The nation owes gratitude to Inspector Vassil Panayotov. If his account is right, the Bulgarian policeman from Sliven deserves an MBE. He says he felt growing suspicion of an influx of unexpected cash-splashing in his town, with hundreds of people suddenly “living like barons… receiving social benefits from the United Kingdom using the weaknesses in the British social system”. Some of the recipients had never even been to the UK, others had been given plane tickets to nip over for a quick photo op, standing outside a property to prove an address for Universal Credit.
Panayotov says that the unaccountable influx of designer clothes, new shops, casinos and building work made him tip off our Department for Work and Pensions. He showed one British reporter a video of people laughingly throwing banknotes around and remarked: “That is your money. British money.”
The DWP, unsurprisingly, claims it was already on the case by early 2021, with “large amounts of intelligence needing to be worked through and police resources to be secured”. Interestingly, in December of that year the Labour MP Kate Osamor and the Work Rights Centre were complaining that many of her Bulgarian constituents were suffering eviction or destitution after being “unfairly targeted for investigation based on their nationality”, with their benefits abruptly suspended.
The DWP responded at the time that it was just doing a risk review: well, now we know why. But it is sad to reflect that some poor devils who got cut off by text, without warning, clarity or information on how to appeal, were themselves innocent victims of their criminal countrymen. Just like the rest of us, only more scared and hungry.
Raids and arrests were eventually made, and after £54 million of theft from the public purse — some of it over the Covid crisis — five fraudsters were jailed last week. Less than a million has so far been recovered. During their heyday Ali, Paneva, Nikolova, Stoyanov and Todorova operated from suburban London shops and had a WhatsApp group titled “Deluxe”. They joked about the unintended universality of our new Universal Credit system, and not only fed money back to Sliven but threw it about on Rolexes, diamond-encrusted sunglasses and the usual moneyed shopaholic rubbish.
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The prosecutor Tom Little KC says more investigations are going on: £54 million may be the tip of an iceberg. He said the scheme was “both simple to operate and highly effective”. Meanwhile the DWP, as the judge more tartly observed, was less effective, with a “woefully inadequate” checking system that couldn’t identify even ludicrously repeated use of the same names, addresses and telephone numbers.
Apart from the utter shamelessness of the perpetrators, some now whimpering about remorse and poorly grannies, the most fascinating thing is how brilliantly organised they were. They forged fictitious tenancy agreements, counterfeit payslips, letters from imaginary landlords, employers, and GPs. They invented children and wrote as if from their schools. They had hundreds of burner phones. They took photos of individuals they had flown over for a few days, standing outside random properties. Because the DWP (showing at least a modicum of galumphing caution) demands a front door to be open in the picture to prove the claimant lives there, the fraudsters just photoshopped it standing ajar. They charged their thousands of customers a one-off fee to register, but after two months took the rest for themselves and their “commissioners” back home in Sliven, whose job was finding new fake claimants. They had an excellent filing system of “claim packs”, and colour-coded ring binders.
These awful people were efficient, knowing which buttons to press in the Universal Credit cash machine. And the more you read about the ordinary functioning of the benefits system, you can’t help noticing that all the systems and safeguards they hoodwinked with their folders and phones and economies of administrative scale are the same ones that frustrate real claimants.
Applications for Universal Credit (still only partly “rolled out”) require files and paperwork: receipts, invoices from childminders, rent slips, an online account and a helpline that may take 40 minutes to answer but which charges for waiting time (one woman spent £9, fruitlessly). It needs a keen record of dates and knowing which household expenses are eligible. The rules, by the way, changed yet again last month about something called the “Administrative Earnings Threshold”.
Even if you are intelligent and assiduous and online; even if you aren’t confusedly desperate, hungry, undereducated and tired; even if you get it right, it may be five weeks after losing your job before the money comes. It ain’t easy. Plenty of us with secure homes and food get muddled even when filling in tax returns: have some pity for those without. There is a case for asking whether the whole welfare system wouldn’t be better taken back to a considerably simpler, less IT-dependent, more personal and closely localised (even slightly patriarchal) administration. It would need a larger workforce — someone to look at the real front door not a photoshopped fake, for instance — but would be harder to crack for chancers with colour-coded ring binders and no conscience.
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Six and half million families are on Universal Credit; half of them on the edge of food poverty. Over a third are in work, a fact which suggests very strongly that low-level earnings have become immorally inadequate. Universal Credit was supposed to provide a minimum living standard for the willing, working and law-abiding, not an easy mark for thieves. Embarrassing that it works the wrong way round.
