Examination of Witnesses (Questions 60-79)
MS RACHEL LOMAX, MR JOHN CODLING AND MS ALEXIS CLEVELAND
MONDAY 4 FEBRUARY 2002
60. What about credit reference agencies?
(Ms Cleveland) They are used sometimes in fraud investigations and they come within the terms of the bodies with which we can exchange information under the Fraud Act.
61. How do you check identities of people?
(Ms Cleveland) We look at birth certificates, particularly for people coming from abroad we look at immigration documents, passports, such like.
62. What about live-in boyfriends, that kind of stuff? How do you check that without invading people's privacy?
(Ms Cleveland) That is probably the most difficult area to do. If there is a lone parent claim, by and large we visit the lone parent in their home and go through questionnaires with them then. You are absolutely right, it is very difficult to do that sort of thing without being very intrusive, but we do it through home visits.
63. You gave me a figure of £564 million of deliberate fraud out of £888 million which comes to 63 per cent. If you multiply that figure by 6.7 per cent you are coming to about 150,000 cases, if there are four million claimants claiming this £13 billion of benefit. You are talking about 150,000 claimants who are deliberately engaged in fraud. How many of those are you prosecuting every year?
(Ms Lomax) I am not sure you can do the sum you have just described. What we measure here are total amounts of fraud.
64. You tell me then what £564 million represents in terms of claimants. I hope it is more than ten claimants because it is a lot of fraud per claimant.
(Ms Lomax) I can tell you how many interventions. We prosecute about 11,000. We have 450,000 investigations of fraud every year, of which about 182,000 lead to a change in the benefit rate.
65. That ties in exactly to the figure I calculated when I said 150,000 claimants; slightly more rather than less than I estimated.
(Ms Lomax) It so happens, but it does not have to be, because it is not a percentage of cases.
66. But it is bound to tally roughly.
(Ms Lomax) Do you want me to go on and tell you the rest of the numbers?
67. Yes, please.
(Ms Lomax) Twenty-four thousand sanctions.
68. Let me just clarify this. One hundred and eighty-two thousand people were found to have deliberately committed fraud in claiming benefits. Of those 24,000
(Ms Lomax) Twenty-four thousand sanctions; not necessarily deliberate fraud.
69. I thought the £564 million was deliberate fraud.
(Ms Lomax) Four hundred and fifty thousand investigations. I do not have a breakdown of those we determined were fraud and those we determined were not fraud. Basically the investigation is to determine whether it is fraud or not. Sometimes it is fairly straightforward just to change the benefit if it was clearly wrong; whether there was evidence to stand up in court or to take a prosecution is a different matter, but the benefit rate was changed. In 24,000 cases people felt there was enough evidence to apply a sanction, an administrative penalty of some sort and in about 10,000 cases we took someone to court.
70. How many cases of deliberate fraud were there in your Department in 2000-01? That is what I want to know. How many cases of deliberate fraud?
(Ms Lomax) We got 9,000 convictions for fraud.
71. I did not ask for convictions. I did not ask you for the number of prosecutions, I asked you for the number of cases of deliberate fraud in your Department in the year 2000-01. It is not a very difficult question. Or is it?
(Ms Lomax) It is a difficult question. Nine thousand convictions
72. You have £564 million of fraud which you have just identified and you cannot tell me how many people perpetrated that £564 million of fraud.
(Ms Lomax) I can tell you how many people the courts convicted.
73. No, you are telling me the number of people your Department prosecuted. I want to know how many people were deliberately committing fraud in your Department which made up the £564 million of taxpayers' money you have lost. Not how many people you prosecuted, how many people engaged in deliberate fraud to obtain that £564 million.
(Ms Lomax) We can tell you how many cases of fraud and strongly suspected cases underlie the £564 million.
74. You have changed your answer now. It is no longer fraud, it is fraud and strongly suspected.
(Ms Lomax) Not every case which underlies the £564 million led to court action.
75. I know that. That is not what I was asking. I was asking how many cases of fraud there were, not how many cases you took to court.
(Ms Lomax) How many cases underlie the estimated £564 million?
76. Yes; correct.
(Ms Lomax) I do not have that figure with me but I am sure we can find it for you.
77. Do you have a rough idea of that figure? Is it not even conceivable that it could be roughly what I said it might be, which was 6.7 per cent times 63 per cent times four million?
(Ms Lomax) As an order of magnitude it may be, I do not know.
78. But it is a fair estimate, given that most claims are roughly the same amount. Income Support is not a hugely disparate amount per claimant on average. So we are looking at 150,000 people.
(Ms Lomax) The amounts of fraud involved vary wildly from very small amounts to very large amounts per case. If you look at the notes to the accounts, which I am sure you have done, fraud of £100,000
79. I am just trying to help you come up with a figure which you ought to have. You ought to have this figure at the top of your head. I am trying to help you come up with a broad figure. Could 150,000 be the broad figure for the number of?
(Ms Lomax) I do not know. I do not have that figure with me. These figures are not percentages of cases.