Brown's Tax and Benefits system a shambles

12.55.57pm UTC (GMT +0000) Wed 15th Feb 2006

Solihull's LibDem MP, Lorely Burt has branded Gordon Brown's means tested benefits system a 'beaurocratic nightmare'. She said that over complex, means tested benefits are failing those in need and costing tax payers a fortune because of mistakes in administering up to a third of all tax credit and CSA cases.

Mrs Burt, who is a member of the prestigeous Treasury Select Committee in the House of Commons, criticised the Chancellor of the Exchequer, saying:

A total of £3.3billion payments through the Child Support Agency to support children remain outstanding, and it's costing the Agency more to chase payments than they ever manage to collect. Around one third of all CSA, Child Tax Credit and Working Tax Credit awards are miscalculated, and low income families can have their benefits slashed or stopped altogether if mistakes lead to overpayments in the first part of the financial year.

"Around £2billion Child and Working Tax Credit was overpaid in the first year of operation alone, and now the Parliamentary Ombudsman, Ann Abraham has found Revenue and Customs guilty of maladministration, saying they should not claw back the money if claimants have kept officials informed in good time of any change in circumstances. I have been asked to intervene time and again with constituents in Solihull who face real hardship because of mistakes in the system.

"It's a lose, lose situation. Either overpayments are written off to the expense of the taxpayer, or families face real hardship and distress as their benefits are cut to the bone, failing many of those in greatest need that the benefits were designed to help."