Examination of witnesses
(Questions 260 - 279)
WEDNESDAY 29 JULY 1998
DAME ANN
BOWTELL, DCB
and MR STUART
LORD
260. Mrs Brown in Thornton Heath—a
fictitious name, but I am thinking of someone—on her estate
knows about fraud. She knows who is up to it on the estate. Lots
of my constituents know about fraud.
(Mr Lord) There is a lot of anecdote.
261. No; it is not anecdote. Why did not
the leadership of your department know about this?
(Mr Lord) It is a question of scale, which is
the distinction I am seeking to make between the particular examples
and the fact that we do have a broad order of magnitude. You need
a fix on the scale of the issue if you are going to justify investing
the sorts of resources that the department has put into fraud.
The two have moved forward together. It has moved up the political
agenda. We have a quantification that we did not have before which
makes it possible to put resources in, and it has been moving
forward systematically as the record of savings shows.
262. Do you think that the division of the
department into different agencies has created feifdoms which
are not very good at coordinating on issues like fraud?
(Dame Ann Bowtell) When the agencies were first
set up, I think there was a certain amount of pulling apart. Part
of that was probably needed because you have to establish them
as these separate entities that were accountable separately. I
do not think that had a huge effect on the fraud because most
of the fraud is within the Benefits Agency which remained one
entity. Over the last few years, I think we have seen a rebuilding
of the links between agencies to make quite sure that we are not
operating on completely separate endeavours. All the agencies
in this department at any rate have very close connections with
each other and therefore I see it as very important that they
should all be pointing in the same direction and should all be
operating to the same aims and objectives. Hence the importance
of having a very clear steer from ministers about where they are
heading.
263. Can I ask about the relationship between
policies set by Parliament or government and their being put into
practice? Much of the social security system works smoothly and
efficiently for the benefit of our constituents: pensions, child
benefit and so on, but in recent years there have been one or
two dramatic examples of problems. We have mentioned BIP and DLA,
but let me mention the Child Support Agency. Parliament must take
its share of blame on this but here was an objective set that
absent parents should fund their own children wherever possible.
We are told that now, some years later, only one in six children
on benefit receive child maintenance. Clearly, the policy has
failed. It is the job of civil servants to put these things into
motion. You chose to have a lot of regional centres where ordinary
people could not visit. The staffing of some of the centres came
from outside the department. How do you explain that?
(Dame Ann Bowtell) A lot of the problems in child
support have stemmed from the kind of scheme it is, but that is
not the whole answer. There were indeed I think a lot of things
that went wrong in the early days of setting it up. It was set
up as an independent agency, so those decisions would have been
decisions made by those managing the agency. One of the things
was that there were too many new things all at the same time.
There was a new scheme; there was a new computer system. As you
said, there were new staff. There were a lot of mistakes made
in the early days, but it was also true that they were trying
to run a scheme which I do not think anybody had any idea would
produce the complexities that it did. We learned a lot from the
CSA experience. It really was the thing that started us off on
a much more serious approach on project management and, in particular,
making quite sure that we set up a project team which would continue
through to take the policy implementation and the beginning of
the actual implementation right through.
Mr Leigh
264. I want to ask a question about fraud
but to continue with that last line of questioning I find this
incredible. I am glad you have said that you learned some lessons
but we have all been put through hell, as politicians, for these
poor people with their problems although it compares not at all
with the problems that they have been put through. I think we
do need reassurance from you, especially as we are looking at,
for instance, pension sharing on divorce now, that we have learned
the lessons. For instance, we are going to proceed very slowly
with pilot schemes and not do things with a big bang. I am alarmed
also at your answer that this was put to an agency. The implication
of that answer is, "We were not responsible. Ministers were
not in charge." I have a feeling that ministers were not
fully informed of what was going on and had no conception of the
whirlwind that was going to break around their heads. I just hope
that you can reassure us this will never happen again.
(Dame Ann Bowtell) No one had any conception about
that whirlwind. I am quite sure that we would have run the actual
setting up of it differently if we were to do it now. I can reassure
you that the arrangements we now have in place, I believe, will
deliver projects much better. JSA, for example, which was a hugely
complex project—it was the most difficult thing we have
ever done—was delivered properly and on time because we
had a much more secure project arrangement, much more involvement
of senior people. JSA was run through with a steering committee
with both myself and Michael Bichard on it, so we had much greater
senior attention to it and we had a very senior project manager
running the whole thing who stood between the two agencies. We
have moved on a long way from where we were on the CSA.
265. On fraud, Frank Field is always very
proud, perhaps rightly, of the work of his committee, this Committee
in the last Parliament, but I always found this quite an amazing
concept he shares with us: that before he took action as chairman
of this Committee nobody was talking about fraud. I find that
unbelievable but from your answer today when you said, "This
crept up on us", maybe he was right. Was he right? After
all, when we were canvassing the streets in the seventies and
eighties, as Malcolm Wicks has said, people were talking about
fraud quite freely.
