Examination of witnesses (Questions 200
- 219)
THURSDAY 21 MAY 1998
MR PETER
MATHISON, MR
STEVE HEMINSLEY
and MR TONY
EDGE
200. What is your expectation of the transparency
in that process? I understand that there is some commercial sensitivity,
nobody is looking for secrets that are going to destroy a commercial
business's prospects, but this is a hugely important area, there
is a lot of staff employment at risk; can you give me an assurance
that somebody will put something into the public domain so that
we will be able to understand the process a bit more clearly and
see what the Ministers' options are that they are being presented
with?
(Mr Mathison) I need to check exactly what I can
do, under the procurement thing, but certainly my view is that
we would need to communicate and consult with a wide range of
parties around ideas which we believe may be capable of being
taken forward prior to doing anything about that. We do involve
the trade unions in it, and that is in the letter, because I talked
with the trade unions about my letter. When we received the proposal
from one of the consortia, within, I think it was, a few days
of receiving that I had a meeting with the trade unions, the BA
trade unions, to go through a number of issues; they were aware
that this consortium had put something in, and I said, so long
as they treated it commercially in confidence, I would give them
a complete set of all the information that we had, and I valued
their input in terms of what ideas were in there and what the
implications were. And I believe that is the right way to do it.
We have to recognise that people need to understand what it is
we are trying to do, and I believe we should be visible in explaining
it; if we cannot explain it, if we cannot persuade people that
it is beneficial, I personally have always questioned is it the
right thing to do. I am not saying you will get total agreement,
because I do not think you can get everybody to agree to everything,
but if you cannot explain it and demonstrate that it meets a range
of criteria, I think there is a problem. I also recognise that
we have, and I said this just before, 80,000 people dealing with
a million people every week, so that interface is critical to
us, and I place great store in terms of the implications on staff
and what it means to them.
Chairman: Thank you.
Can we move to fraud and Benefit Payment Cards and related matters.
Mr Wicks
201. On fraud, what evidence can you give
us as to whether the war against fraud is being stepped up?
(Mr Mathison) There is a review currently under
way, which the Minister referred to in his evidence, around looking
at the whole fraud strategy; so it is within that context and
we have not yet finalised that review. I am not sure what the
date is. That is getting input from a wide range of sources. What
is clear is that we need to balance the resource between detection
and deterrence into prevention, in the first place, and there
is a lot of work going on around that area, of balancing the resource
between preventing fraud occurring in the first place.
202. Yes, I understand, I know about the
review but there has been concern expressed, not least by this
Committee, under its eminent past Chairman, about fraud, and the
Committee was really rather urging your Agency to get its act
together on this, so this goes back some years now. And I wondered
if you had any evidence to convince us that we are beginning to
win this war, albeit that we are still awaiting a review, as well,
it is perfectly proper?
(Mr Mathison) We do not have yet firm evidence
that we are winning the war—your expression—because
it is gathering the information subsequently from benefit reviews,
and there is work going on around benefit reviews and the outcomes
of that and all that area. I do not believe it is ever going to
be anything that we, it is not something we would eliminate.
203. Sorry; there must be some data on how
much fraud is detected, year by year, there must be some data
on whether you are stepping up the numbers of home visits, and
things of that kind; that is what I am after? You have known about
this issue for some years now?
(Mr Mathison) We have increased the resource on
fraud, both on detection and on prevention, through visiting.
We have done a lot of work around evidence, and, Steve, have you
got the detail?
204. I do not mind who gives it to me, I
just want it?
(Mr Heminsley) We do have information on the increase
in fraud.
205. Can we have some information?
(Mr Heminsley) Yes, certainly. We will achieve,
for the last year, the year just finished, around £2 billion
worth of benefits savings, fraud prevented. The target for the
coming year is to save a further £2.3 billion.
206. A target?
(Mr Heminsley) Yes.
207. What are you going to achieve this
coming year?
