| Previous Section | Index | Home Page |
6 pm
Mr. David Porter (Waveney): This is another Opposition day, so the Opposition have another chance to pick a stick with which to beat the Government. Opposition Members seem to think that benefit fraud is an easy subject to sound tough about and that, by sounding tougher than the Government, they can steal some more Conservative party clothes. I suggest that they are wrong on both counts. Over the years, the Labour party's attitude to spending other people's money, its stress on rights ahead of responsibilities, and its often shameful record on the local government side of benefits, make its claim that it is the taxpayers' friend sound somewhat hollow.
No one has argued--and no one will--that we should not reduce fraud. As has been said, any reduction in benefit fraud has a double benefit: it stops money going to criminals, with the message that that sends in the law and order debate, and it means that more money is available to those who need the safety net of the state.
I serve on the Education and Employment Committee which, among other things, is examining the pilot schemes for the jobseeker's allowance in October. Last week, Committee members visited an Employment Service jobcentre and a Department of Social Security Benefits Agency office in Peckham, which are next door to each other. I drew from that visit the obvious conclusion that we need to merge the administration of employment-related benefits and social security benefits.
When I visit the Benefits Agency office in Lowestoft in my constituency, it seems obvious that the scope for confusion, fraud, error and sheer frustration could be reduced by linking the administration of housing benefit and council tax benefit with social security benefit.In child support cases, when there is a discrepancy between what one parent claims to earn and what the other parent says he or she earns, linking Inland Revenue information with benefit administration would surely
serve as a disincentive to cheating the system. I believe that going the whole way and integrating the entire tax and benefit system would not necessarily be a bad thing. Such a move would send the right message: benefit fraud is robbery like any other form of theft.
We have laws to stop people robbing banks and each other, but those crimes are still committed. Laws cannot prevent every fraud, but we must make it as hard as we possibly can to commit fraud. With the advent of technology on a large scale and at a reasonable cost, we have a potential weapon against fraud of immense potency. I wonder whether we are harnessing it to the full.
We know already about DSS plans to link local authority and Benefits Agency computers to combat exclusively housing benefit fraud. As my hon. Friend the Member for Colchester, North (Mr. Jenkin) said, multiple claimants can be spotted with any simple package of software. The use of false names, the names of the dead and post office box numbers, and the conniving of householders to help others, are harder to spot, but they are not beyond the realms of current technology.
Smartcard technology and the identification card have been offered by some as a panacea, but we should remember that stolen or forged ID cards would swiftly become valuable items for sale on the black market. We have personal numbers for national insurance, the national health service and the Inland Revenue. A single self-chosen personal identification number might help also. There has been talk about having to amend the Data Protection Act 1984 if dedicated systems freely exchange information. I ask my hon. Friend the Minister to clarify in his winding-up speech whether increased use of technology will mean reform of the Data Protection Act.
Is it not incredible that we can surf the Internet and have a guided tour of the White House for the price of a local telephone call in the United Kingdom, yet my constituents cannot go into the benefits office in Lowestoft and view their Child Support Agency case on a computer screen in front of them? The Child Support Agency situation highlights the need for an integrated system to allow for fairer and more accurate assessments, which would, in turn, encourage compliance.
The need for parents who do not have continuing care--for reasons willing or unwilling--to shape the concept of child support is paramount. The need to assess income so that no one is better off on benefit than supporting his or her children is a separate but related part of the equation. The need for unemployment and training support that does not make it better to receive benefit than to stay in work is also part of the equation. What people earn in employment or through self-employment has a direct bearing on their dealings with the Child Support Agency.
If we had a better system that recognised the need of the absent parent to be in work or training as part of a long-term commitment to the children, that would go a long way towards increasing the credibility of the system. If the system had integrity, that would act as a disincentive to defrauding it willingly. There must also be a little more flexibility. For example, if parents share custody of children regularly during the week on an agreed and working basis, surely child benefit should also be shared on the same agreed and working basis.
My final point relates to the culture of fraud. We know that a downside of the welfare state is that it encourages dependency. Further reform of the welfare state in the next
decade must increasingly address that problem, but another little noticed consequence is a reluctance to do anything about the problem while getting angry and blaming the Government. I shall give the House an example.
