Examination of witnesses (Questions 20
- 39)
WEDNESDAY 18 FEBRUARY 1998
SIR JOHN
BOURN, KCB,
MR PETER
MATHISON,MR
DAVID RIGGS
and MR FRANK
MARTIN
20. Thank you. If I could move on to the
old Mobility Allowance of which there are a large number of cases,
I understand. Is it correct that some of those cases have not
been reviewed for 20 years? If so, how do you know that the payments
which are made under that system are still appropriate?
(Mr Mathison) It is the case that some of those
may not have been examined for that length of time in that we
did not have a definite rolling programme of reviewing every single
case.
21. Do we know how much money is involved
in that?
(Mr Riggs) I am afraid I cannot give you the answer
to that.
22. Can you give us a note on that?1
(Mr Riggs) The Benefit Integrity Project is a
rolling programme of reviewing all cases.
23. That started quite recently though?
(Mr Riggs) It started quite recently.
24. It is very hard to see how you could
justify not reviewing those cases for a period of 20 years.
(Mr Riggs) I agree.
25. Thank you. Finally, the advice I think
of the Benefits Agency Disability Benefit Directorate is to strengthen
the DLA claims procedure to make it more difficult for fraudsters.
When do you think you will be able to measure the results of that?
(Mr Mathison) I think it would take a number of
years to be able to confirm the results of that. I think again
it is also difficult to rely on one single measure of whether
the work we have done has been effective in ensuring that only
those people are entitled to it and they are on the right rate
because circumstances change all the time. It is going to be difficult.
We will need to look at the range of measures that will identify
how effective that has been. The Safeguarding Project arose out
of concerns over entry into DLA and there were changes made both
to the form and to the procedures we have. It will take some time
to track that through to see how effective that has been. We always
have this difficulty. It is difficult knowing with changes in
volume and other factors that influence it what that rate might
have been if we had not taken that action we have taken. It is
very difficult to have one measure and be absolutely precise about
it. One of the measures we are looking at is absolute level of
caseload against other trends that are occurring around health
and a variety of other attributes that might give us that information.
Mr Hope
26. I am adding up some of the numbers.
If we take what appears to be errors and fraud together for the
various benefits, Income Support, DLA, Family Credit and so on,
we are looking at figures of error and fraud of around £3
billion as a rough figure in this document. Underpayments, people
not being paid what they are entitled, are to the tune of something
like £400 or £500 million and yet the aim of the Benefits
Agency is to "pay the right money to the right person at
the right time, every time", as it states on page 17. Why
are you failing both the taxpayers and the customers of the Benefits
Agency so badly?
(Mr Mathison) I accept that the size of the figure
is unacceptable in terms of having that as an aim. I added "every
time" at the end in order to drive home to people we were
so far away from where we needed to be that we had a tremendous
amount of work to achieve that. There is an inherited situation
and some of the problems are deep seated. I have always said that
there was no simple solution or an overnight solution to it. It
needed a programme of work over a fair period of time. Some of
it is infrastructure around our basic accounting systems, around
new IT to support the work. If you take Income Support as an example,
a clerk cannot process an Income Support claim without going in
and out of the computer and doing clerical pieces in between and
until we get new technology which is modern based technology we
will always struggle to achieve that aim. I accept that as a long-term
goal to really strike home to people that it is totally unacceptable
to have fraud and incorrectness which amounted to a greater sum
than our administrative costs. I came in from outside and I personally
could not believe it when I first came in. It needs a determined
effort which is quite methodical over a long period of time.
27. This has been going on for nine years,
for nine years the accounts have been qualified, yet you did not
do a review of fraud until 1994, you said earlier. Can you explain
that?
(Mr Mathison) I am not making excuses but I have
only been in post for two years.
(Mr Riggs) I joined the Benefits Agency in 1991
and in 1992 we began to study the level of fraud that might or
might not be there. There was a lot of speculation around what
the levels were. At that point we began to realise the scale was
likely to be much greater than had ever been conceived before.
What we have done in those benefit reviews that we have done is
provide quite a good picture of where the losses are occurring
and we have designed a lot of responses to that, visits, reviews,
data matching and co-operation with other parties in order to
tackle these abuses. Unquestionably, we cannot tackle some of
the causes of fraud in the way we would want to with current technology.
For example, it remains possible for a couple to claim each for
the same child. We have developed a rule which after the event
matches the record of those two individuals and identifies that
both have got a claim for the child. Ideally you would detect
that as soon as it was attempted at the first claim gateway. Our
IT cannot do that. Those are the sort of things we have identified
as specifications for the new world. In the meantime we have put
in short-term actions.
28. The difficulty of the ball passing along
the line until you have got nobody to fling it on to next is that
it does not leave us with a great deal of confidence. You are
saying to us that you have grasped the size of the problem but
the sums of money are vast. I was simply staggered to see these
kinds of figures adding up. £2 to £3 billion is such
a huge sum of money. I understand you are putting those systems
into place but to know that there is £400 million worth of
underpayments means there are people out in the community not
getting the benefits to which they are entitled as much as people
getting benefits to which they are not entitled. That is why there
is so much distress and anger and, I might add, fear at the moment
in the community because of this kind of difficulty. I understand
that you were not in post when all this was actually being mishandled
but I have to say to you that I am not happy at the legacy that
we have now created and as to how confident I am that you are
doing something about it. You said earlier that you are not sure
you can give an accurate estimate of what fraud would be, you
do not know what you do not know and therefore you could not set
down specific targets for getting that fraud down. I am not confident
that you can now demonstrate in the future that this is a problem
that is going to be solved.
