Definitely crack down harder on fraud.
And basically, a return to the ideology that the Welfare System started with, ie: that it is a safety net for those in need, and should never be a lifestyle choice.
There needs to be a far greater differential between the highest possible income on benefits, and the income from the lowest paid job, so that people have the incentive to work and support themselves wherever possible.
Simplify the system.
While you have people moving into work, and realising they are only £10 a week better off in real terms, then you'll have people choosing not to work. If benefits provided a basic standard - ie roof over your head, cheap, but healthy food, necessary medical treatment, and the means to travel essential journeys, but not a lot more, and if working provided enough money for people to have choices, and to enhance their lives with all the other things they want, then more people would be in employment like a shot.
I don't know the detail of how you achieve these things though. I would also like to see disincentives for people who can't support themselves from having more and more children - eg if you already have 3 children, are unemployed and don't have adequate housing for more kids, then there should be adequate disincentives so that you don't go and have another kid. But it's very difficult to know how to achieve that, because obviously once children exist, a civilised state has a duty to protect them