(Mr Heminsley) In other words, what we achieve
this year and a little more, for an investment of, depending upon
some issues around end-year flexibility, around £260 million
to £270 million input for that sort of return. Now the sorts
of things that we are doing are, we are actively shifting the
emphasis towards the front end of the business, it was referred
to by Peter earlier on, so we are having regard to things like
the Evidence project, we are doing things around the Active Modern
Service prototypes, for example, in Lewisham and in the Chilterns,
where we are seeking to get the right sorts of questions asked
by the right team of people, again picking up on a point from
earlier on, at the right time in the claim, following it up then
with the sort of targeted review visit that we tend to do, and
we are getting results from that. So I would actually draw, not
just because it is around, a very real connection between that
switch to front-end resource and the Active Modern Service efforts
that are going on, in addition to the formal prototypes that are
taking place, then much of the security programmes, actually spent
with Tony's and John Lutton's people around the country, for initiatives.
Again, there was an older initiative before the Chilterns started
on their current prototype, which was all around their ideas around
benefit gateways and the sort of good, hard, commonsense things
that we know about within the business that should be done. So,
local initiatives, local ideas, like that, are also being resourced.
At the other end of the scale are things like the General Matching
Service, which, having been invested in, using additional money
provided by the Treasury, as well as some of our own resource,
we build systems like this in order that we can do the sort of
data-matching and pick out the sorts of trends, that to the human
eye, with sort of a billion transactions a year, cannot be done.
So there is an awful lot going on and a lot of money being saved.
208. I understand that. On home visits,
this Committee, in an earlier life, was very keen on reversing
the decline in home visits, which some thought was associated
with the rise of crime, of fraud; are there now far more home
visits?
(Mr Heminsley) There are far more. I think Tony
might be able to give you better detail; we have spent a lot of
money in that area.
(Mr Mathison) Unfortunately, and I apologise,
I do not have the detailed information with me, but I will provide
a note to the Committee of, over the last three years, the number
of home visits that have been carried out, both new claims and
targeted reviews, and detail, with some analysis of it, of the
security savings.[8]
From memory, from the PAC appearance, I think 1996, 1995, was
around £1.5 billion, £1.6 billion, I think, on fraud.
The target was £2.1 billion for this year, and although it
is not finalised yet, because of this audit going on here, it
looks as though we are likely to be slightly short of that, around
£2 billion, so we will have missed it by——
209. I know that you have not got figures
with you, but is it your impression that the number of home visits
has increased significantly?
(Mr Mathison) It has increased significantly;
from memory, it has more than doubled, it has increased very substantially.
210. What happens now, typically? Someone
applies for Jobseeker's Allowance, or Income Support, they are
a lone mother, or whatever, someone applies, they provide you
with information, they are living with someone, they are not living
with someone, whatever it might be, they have not got a job; what
typical checks would be made?
(Mr Mathison) Tony can come in, to the detail,
but we have information and criteria set down around circumstances
and risk and we will carry out visits based upon that. The local
offices, and we have GMS, General Matching Service, which also
runs data from all the different systems and throws out where
there is information in one system and different information in
another which looks suspicious, the local offices have a programme
of work then, a large part provided by GMS, another part around
the criteria under which they will visit, but they also have,
and I cannot remember the proportion, a percentage of, if you
like, allocated, budgeted visits, which is at their discretion,
around local knowledge.
211. Roughly, what is it, 5 per cent, 50
per cent?
(Mr Mathison) Of what; visits?
212. Yes?
(Mr Edge) I would say, it is higher than that.
On new claims, we visit most new claims. I will give you a note
on the exact figures.[9]
We have done an awful lot more at the front end, as you suggested;
a few years ago we just had fraud at the back end and no visiting
at the front end, that was a mistake. We now visit any case where
we have a doubt about the case, where we have perhaps never seen
the customer before, we do not know the history at all, they maybe
live in a multi-occupied place, maybe customers from that kind
of house. So we will, in fact, look at the risk associated with
a claim and then give an appropriate response to that. Other ones
could be just by one visit, maybe at the beginning, and then we
will review them by post later on; others, we will review as well
by visit, if we are concerned about them.