(Dame Ann Bowtell) Clearly, there has always been
fraud and we have always had a fraud force. There has been a substantial
force of fraud investigators in the department, so that work of
investigating fraud has always gone on. What has grown is the
perception that that is not enough; that you have not got just
to investigate fraud; that there are things that you can do in
terms of the design of systems and the way you introduce systems
which will help to prevent fraud. It is not that nobody took any
notice of it. There were always fraud investigators who were always
pursuing fraud.
266. Was the work of this Committee significant?
(Dame Ann Bowtell) Yes, I am sure it was.
Mr Goggins
267. I would like to ask, on a slightly
different note, about accuracy targets and the Benefits Agency.
When Peter Mathison came to this Committee, he and I had rather
an interesting discussion about the difference between goals and
targets which I have reflected upon quite a lot since. Seemingly,
targets are things that you might hit; goals are things that you
probably will never hit, or so it seemed to me. I think in the
last year and next year he has an accuracy target for income support
of 87 per cent in his published documents. I notice that, in your
department's document, it also has an accuracy target of 87 per
cent of cases on income support. What he actually told us was:
"When I first joined I could not find anybody who believed
87 per cent was achievable." He shared with this Committee
the fact that next year they have internally a target of 84 per
cent. Do you think this is acceptable? These are public documents,
the agency responsible publishing figures which the chief executive
openly admits are not achievable.
(Dame Ann Bowtell) When Peter arrived at the department—he
and I came at about the same time—it was apparent that the
targets that the agency had, both of us felt, were too strongly
biased on the speed of clearance of claims and there was not enough
concentration on getting things right. What we were both trying
to do and have been trying to do over the last few years was to
turn the agency round to being more focused on getting things
rights and less focused on doing them fast at the expense of getting
things right. We were very keen that we should promote the accuracy
targets. When we looked at the accuracy target of 87 per cent,
both of us were reluctant to move it down because it did not seem
a good signal, when you are trying to improve the accuracy and
put the emphasis on accuracy, to put the thing right down. We
agreed then that it would be wrong to reduce the 87 per cent.
We ought to be aiming for 87 per cent. 87 per cent ought to be
quite possible but we always recognised that we were not going
to get there in one year. What you call it seems to me to be less
important. That is why we were trying to do it like that. We did
not want to send the wrong signal.
268. Presumably the goal should be 100 per
cent, if we are going to draw a distinction between goals and
targets?
(Dame Ann Bowtell) Realistically, in something
involving millions of assessments and payments, you are not going
to get to 100 per cent. You might get to 95, but it was 87 because
87 was where it was at the time. I think it had been in the nineties
and the NAO definitions of accuracy were changed. They began to
measure accuracy in different ways and it meant that a ninety
something target turned into 87 to make it mean the same thing.
269. I can only repeat what I said previously
which is that I find it intriguing, to say the least, that we
keep seeing this figure of 87 per cent for last year and for next
year and in your document and the Benefit Agency document it is
total fiction.
(Dame Ann Bowtell) If we put that figure down,
that would not be a good signal to staff. Ministers clearly felt
that as well because these targets were blessed by ministers.
Chairman
270. I would like to move on to project
managing, tax and benefit interaction but before that I wonder
if I an ask Mr Lord two quick questions about two new things that
are facing the department? Firstly, the three year spend. How
does that affect the work that the department will do, if at all?
(Mr Lord) One set of spending figures is the departmental
expenditure limit which applies in particular to our running costs.
Our programme spend is annually managed expenditure and is in
a different category and will continue to be examined annually
in a way not very dissimilar to the way it has been examined in
the past. On the departmental expenditure limit, which covers
essentially our own running costs and housing benefit administration,
there is now a much firmer government expectation that such a
run of figures will survive for a full three year period. This
is in contrast to the past when we have always agreed a three
year set of figures, but we have had quite a strong expectation
in all quarters that there would be a further conversation in
the following PES round about whether or not adjustment is needed.
It is largely about shifting the mind set, the expectations and
the balance between firmness for planning on the one hand and
the readiness to reopen and re-examine in the light of changed
circumstances on the other.
271. It still leaves the opportunity for
spend to save projects?
(Mr Lord) I would expect it to do so. Spend to
save has always had the characteristic that it has straddled programme
and running costs with the benefits on the programme side and
the costs on the running cost side. Governments traditionally
have wanted to quite tightly control running costs, so it has
never been without difficulties, but I would expect those difficulties
not to be exacerbated by this change.
272. How will resource accounting change
the way that you work in the department and, in particular, how
will it change how you manage the outstanding debt, some of it,
certainly in terms of the CSA, largely notional?