I am sure that all hon. Members have been approached by constituents who are livid because someone near them is working while claiming benefit. We might be given some details of the scam when we ask for them. I was told recently about the existence of a pool of battered, anonymous cars that are shared by a number of people who are fraudulently obtaining benefit while working a night shift at a factory and who return home in a different car every day to throw any observers off the scent.
We often press our constituents for names and for chapter and verse of fraudulent behaviour, but they are reluctant or refuse to give names and addresses--possibly because they are afraid of reprisal. I am told that the Government are to blame, but I am not given the names to report to the fraud department. In my experience, the fraud department and Benefits Agency offices do a good job often with few staff, but they cannot catch the cheats without information.
Mr. Bernard Jenkin:
In my experience, when we are given the necessary information, we do not receive any feedback about the results of any investigation. The result is that the fraud continues to be perpetrated, no action is taken and no reason is given, because the Benefits Agency will not discuss individual claims. There must be a more active exchange of information and much better feedback in order to encourage society to police itself and to encourage people to hand over the information so that they can see the results for themselves.
Mr. Porter:
My hon. Friend is absolutely right. I understand that there may be difficulties if a fraud investigation is conducted, it proves to be unfounded and a person is identified unnecessarily, but I agree with the thrust of my hon. Friend's comments.
Going one step further, the fraud departments link in with the police, Customs and Excise and with other agencies. I wonder whether there is a case for transferring benefit fraud investigations wholesale to the police in order to strengthen their work. We cannot change overnight the culture of dependency or the view that the benefit system is a legitimate target for theft. I suggest that we need a better run, more integrated, non-overlapping and non-wasteful administrative machine. If that is achieved, the staggering losses resulting from fraud will be cut to a minimum.
Miss Kate Hoey (Vauxhall):
I very much agree with the hon. Member for Waveney (Mr. Porter), which shows that there can be--and is--cross-party consensus on this important issue.
As a member of the Select Committee on Social Security, whose report we are debating, I am pleased to have the opportunity to raise once again some of the
important issues that the Committee uncovered in its investigations into housing benefit fraud. I am also pleased to be able to challenge again the whole attitude to fraud at national and local authority level.
This debate must put to bed for good any lingering doubt that anyone has ever had that attacking benefit fraud is somehow attacking the poor. It is quite clear that such an attitude was held in certain parts of the country by certain people, but that is no longer so. It is clear, certainly to Opposition Members, and generally on both sides of the House, that the people who suffer most from benefit fraud are those in greatest need.
I want to refer to the Select Committee's recommendation on the Data Protection Act 1984. It is important to point out that the evidence that members of the Committee took questioned whether the Act was working in the interests of people who were trying to root out fraud. We took evidence from Andrew Webster of the London boroughs fraud investigators group, who said:
The Association of Chief Police Officers told the Committee:
Earlier, the Secretary of State challenged the Opposition's assessment that there is £2 billion-worth of fraud, and other hon. Members have said that the figure was an exaggeration. No one can say that the figure is an exaggeration, because no one knows the real extent of fraud in the benefit system. I wonder how many people in Haringey, when asked to put a figure on the extent of benefit fraud before the investigation began there some years ago, would have come near the figure that has emerged from the small pilot study.
I certainly do not have any hidden agenda on exaggerating the amount of fraud, because I happen to represent a borough whose name was, until recently, synonymous with fraud and corruption. I am proud to represent the area that includes the London borough of Lambeth. Indeed, I am even more proud now that the borough is starting to get its act together and beginning to adopt an approach that is in the interests of its residents.
Lambeth has had a history of problems relating to allegations of fraud and corruption, especially in the late 1980s and early 1990s. During the past two years, however, the council has been committed to breaking with
the past and tackling the root problems in its management and culture. That commitment was epitomised by the appointment of the new chief executive, Heather Robbatts, in April 1995. With the support of all the political parties on the council--it is, of course, a hung council--she has implemented a programme of sweeping changes in the council's management, personnel and operations. With the support of its members, she is beginning to change the whole culture of the council and its attitude to fraud.
