Scheming ministers plot workfare scam

A Court of Appeal ruling last month found that the schemes - requiring claimants to do unpaid work experience or lose benefits - were unlawful due to the way the regulations were framed.

Work and Pensions Secretary Iain Duncan Smith insisted at the time that he had "no intention" of repaying benefits to anyone who lost out and he launched an appeal to the Supreme Court seeking to have the ruling overturned.

New regulations were set on the day of the court ruling to ensure that the DWP can continue threatening claimant's benefits to coerce them to take part in schemes.

But the department confirmed it was considering its options in the case of defeat at the Supreme Court. It is believed defeat could prompt action from tens of thousands of claimants who have had their benefits docked, seeking millions of pounds in repayments.

A DWP spokesman said: "The Court of Appeal made it clear we can require people to take part in some of our schemes to help them back to work and to remove their benefit if they don't.

"That's why we are looking at options to protect hard-working taxpayers and make sure we won't pay back money to people who didn't do enough to look for work."

And he confirmed one of the options being considered was to introduce legislation.

Shadow work and pensions secretary Liam Byrne said: "Bungling DWP ministers have turned the Work Programme into a West Coast Main Line-style fiasco. Hundreds of thousands of sanctions might now be illegal because Iain Duncan Smith messed up the regulations and now the taxpayer might be on the hook for over £100m."

Boycott Workfare campaigner Joanna Long said: "The Court of Appeal judged that the DWP acted unlawfully when it sanctioned tens of thousands of people on workfare because people had no way of knowing what rules they were subject to.

"It beggars belief the DWP can contemplate retrospective legislation - more rules people would have had no way of knowing - to avoid paying some of the poorest in society the social security they are due."

And she attacked Labour for appearing to support "the government's unethical position."

Boycott Workfare will target firms involved in the controversial scheme in a week of action starting on Monday.