213. Some data on that would be very helpful,
thank you?
(Mr Edge) I will give you some data on that.
214. Can I ask about Child Benefit fraud.
I think the facts are, but I may have got them slightly wrong,
I do not know, that this Committee inquired about this in October
1996 and reported in early 1997. I think we were told the benefit
review was imminent in early 1997, it is now expected in July
1998, is that right?
(Mr Mathison) I am not sure whether we have an
exact date of when it was expected, I know that Ministers have
asked us to examine ways in which both the benefit review is conducted
and how the findings are presented, and that work is currently
going on.
215. This Committee has never had a response
to its inquiry, I do not think, has it?
(Mr Mathison) I do not know, I would have to check.
(Mr Heminsley) I understood there was a meeting
of this Committee loosely pencilled in for the beginning of June
around that issue.
Chairman
216. That is because we have not had the
response to the original report?
(Mr Heminsley) At the moment, what we are doing
is responding to what is necessary to present the findings, do
some more analysis round those findings to present them——
Mr Wicks
217. What is the problem; do you not know
whether there is any Child Benefit fraud?
(Mr Mathison) We know there is some Child Benefit
fraud, through matching we have found some evidence of that. I
think it is the perennial problem we have around classification,
because we know that in using the term "fraud" it is
emotive in more ways than one. And then, if we have a figure that
we say is fraud, absolute confirmed fraud, where we would have
sufficient evidence to be able to carry out a prosecution, is
fairly limited; it is quite difficult on some of the benefits
to get absolute evidence which would allow a prosecution.
218. Do you not think, if a Select Committee
of this House of Commons—I am not being precious about it
because I was not on it at the time—reports on Child Benefit
fraud in October 1996, or thereabouts, it should have had a response
long ago?
(Mr Mathison) I think there were particular circumstances
why Ministers have asked us to look at some aspects of how the
information was gathered, and, particularly, more importantly,
about how that information is presented and then interpreted,
and there is currently work going on, on that.
219. Can I ask you one other thing; others
may want to ask about the important issue of the Benefit Payment
Card, because I do not want to hog the discussion on this. But
one of the concerns—I discussed this with your office this
week—is that often MPs get allegations made to them of fraud
in the social security system, I had some dramatic evidence presented
to me on the Kilroy programme of young men boasting in public
that they were defrauding the system, with thousands, hopefully
millions, of people watching, as it were, the MP then writes to
the Benefits Agency, gets a standard reply, saying, "Of course,
this is being followed up" and hears no more. Now I understand
that there are some legal problems here, issues of confidentiality,
and so on, but would you agree that if an MP, or a citizen, or
anyone else, never really gets any feedback it is good news for
the fraudster, often, I suspect, and gives no confidence to the
MP that things are actually being done?
(Mr Mathison) It is a very difficult area. I recognise
that it will not give confidence to the MP that we cannot give
information specifically about an individual; we have to recognise
the Data Protection Act, we have to recognise the legislation
under which information is given us on the social security. I
think there are other issues around disclosing that information,
if there were not the legal issues, around an individual who may
provide information and what exposure that may give them, and
I think there is a duty of care on that. I cannot remember when,
there was an incident, it must be within the last two years because
I was here, where there was an accident around disclosing who
had given us information within a community, in a family circumstance,
and that resulted in both long-term problems around that neighbourhood,
but, more importantly, the person was gravely assaulted. What
I am told is that if people were aware that, in disclosing information,
the person who was alleged to be defrauding us, that was followed
through with public information, it would significantly reduce
the numbers of people who may be prepared anonymously to tell
us about those situations.
8 See Ev pp. 71-72. Back
9
See Ev pp. 71-72. Back
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