A key part of that approach has been to improve the council's arrangements for dealing with allegations of fraud and corruption, which has involved the reorganisation of the internal agencies, responsibility for the investigation of fraud and corruption and the creation of a corporate anti-fraud team--CAFT--which reports directly to the chief executive.
The effectiveness of the new arrangements was demonstrated in the first few weeks of the establishment of CAFT by something known as Operation Jobson. In April 1995, the council and the Benefits Agency initiated the provision of a complete listing of the council's payroll data on employees for the Benefits Agency. The agency checked every employee against its computer records. No one queried civil liberties there. When the corporate anti-fraud team was set up in October 1995, 120 employees appeared to be fraudulently claiming benefit. By December 1995--only six months ago--the figure was 150.
CAFT took on responsibility for that exercise in October, and a team of hand-picked officers from the council's internal audit department were seconded to investigate and facilitate disciplinary action. That action has continued. Interestingly enough, 59 of the employees identified instantly disappeared from the council's employ--if they ever existed. The lessons learned from the exercise were that effective action required the detailed co-ordination of investigation and management action, and that CAFT, the chief executive and the head of personnel should establish a team that had power to intervene and co-ordinate work across all the council's departments.
There is no doubt that, in some local authorities, for different reasons in different departments, there is a culture of not really wanting to get to the bottom of what is happening. It was crucial to the setting up of the Lambeth team that it reported to the chief executive, was given high status and was seen as permeating the entire council and having everyone's commitment.
An anti-fraud policy statement was drawn up and circulated to every member of the council. The matter was taken very seriously. The matter may seem trivial to some people who think that people would not do anything other than be against fraud. The reality is that because of our attitude towards fraud, some people did not feel that it was their responsibility or had anything to do with them. They perhaps felt that attacking fraud was picking on the poor. Such an attitude had to be changed; a corporate attitude had to be taken.
The council is promoting whistleblowers. Wanting to shop one's mate if he or she is involved in a fraudulent act is no longer seen as something of which to be ashamed.At the end of the day, such people are working against the interests of those whom they have been employed to represent and support.
CAFT's duties are to consider not only benefit claimant fraud but contract fraud and educational awards fraud. The latter is another big type of fraud which certainly occurs in inner-city areas. Education grants are sometimes awarded when people do not attend college or use false names. Sometimes, the college for which people have been given grants in my borough has not existed. Employees claiming benefit is also a big type of fraud in local authorities. Other types of fraud include housing improvement grants fraud, private use of council resources, selling of council house keys--unauthorised tenancies--theft and misappropriation of council funds and equipment, and investigation of anonymous allegations.
CAFT brings all those types of fraud together. Fraud does not mean simply benefit fraud. All sorts of other public frauds are taking place and need to be taken on board as part of a partnership approach, which includes building an anti-fraud culture in the council, implementing a programme of fraud awareness seminars and maintaining close liaison with local police and the Benefits Agency.
I welcome what my local authority is doing. In a couple of months' time, when the team is complete, it will be leading the battle against fraud in the country. That is a terrific achievement for a borough that has had such a history. It is crucial that boroughs that accept the faults of the past and start to put them right should not be slated in the newspapers. Newspapers, and those who want to investigate fraud and mismanagement, should start looking at the boroughs.
I am not suggesting to the hon. Member for Colchester, North (Mr. Jenkin) that there is huge fraud in Colchester, but the fact that the borough has not even started to consider the matter makes me question whether it has any real determination to discover whether there is a problem. There is not a single borough in Britain that is not deeply involved in some kind of fraud. It is crucial that those boroughs that do the good work, and those chief executives and council leaders who take the initiative, are given credit for it and not slated by the media.
One matter which I keep raising but on which I do not seem to make much progress concerns child benefit fraud, which the Social Security Select Committee may shortly consider. I have a letter detailing someone's experience in trying to report a possible child benefit fraud to the DSS. It states:
Every year, recipients of child benefit paid by automated credit transfer receive a form asking whether there are any changes in their circumstances; if there are not, nothing needs to be said or done, so the child benefit continues to be paid into the bank account. One can have a baby in this country, register for child benefit, go off to live wherever and continue to receive the money.
