The majority of the public want benefit spend monitored, according to a poll, leading to fears the Government’s rhetoric around 'problem families' and 'scroungers' is shaking people’s faith in the welfare state.

Think-tank Demos polled 2,052 adults, which revealed that 59% of them believed the Government should control what people spend the new Universal Credit on.

However, the figure rose sharply when respondents were quizzed, for example, about whether those with a substance or gambling addiction should have their spend monitored with 77% saying yes. Over two-thirds of the sample agreed the Government should stop all recipients from spending their benefits on gambling; while over half agreed with the Government stopping people spending their benefits on unhealthy items such as cigarettes or alcohol.  

Demos suggests the findings show that many now view the welfare state as a “form of charity towards the poor, not a social insurance for all”.

Over 65s and, somewhat surprisingly, 18-24 year-olds were the two most likely age groups across all questions to call for Government controls. The most common reason cited being “it’s the state’s money after all”. The survey showed 27% of AB class groups (higher and intermediate managerial, administrative or professional occupations) and 14% of DE groups (semi and unskilled manual workers and unemployed) cited this explanation.

Demos’s deputy director Claudia Wood said the findings “paint a worrying picture of a nation divided between welfare claimants and the rest”.

She said: “If the majority still saw the welfare state as an insurance scheme - a contract of protection in return for contribution - then people would be more supportive of autonomy for benefit claimants.”

She added: “The Government’s rhetoric around 'problem families' and ‘scroungers’ is clearly shaking people’s faith in the welfare state. Those wishing to restore it will need to find a response that reassures a nervous public.”

The results also build upon the findings of the recent British Social Attitudes Survey, which found the percentage of people who believe Governments have a responsibility to the unemployed to have enough to live on has plummeted from 85% of voters in 2001 to just 59% in 2011

From next year, Universal Credit will replace six income-related benefits including tax credit, housing benefit and jobseeker’s allowance. Claimants will receive a single monthly payment directly, leading to fears those not used to budgeting monthly sums could be at risk of not paying their rent or other bills.

The Demos survey revealed that just 1 in 4 think direct payment of housing benefit is a good idea; highlighting a sceptical response to the Government’s current pilot of the scheme.

The Demos survey forms part of a wider piece of research supported by MasterCard, exploring the role that prepaid cards might play in the delivery of direct payments and benefits under Universal Credit.

Marion King, president of MasterCard UK and Ireland, said: “The roll out of direct payments and the introduction of Universal Credit have the potential to increase financial inclusion, especially if the combined payment is loaded onto a pre-paid card. This is because the card will give access to more ways to pay for goods and services while simultaneously enabling individuals to budget and save. Prepaid cards can also provide local authorities with the ability to monitor and control spending where appropriate.

“It is important that the subject of control be discussed, because some local authorities are already using this technology in a limited fashion. This is no longer a hypothetical debate.”

The Government is seeking providers who can supply products with extra budgeting functions to support claimants as they move to the new Universal Credit from next October.

It said it expects interest from a wide range of financial providers, including high street banks, mobile phone operators and prepaid card providers. Welfare reform minister Lord Freud (pictured) recently announced the Government was making between £80m and £145m available to initially subsidise the new solutions.