Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 60-79)



  60. Why are we less good at reporting now than we were a few years ago? That seems to be a worry.
  (Mr Tebbit) Because we are now much more aware as a Department about the need to look for fraud, to raise awareness, to report suspicions, not to be complacent, to change the culture really. There is a culture in organisations of saying—

  61. That would lead to over reporting, not under reporting.
  (Mr Tebbit) Well, I do not know that is the case. The Defence Fraud Analysis Unit will look at whatever is reported to them. I do not want to get into a situation of scaremongering and that sort of thing in the Department but I think we did need to raise awareness and to make people more concerned about this.

  62. The more you raise awareness the more cases you would think might come to light?
  (Mr Tebbit) It is possible.

  63. The numbers are going down?
  (Mr Tebbit) At the moment they are.

  64. I do not understand the explanation.
  (Mr Tebbit) The provisional figure for 2000-01 is 121 cases presumably compared with 91 cases in 1999-2000.

  65. So it is going back up. That last year may well be a matter of awareness.
  (Mr Tebbit) I cannot say.

  66. You have made people more aware and they have finally gone up but in the previous three years they were actually coming down.
  (Mr Tebbit) Yes.

  67. Are you saying people are getting less and less aware?
  (Mr Tebbit) I am not saying that at all. All I am saying is there is not necessarily a direct causal connection between the annual changes in numbers of cases and our success in increasing our measures against fraud or, as I like to put it, reducing the areas of risk.

  68. There has to be some reason. Either the cases are genuinely coming down or people are becoming less aware and are reporting less. If you are saying you do not know which it is then that is the same sort of answer. I would be worried if you did not know which it was but it has to be one of those two.
  (Mr Tebbit) I believe people are now becoming much more aware of the need to report suspicions of any kind.

  69. That can only be true in the very last year when the number of the cases has gone up because before that the number of cases was coming down and that cannot be due to extra awareness?
  (Mr Tebbit) It could be. We are not in a position to say for certain one way or the other. I am not quite sure whether we have got a disagreement between us.

  70. I cannot understand how extra awareness from your staff of the potential for fraud and the fact they ought to report it could of its own right have led to a decrease in the number of cases reported.
  (Mr Tebbit) I am trying to act responsibly here. 1998-99 129 cases, 1999-2000 91 cases, 2000-01 120 cases, I do not think that shows really anything very significant in relation to your comment either way. I happen to believe quite separately that awareness has gone up because of all the measures we have taken in the Department over the last two or three years.

  71. I suppose you could have some sort of argument in terms of the last three years but certainly dropping from 213 cases before seems fairly significant, it is almost half. It is an odd thing to happen when you have greater awareness.
  (Mr Tebbit) We are spending less money on property management as a whole, that is also true.

  72. Can I pass on. One thing you said earlier was the lack of prosecutions was partly due to the difficulty in getting evidence. Why is it so difficult to get evidence in this particular area?
  (Mr Tebbit) Because it usually requires crawling over a mass of paper, statistics, figures, data, often it is very hard to get all of the information you need in order to force a successful prosecution. It is quite easy for people to argue that they were simply slips in preparing estimates or misunderstandings. It is very difficult to pin it down as criminal intent. This is not an MoD specific issue. I think you will find in general this is a difficult area.

  73. You said it was specific to property.
  (Mr Tebbit) Yes, property management fraud.

  74. I can understand the potential difficulty in terms of people saying it is just slips or badly estimated. What does concern me is that you find it difficult to get hold of paperwork. Why do you find it difficult to get hold of paperwork, do you not have access to it or do people hide it or burn it or what happens?
  (Mr Tebbit) We have had less access to it in the past than we will under our new arrangements, that is certainly true. As we are moving to a requirement for open book accounting we will automatically have access to contractors' documentation and subcontractors' documentation but we have not had that in the past.

  75. Given you have good access now, or better access now, can we expect the number of fraud prosecutions to go up?
  (Mr Tebbit) I would like to think that we will see the number of fraud prosecutions go up and having access to information will help. Although I might say with open book accounting the risk that one would be caught out will be much greater and people might just do what we want them to do and that is behave properly.

  76. So that the proportion of cases that need investigating will go up although the absolute number may not?
  (Mr Tebbit) Well, it might not or it might just mean that people start behaving properly.

  77. We shall be watching these figures with interest, Mr Tebbit.
  (Mr Tebbit) Can I just say in this area, one area that we have not touched on is with good IT it makes it much better, much easier to look at general movements in who is winning contracts, who is bidding for contracts, which contractor appears to be linked with which particular property manager or consultant and, therefore, to develop patterns, data mining, as it were, these techniques, to try to look at risk reduction measures that way, to be more proactive not simply investigating an allegation but even before any allegations happen to see whether there are any unusual patterns and relationships between contractors and parts of the Department or contractors and subcontractors.

  78. It sounds like good news. It sounds like another reason why we can confidently, in the PAC, expect the number of fraud prosecutions to go up in the future. We shall be watching with interest.
  (Mr Tebbit) Or the level of compliance to increase. Data mining will be a technique and is a technique we are beginning to use as our IT gets better.

  79. Given it is difficult to prosecute and to get hold of the evidence, what emphasis are you putting on fraud prevention rather than fraud detection?
  (Mr Tebbit) As I say, that is a key emphasis. As I mentioned, we have trained virtually all of our staff now in fraud awareness, 1,450.

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