Examination of witnesses (Questions 20
- 39)
TUESDAY 21 JULY 1998
RT HON
FRANK FIELD,
MP and MS
HILARY REYNOLDS
Ms Hewitt
20. Let me pursue the issue of the children
in shifting and reconstituted families; as Frank said, the problem
of a child with two names or a child whose name changes and there
may then be a second claim. Can you explain what is the legal
basis for a claim for child benefit and how does that change if
a child's place of residence changes or if the legal custody,
legal residence, for that child changes? At what point might you
become aware of the change in the situation and at what point
should the parent be notifying you?
(Ms Reynolds) From the point of view of the customer,
the customer gets a claim pack, fills it in—it is usually
the mother but not exclusively—if somebody else wishes then
to claim for that child, the first claim has to cease before the
second claim can start. I think where we have a problem is on
the issue of control; as the child is transferred in care it sometimes
takes on the name of the next parent along. We do have checks
in place which link children back to their child reference numbers,
their dates of birth and the like, but it is that shifting around,
as you say, after the child started out where we have particular
issues. I am trying to think of the procedures. I am not sure
of the legal entitlement. I am thinking of when I have claimed.
21. It is the parent's residence?
(Ms Reynolds) It is the parent with care who has
residence in this country who claims the child benefit in respect
of an individual child.
22. Let us say, some years after the initial
claim, the father not living with the mother successfully claims
custody and claims care of the child and the child moves, the
father then applies for child benefit on the grounds he is now
the parent with care, do you, for instance, request a birth certificate
at that point for that child?
(Ms Reynolds) Yes, we do, and I can say that because
my husband has recently claimed for ours instead of me. Yes, you
have to go through the whole process again. It is like a repeat
claim. They ask for the previous child reference number.
23. So that should deal at least with some
of the problems, even though the child may have changed surname?
(Mr Field) One of the worrying things is not just
the fraud aspect but the incorrectness we found from the survey.
The Green Paper was entitled, Fighting Fraud is Everybody's
Business. It is not just about helping us counter fraud, it
is also people feeling they have a duty to keep their records
accurate. If in fact we have to spend a great deal of time trying
to keep records up-to-date because people have not informed us,
then that is departmental time being taken up which could be more
profitably used. That is the message we do want to get over to
people. People tell the post office when they have moved, they
probably tell their bank that they have moved and one or two others,
but they do not necessarily think that it is as important to tell,
for example, the child benefit centre they have moved.
24. That makes sense but would it not be
more sensible for one point within Government to receive the information
that somebody has moved address and simply make it available to
other government departments? Since if you are a car licence holder
you have to report a change of address with quite strong sanctions
to the Driver Vehicle Licence Agency, why is that not the central
point to notify that you have changed your address?
(Mr Field) It is a good point and we must think
about it. It is similar with what we have done with deaths. There
is a central point and therefore we can read in to see, when you
are claiming for a child, whether that child has, sadly, been
recorded as having died. That was not the case before, but it
is now. So it extends that principle and I think it is a very
good idea.
25. It is a complete waste of time for citizens
to have to tell 20 different government departments one piece
of information.
(Mr Field) Moving forward to a one stop shop!
26. On this business of error, clearly the
address is an important piece of information and if it is wrong
on your files then all kinds of problems flow from that, but a
large item of error is an incorrect post code. Does this matter
very much?
(Ms Reynolds) Where I come from is that the integrity
of our data is compromised. We rely heavily on name, address,
date of birth, post code, which actually ties somebody down quite
closely using a standardised form of information. It does not
affect the benefit but it does compromise the integrity of our
data and makes it more difficult to read across to other benefit
systems where we may have a different post code and thereby may
actually miss a linkage. So it is an issue for us on the integrity
of the information we process and thereby our capacity to turn
that into intelligence.
27. Are there other aspects of incorrectness
which you discovered in the review which you are worried about?
