TAXPAYERS FOOT [Pounds sterling]40M BILL FOR MONEY-FOR NOTHING LOANS

Daily Mail (London), April 4, 2006 | Go to article overview

TAXPAYERS FOOT [Pounds sterling]40M BILL FOR MONEY-FOR NOTHING LOANS


Byline: GRAHAM GRANT

Editor UP to [pounds sterling]40million of taxpayers' money has been 'gifted' to work-shy Scots under an interest-free loans system.

But there has been widespread abuse of these 'crisis loans', which are intended as short-term help in genuine emergencies.

The system has turned into a 'cash cow' for more than 200,000 Scots a year, including drug addicts and rent defaulters, who take the cash but fail to make repayments.

The state has then written it off as bad debt. Last night new official figures sparked calls for an overhaul of the system.

Critics branded the loans as an example of Labour's burgeoning 'money-for-nothing' welfare culture - bankrolled by hardworking, middleclass families.

Shadow Scottish Secretary David Mundell said: 'People obviously think they can get the cash and will never have to pay it back.

'That i s a very damaging perception and demonstrates an urgent need to review the methods for collecting loans and making sure the taxpayer gets value for money.

'While there will always be genuine cases, we need to guard against the idea that people can get something for nothing, with no sense of personal responsibility.' The latest figures suggest the loans, introduced in the 1980s and available to people over 16 who need help in an 'emergency or disaster', are being used to 'prop up' a growing subculture of people dependent on the state. And the sums handed out do not show up on official benefits statistics.

Remarkably, people who fail to pay back the loans are entitled to make further claims. And they do not always have to prove their identity when they turn up to collect the handouts.

The application criteria are extremely vague and open to abuse.

Official literature says the loans are for people 'unable to pay for basic living costs', or 'unable to pay for something else' that would pose a serious risk to the health and safety of the applicant's family.

They are also open to those who need help to pay rent in advance to a non-local authority landlord'.

The amount paid out 'depends on circumstances'. But the maximum sum was increased recently from [pounds sterling]1,000 to [pounds sterling]1,500 as part of changes that will also give claimants longer to repay. …

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TAXPAYERS FOOT [Pounds sterling]40M BILL FOR MONEY-FOR NOTHING LOANS
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