(Mr Mathison) I totally accept that the level
of fraud and inaccuracy is unacceptable. Like you, I was horrified
at the size of the numbers of the total programme expenditure
against our administration expenditure. I do believe that we have
recognised that, have analysed many of the causes of what is contributing
to that and have set in motion a programme of action over a number
of years which has started to address that. Our primary targets
are around accuracy not speed of processing. They were initially
speed of processing so people in the offices were under tremendous
pressure to clear a case quickly when they knew that they were
lacking information. There is a whole series of steps particularly
around focusing on the fact that we have a duty and obligation
to ensure claims are correct.
29. Your target is 13 per cent. That is
still going to be one in eight where you have not successfully
achieved it or have I read the Report wrong? Is that correct?
(Mr Mathison) In terms of a processing error on
an individual claim that is correct, the current target is 87
per cent and we are moving towards that. The monetary error has
dropped to 3.3 per cent and we have a balance between addressing
those errors in processes which have the greatest monetary value
rather than put all the effort into something that does not. 30
per cent of the errors are of a value of less than a pound. It
is regarded as an error if we start the date of a claim one day
different than it should have been when the case is reviewed so
there is a whole host of errors (which I do not accept) but in
terms of procedural errors they do not have significant value
or major impact in terms of on-going error rates.
30. I will move on if I may specifically
to DLA, Disability Living Allowance. Can you just describe to
me the difference between a fraud, a mistake and an error and
whether or not the figures we are looking at here encompass all
three?
(Mr Mathison) Which figures are you looking at?
31. £499 million estimated fraud. Does
that include where a mistake has been made by a claimant, where
an error has been made by the Department or is it only where someone
has deliberately set out to defraud the system?
(Mr Mathison) The £499 million figure is
the sum in the benefit review of those cases which were classified
as definite fraud, confirmed fraud, in other words we felt there
was sufficient evidence.
32. It was not just a mistake.
(Mr Mathison) We felt there was knowing and clear
evidence which we would be able to follow in terms of confirming
this fraud. There were then four levels of suspected fraud and
that was level 4 and level 3. So it is level 3 and level 4 of
suspected fraud on the evidence that we had on the day of that
visit by trained people that they believed there was knowledge
in terms of the circumstances.
33. In Belfast we were told that one of
the reasons was because of the vague wording of some of the assessment
criteria that people were filling in self-assessment forms and
it was less about people trying to defraud the system and more
about here is a wording that says he cannot get around very well
during the day, so the vague criteria made it difficult for people.
Is that the case here?
(Mr Mathison) There is a difficulty on DLA in
terms of how we obtain information from the individual concerned
about what impact their particular condition or set of conditions
has on their mobility.
34. I was thinking of the specificity of
the criteria for award. Is the wording too vague or not?
(Mr Mathison) The wording has been reviewed by
a range of people and there has been a range of consultation with
disability lobby groups, I cannot quite recall when but I think
within the last two years, on the content of the claim form, the
design of it, the wording on it because there were a lot of complaints
about the size of it because it is quite a bulky document. We
worked with disability groups to see how we could try and reduce
the size of the form and the content but still obtain information
from people we require about their needs. In the form specific
questions are asked but there are generally various blocks within
the form for a person to add anything they believe should be put
in there.
35. The Benefit Integrity Project, which
is mentioned in the appropriation accounts and which was designed
to deal with this possibility to try and cover the level of fraud
and try to do something about it, has come under severe criticism
from disabled people and organisations of disabled people as being
unfair and picking on the wrong people. You mentioned earlier
some people had been called into the review process who should
not have been, for example. What is the success rates on appeal
of somebody reviewed by the Benefit Integrity Project and who
have been turned down or had their benefits reduced and they then
appeal? What is the success rate?
(Mr Mathison) At the moment the decisions where
it has been reviewed and it has been either disallowed or reduced,
311 appeals have been lodged but none of them has yet been heard.
36. So none of them has been heard?
(Mr Mathison) None of the appeals has been heard.
37. We do not know if the Benefit Integrity
Project is getting it right even though it was wrong before?
(Mr Mathison) We do know that of those that have
been reviewed, have been looked at and a decision has been taken,
two-thirds of those have been disallowed or reduced. Two thirds
of those people asked for review and those have been reconsidered
again but not as part of the formal appeals process and three
quarters of those have remained unchanged.
38. I think I got lost.
(Mr Mathison) I have not got the exact numbers.
39. Right, but I am concerned that in rightly
endeavouring to deal with the problem of fraud we are actually
making more of a problem amongst particularly the disabled community
which is feeling it is being unfairly treated. I wish to see two
things happen. As a taxpayer I wish to see best value for money
by getting the right amount of money to the right people at the
right time in the way you are suggesting and I wish to see the
disabled community in the case of that particular benefit feel
confident in the system that it is trying to meet their needs
rather than putting them through a process that is not designed
to meet their needs but just save money. Can you reassure me of
that?
(Mr Mathison) That is what we are trying to achieve
and we have reviewed it since the Benefit Integrity Project started.
The Secretary of State announced on 9 February that in any cases
where there are the changes, i.e. we have reviewed the case and
we would be lowering or disallowing, we should obtain some additional
information in order to validate that potential decision.
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