June 14, 2006 2:30 PM

Derby Liberal Democrat parliamentary campaigner Cllr Lucy Care has called for a total overhaul of the way tax credits are awarded after new figures revealed that 8,700 families in Derby could face being forced to payback £7.3million worth of tax credits. This is due to overpayments made by HM Revenue and Customs.

Cllr Care said: "This is a hammer blow for many families on modest and low incomes in Derby. It is simply unacceptable, that well over £7 million of tax credits in Derby are still being overpaid.

"Last May, the government claimed that the system was working well for the vast majority of families. But today's figures show that the government is clearly in denial - in actual fact nationwide 44%, over 2.8 million people, received incorrect tax credit payments.

"The government has known of the failings in the tax credit system for years and these figures are yet more evidence that too little has been done to rectify them. Recent changes to the system are too little too late.

"Whilst thousands of families in Derby face an agonised wait to see if they have to pay back the tax credits, the government continues to bury its head in the sand and even blocks parliamentary scrutiny of this crucial issue. Families in Derby want to see the government finally taking action to radically change the way tax credits are administered."