(Ms Reynolds) Certainly the failure to declare
a change of address is the big one for us. The other ones are
where the child's name has changed for whatever reason, and that
is catching up with them because that also has an impact as they
move into adulthood, for instance. Other than that, it is around
mis-spellings———
Chairman
28. Mis-spellings?
(Ms Reynolds) Yes, of addresses.
29. So is some of this 27.2 per cent of
cases where things are wrong because of changes of circumstances,
things of that kind?
(Ms Reynolds) Yes, what we are saying is that
27 per cent of our cases, they are correct technically in that
the right benefit is being paid in respect of there being a child,
so benefit is not affected, but we hold the wrong information
on that person. It is a question of cleaning up our information.
What this review tells us is that a quarter of the information
held on our sample had an incorrectness in the information held,
which suggests to us that we have some improvements to do on the
information systems.
30. If that is true of child benefit, what
must it be like with other benefits?
(Ms Reynolds) Do not forget though that child
benefit, once set up, tends to run reasonably automatically. It
is not that you are signing up every two weeks and having face-to-face
access.
(Mr Field) It is really important, as Hilary said,
for our data scanning if we want to read across to try and see
if there are inconsistencies by using IT to help us track down
fraud. It does mean that we have to try and move as quickly as
possible to a way of claiming benefit, either Patricia's route
which is actually a single entry where a lot of effort is put
on actually justifying that claim, or that there is a caucus of
information which has to be done in exactly the same way. So the
data shows "Frank Field", not "F Field" and
it has to be the full address with the postcode, and it has to
have my national insurance number. In that sense, you can actually
read across much more quickly. Otherwise, of course you are getting
data thrown out which you have to check up on which you would
not normally have to check up on if people had made those claims
in an identical way.
Ms Hewitt
31. Yes, although you can do the data-matching
on the basis of, say, two out of four hits, so "Frank Field"
and "F Field" with the same date of birth is a strong
presumption and you would do that as a practice.
(Ms Reynolds) Yes, we do that anyway and we have
a large data-matching service which does that, but when you have
got however many people on our database, an awful lot, then you
have got a lot of John Smiths and by the time you are adding the——
32. But when you have more records than
there are people, then the scope for a mis-match is even greater.
Frank, you were referring to the issue of picking up or failing
to pick up people who have been legitimately claiming, but who
then leave the country. Would it significantly assist this forward
production effort if the Home Office were to be keeping embarkation
records?
(Mr Field) Well, one of the things which has followed
immediately from the Green Paper is that we have a ministerial
working party established which will meet for the first time next
week. Clearly this is an area that we want to think about and
discuss. We are not, however, just waiting for the Home Office
or any other department, though we want to see movement across
government where it is proper for that to occur. We now make special
records ourselves on those who legitimately come to this country
and claim child benefit for their children. What we are now thinking
about is how we will use that information and what ways there
are to do random checks to see whether the children are still
here.
Ms Stuart
33. Turning it the other way around of a
UK citizen, and this is a constituency case—the mother and
father in the UK with two children, he goes and works in an EU
country and takes the two children with him, and then following
filing his tax return in the UK which in which he declares that
he is a UK citizen paying tax, but abroad, he then gets a letter
from the child benefit people querying who actually has the children
and whether the UK claim for child benefit was still valid, so
there is obviously something going on of matching when the UK
citizen goes abroad and still claims here. Would you like to enlighten
me on this process?
(Mr Field) Well, as you started—I was dreading
your asking—why are we still paying it when there was no
check. So I was rather pleased that the question had been raised.
34. The constituent said to me, "But
I am still here, so how do they know?" Who is exchanging
data with whom here?
(Mr Field) First of all, I do not know, but even
if I did, I am not sure whether I would tell you!
35. So something works, but we are not sure
why.
(Mr Field) I do not know why. I am sure other
people know why.
Mr Wicks
36. There is no evidence yet that anything
works. We have not yet heard anything, have we, in terms of solutions?
