal personal identification. Often, when people are trying to work and claim they'll use an alias."
The cost
Whatever the circumstances, if an employer is caught making a false statement, obstructs an authorised fraud officer trying to conduct an investigation, fails to provide the required information about their employees or commits false accounting, they could be liable for a £1,000 administrative penalty.
This amount is per employee involved in the employer's conduct, up to a maximum of £5,000.
That's for first-time offenders. If an employer is caught a second time, then regardless of the amounts involved, it will be pursued through the courts and they could end up with a jail sentence.
Pictured: licensees need to make an effort to recruit their employees legitimately, and make sure their wages go through the books.