(Mr Lord) I think you are right to identify debt
as a key issue for us in relation to resource accounting. If you
were a chairman of a different select committee, there would be
a different set of key issues coming out of resource accounting
and budgeting. Debt is important for us because it is an asset
that will be recognised as such under the new arrangements. We
will be subject to capital charges on outstanding debts and it
shows one of the valuable features of the new approach which is
that, as a key part of the system, there will be a strong driver.
273. You enjoy this rigour.
(Mr Lord) We enjoy it enormously! Of course, in
principle there is no reason why we should not be pursuing debt
with a degree of vigour that will more naturally be forced upon
us now. It does show the benefits and it will be important in
relation to us at the centre and I think it will have an impact
throughout much of the organisation. The example that is in my
mind is less the child support area where the debts are normally
to the parent rather than to the taxpayer than in the Benefits
Agency, where there are some substantial sums of unrecovered overpayments.
Mr Wicks
274. Were you saying about the CSA that
mainly the debts are to parents rather than to the taxpayer?
(Mr Lord) I believe that is the case. I can let
you have a note if that is wrong. There will be both components.
Chairman
275. There are bound to be both components,
but I had a public sector worker in Duns the other day who came
into my surgery with an assessment for £26,650. This is because
they were sending letters to an address he had not lived at for
three years. You cannot tell me that that is a debt that is anything
other than due to the agency, although as an interim assessment
it is an entirely notional or indeed ludicrous and fictional figure
as far as both he and I were concerned.
(Mr Lord) I am unsure. I knew I should not have
mentioned the CSA.
(Dame Ann Bowtell) If you want to know about it,
we had better let you have a note.[1]
Mr Wicks: With 70
per cent of lone parents on income support, a certain percentage
of that will be a debt to the public, I suspect, and I think we
should all know about it.
Mr Flight
276. Before leaving aims and objectives,
could I raise a point? I think both the last and present government
have expressed an objective that the two parent family is to be
encouraged for the raising of children. Do you think this should
be included in some aspect under aims and objectives and, in relation
to that, in reviewing the effect of changes in the operation of
social security, do you focus in any way on the potential detrimental
effects of measures, on the undermining of the two parent unit?
It has been certainly a concern of mine that, albeit well intentioned,
quite a lot of measures have ended up actually discouraging the
value of the two parent unit.
(Dame Ann Bowtell) It is always difficult, in
developing policy, to hold the balance between the desire to have
that kind of effect and the need to meet the need that there is.
The ultimate way of making sure people stay together would be
to make sure you did not pay people if they split up, but no government
has been prepared to do that. In a way, you are always holding
a balance. You have to recognise in social security the situation
that you have. If you have people in lone parent families, then
you have to support them, but we have become more conscious over
the years, increasingly, of the behavioural effects of social
security changes. That has become something which has grown in
perception. The way in which you manage social security can affect
people's behaviour. It is obvious but I think we take a lot more
notice of it now than we used to.
277. Do you provide any feedback to ministers
of whatever government in terms of your assessment of the impact?
(Dame Ann Bowtell) We would certainly be evaluating
changes in policy. It might be quite difficult to find and detect
the impact of that kind of thing on the ground unless you were
to set something up specifically to do it, but it is certainly
a factor we would take into account in advising ministers. It
is not something we would ignore in giving policy advice.
Chairman: We have
been talking about some of the concerns about project management.
We have some worries about the integration of tax and benefit.
Mr Goggins
278. Clearly, next year is going to see
some major changes with Family Credit and Disability Living Allowance
becoming Tax Credits, administered by the Inland Revenue. I wonder
if you could tell us what preparations the department is making
for that change?
(Dame Ann Bowtell) We are working very closely
with the Inland Revenue over this obviously. The Inland Revenue
are leading on it—and I think you have their officials coming
to give evidence later on—because they are having to put
the Working Family Tax Credit in, but we are working jointly with
them on the project to deliver that. Within DSS, we have set up
a project of our own to look at all the implications specifically
for DSS and DSS benefits of moving the Family Credit stuff out
of the system. What will happen is that the staff in those units
will be transferred to the Revenue. The Revenue will take over
operating units, as it were.
279. Is that all the existing staff?
(Dame Ann Bowtell) Yes, that is correct. All the
existing staff in Blackpool and Preston who are working on Family
Credit and the Disability Working Allowance. The Revenue will
take over a going concern, as it were. Their job will be to put
changes into the operation that are necessary to turn Family Credit
into the Working Family Tax Credit and the same with the Disability
Allowance.
1 Note by Witness: Legally CSA debt is owed
to, and owned by, Parents with Care. The Agency have powers to
repay the money to the Secretary of State, rather than the parents
with care, once the debt has been collected. Because of this the
debt will not attract a capital charge under the new Resource
Accounting regime. Back
|
