How much does a year's imprisonment cost the rest of us, compared to a year's benefits? Isn't it around the £20,000 mark?
And, as naillit has pointed out, numerous times, once they have a criminal record, they become unemployable. (The finer points of civil versus criminal offences are beyond me, I'm just talking about how potential employers would react to an applicant's admission that they've been prosecuted for something which labels them as fundamentally dishonest and most small businesses woukd be driven into bankruptcy by even low levels of petty theft or other fiddles).
I'm not saying we should sit back and let it happen, I'm just trying to think up better alternatives. Unfortunately, forced work - intended to pay back the amount claimed fraudulently - requires food and accommodation for the duration, so we would still have to pay out so as not to have people starving to death, or dying in the street, while they do so. All of which is, also unfortunately, too resemblant of the workhouse system for most people's comfort.