(Mr Field) We have. We have heard of a mother
coming to complain because there are question marks over whether
she has been claiming child benefit because she is still here,
but the children are not, and it is a jolly good question to ask
her.
Mr Roy
37. Frank, could I go back to the fraud
by people leaving the United Kingdom where in the memorandum from
the Department, it states that one in seven people leaving the
country who were in receipt of child benefit failed to declare
their departure and continued to receive child benefit. One in
seven is obviously an unacceptably high figure for anyone. Could
you expand on the Department's current strategy for dealing with
these sorts of people?
(Mr Field) It is two-fold. There is the question
which was raised earlier: to what extent do we need the help and
further co-ordination with other government departments to be
as effective as it can in protecting taxpayers' money? That will
be an issue which we shall look at at the ministerial working
party. The second is: what is it proper for the DSS itself to
do to protect taxpayers' money? We do now log carefully those
who quite legitimately come to this country and claim child benefit.
What we are now debating is how we will use that information significantly
to increase the chances of catching people who are defrauding
the system. One suggestion might be, following what the previous
Committee had suggested in this area, instead of sending the normal
form which is sent asking them just to check the information,
to also which schools are they attending. We would then think
in cost terms of whether we do a random sample of those schools
so that the word would go around that we were actually changing
the balance of probabilities of people being caught.
38. Could I also take you back to the point
that Patricia raised about the embarkation records. The evidence
we have got here relates to those citizens who were non-EU and
non-Commonwealth and I know there was a change in 1994. How can
the greater security be applied to departing EU and Commonwealth
citizens in light of the changes?
(Mr Field) Well, there may be some movement there,
Frank. But if there is fraud, it arises because people have registered
for benefit and claim benefit. My first instinct is actually to
protect those records and use those records because we know that
these are people who have turned up, come into the country and
legitimately claimed child benefit. We should make much greater
use of that information which we have not done in the past. We
are considering how we can best do that. Considering the various
costs which would be involved for different strategies. We do
know everybody who arrives here not only wants to, but does actually
claim child benefit. So we have a total record rather than using
some other department's records which may, or may not, be as accurate
as our records of people coming here. Of course we should match
that with any information we have about people leaving and follow
that up. But given that there are worries about the ease of movement
of people coming into this country then leaving it and having
child benefit paid through their bank accounts, then I think we
do need to back that up with consideration of what random checks
could best increase the chances of uncovering fraud.
39. On the question of the bank accounts,
obviously people are only asked on a one-off basis whether they
want their money put in the building society or bank, but understandably
you do not actually ask people to reconfirm at a later date whether
they still want it paid it or whether they are actually getting
it paid in. Is there a case for a reconfirmation at some point?
(Ms Reynolds) There is an annual letter which
goes out asking you to let them know if there is a change, but
not if there is no change, so we have got that at the moment.
(Mr Field) But also one of the other initiatives
following the Green Paper has been that the Green Paper has gone
to a panel of people in the private sector. All of them are concerned
with financial services, all of them interested in fraud. One
of them, as you know, Lord Cuckney, has played a part, and before
this Committee, in restoring much of the funds which were stolen
from the Maxwell pensioners. One of the areas we want to talk
to them about is not only how would they improve our strategy,
our security and our care with taxpayers' money, but in what areas
might we want to share the information where we could legitimately
do so. At the moment, for example, when people leave the country
and are being paid by ACT, it is not easy for us to get that money
if it remains in their accounts because the banks operate under
different rules from those which we operate under. That will be
an area that we will want to discuss with them. There were lots
of disadvantages in the old fashioned method of payment, but at
least people signed for it. It is more difficult proving fraud
through ACT and doubly difficult if the people have disappeared
abroad.
Chairman: Can we turn
to the third area. You are right quite clearly identifying 16
to 19 year old fraud and embarkation problems, the third real
area of concern is the reconciliation of fraud via National Insurance
Numbers with child benefit accounts. Gisela Stuart has some questions
in that area.
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