People may say that that involves only a few people, but we do not know. I do not believe it is only a few people. I think that large numbers of people are abusing the child benefit system. They receive child benefit from an early age having had their baby here. They may be travelling business people. The irony is that it is not poor people who are doing this but well organised, quite rich people who are using London as a business place. They go into and out of the country, keep an address here, have a bank account and receive the child benefit.
What happens when the children reach the age of 16? Presumably, because child benefit is a means of obtaining a national insurance number, they can continue to claim benefit for the rest of their lives while living in Spain. It is astonishing that this matter has not been investigated more. Such matters must be investigated and fraud made much more difficult. No one ever checks whether a child exists or what school he or she attends. There are no
means of making such checks. It is a big area of neglect which should be considered seriously. I hope that the Minister will respond to some of the points I have made.
"I have to say that I sometimes wonder who the Data Protection Act is actually protecting, because obviously the genuine honest claimant has nothing to fear. The genuine honest person in this country has nothing to fear. The only people who hide behind the Data Protection Act are the criminals."
I am not interested in protecting the civil liberties of large landlords who are perpetrating housing benefit fraud and I hope that the recommendation on the Data Protection Act is considered seriously.
"There appears to be no clear authority for police to give Local Authority investigators details of previous criminal activity or other potentially useful intelligence."
It is absolutely certain that there is a need for co-operation between agencies. Indeed, one of the Committee's recommendations says:
"the Department of Social Security and the Data Protection Registrar should review the data protection legislation, and any law and practice on which data protection legislation is based . . . to ensure that the legislation does not constitute a barrier to counter-fraud work."
Data protection is fine, but it must not be allowed to get in the way of information on fraud coming forward.
"After obtaining the number of my local DSS office . . . from directory inquiries I initially rang seven times when the line was engaged. On the eighth occasion I got through and was transferred to the Child Benefit Section which was also engaged for three calls. At 11.30 am (an hour after starting the calls) I was successful in speaking to someone, who then just gave me another telephone number to call in Newcastle upon Tyne. This number was also engaged until 12.50 pm, then no answer at all until 1.05 pm, and then engaged again until 14.00 pm. I finally tried Directory Inquiries again who gave me a freephone number . . . which was engaged on five attempts.
abroad. The letter continues:
Just after 14.30 pm I was successful in getting through and explained the nature of my complaints against my neighbours, who have claimed Child Benefit for two years whilst renting out their flat in London and living and working"
"I gave the name, address, reference number etc. of the errant claimants and was told that they would be written to, but my name and address were declined. I went on to explain that I did not feel that a letter was a practical way of dealing with the matter, and offered the mother's address in London which was also refused.
18 Jun 1996 : Column 725
The Minister, to whom I have written on the issue of child benefit, responded to me at the end of March. He said:
My overriding impression of the whole experience is that my time was completely wasted. I am very surprised that it proved so difficult to report a benefit fraud, and fail to see why the DSS staff in London could not take the details and why I had to pay for all the calls."
"I appreciate your concern that a family might continue to receive Child Benefit by Automated Credit Transfer . . . after they have gone abroad. ACT is currently the cheapest and most secure method of payment.
Earlier, I had asked for information about Operation Rattle, set up by the DSS to investigate child benefit--the title is rather good, given what it was investigating--so the Minister went on to say:
Child benefit is paid to over seven million families in Great Britain, and in the vast majority of cases there are no changes of circumstances which affect benefit entitlement until a child approaches school leaving age."
"I should like to explain a little more about 'Operation Rattle', which was launched in November last year. This followed on from a pilot which showed that there was a loss of funds to the Department when people from abroad who were being paid Child Benefit by ACT returned to their home country and failed to notify the Child Benefit Centre.
and so on. He continued:
The Operation involves close working between Benefits Agency"--
"To date, overpayments amounting to £3 million have been identified."
I do not know how big the pilot was, where it took place or how such decisions were reached. The Minister went on to say:
"Payment is stopped immediately when a nil entitlement situation is discovered."
He then quoted some horrendous figures about the money that had already been saved as a result of the pilot, which amounted to about £8 million, even in that short time with such a small number of people.
| Next Section
| Index | Home Page |