Welfare firms wrongly target 1,000s for cuts

Last year, with the help of sub-contracted private firms, the coalition sanctioned the benefits of 500,000 people - stopping them for between one week and six months because of a perceived infringement in their claim.

That compares with just 139,000 in 2009 in Labour's last full year in government, Corporate Watch figures show.

But the research group revealed that private firms hired on multimillion-pound payment-by-result contracts to run the government's Work Programme - including Serco, Seetec, Working Links and A4E - have argued that the figure should have been much higher.

This is despite their poor attempts to convince the Department for Work and Pensions to rubber-stamp their own suggestions, with just 40,000 of their 110,000 referrals approved.

The private firms cannot sanction benefits themselves, but can refer "infringed" claims to the DWP, which decides whether or not to halt people's payouts.

Freedom of Information data showed that outsourcing giant Serco recommended that 9,090 claimants should be sanctioned, but just 2,230 were approved.

Public-private partnership Working Links referred the most cases for punishment at 11,910 - but only 6,210 were accepted by Jobcentres.

And A4e, already accused of a number of fraud allegations, saw Jobcentres accept only 3,000 of their 10,120 referrals.

Corporate Watch warn that even though Jobcentres denied many referrals by private firms there is still a much higher proportion of people having their benefits cut than in previous years.

It said that the government seemed more keen on cutting benefit costs than getting people back to work.

Disabled People Against Cuts member Linda Burnip said: "They think that by sanctioning more people more will get back into jobs.

"But the reality is that many disabled people need complex support in their jobs, particularly for those suffering a mental illness."

Employment Minister Chris Grayling said private firms do not receive financial awards for punishing jobseekers.