Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 200-219)



  200. It is obvious that if somebody is more or less on the breadline there is not much point fining them, although in some cases presumably these are people who are not on the breadline where it is real fraud.
  (Ms Lomax) Where people are sent to prison for four years or five years it really does involve quite large amounts of money, 100,000 or more.

  201. How often do you get people who have been convicted once, who then commit a further fraud?
  (Ms Lomax) I do not know the answer to that off the top of my head I am afraid.

  202. Do you have figures?
  (Ms Lomax) I am sure we could find out whether there are recidivists in this collection of people.[7]

  203. It might be useful.
  (Ms Lomax) Anecdotally I have certainly seen the odd case in the paper of people who have been convicted of benefit related offences more than once.

  204. How effective has the recent advertising campaign been at bringing in more information?
  (Ms Lomax) It is a long-term campaign of the drink-driving variety and we do not have the results in from the last wave of advertising. The research suggests that about 85-86 per cent of people will agree that fraud is unacceptable and should be punished. How much impact the advertising campaigns have is too early to say. It only needs to change attitudes a small amount to save a lot of money. In terms of calls to the helpline, they went up something like 133 per cent. It certainly got a few people's attention.

  205. The whole Committee in a sense has been searching for ways to help to bring down the level of fraud and there are huge numbers of different ways. You can either punish people more viciously, or you can take more of them through the courts, or you can do more with society to try to influence society so they give you more information; you can try to give people a better education to start with, heaven knows. There are all sorts of ways you can bring down fraud. What in your view is the thing we ought to be concentrating on?
  (Ms Lomax) The thing we have really focused on is administering the whole system from end to end much more tightly. Right from the beginning when we are checking up on someone's identity, and depending on the nature of the benefit, we have to rely on people to tell us about their circumstances and change in circumstances, particularly for working age people. We need to check up on them and we need to keep checking up on them. If you do that you get results and that is essentially what we have been doing over the last couple of years and why we have managed to get fraud and error down so significantly. Waiting for the fraud to be committed and then punishing it savagely may have some impact on attitudes, but we would far rather not put people in the position where they have the opportunity to commit fraud, particularly given the opportunistic nature of so much of it. We need to administer our system much more tightly.

  206. I am sure you are right, if I may say so, to make the point earlier that it is really important to get people to realise they will be caught.
  (Ms Lomax) Yes.

  207. That is an important aspect of it. That does bring me back to a difficulty which Ms Cleveland mentioned, which we are all aware of. Quite a lot of finding out when somebody is a fraud does involve some fairly personal investigation. You were saying this was one of the difficult things and your main way of doing that is by home visits. It still strikes me that you can do a home visit and you may not be always be let into the home—I do not know quite what powers you have—to find out what is going on there, but that can be quite difficult and can be intrusive and clearly it is something for which you are sometimes given the stick as an organisation, that you are being too intrusive in some way. Is there any other way that you do not have perhaps the power at present, but would like to have the power, which can enable you to find out this personal information?
  (Ms Cleveland) I am trying to think of things other than the powers we went for in the Fraud Act.
  (Ms Lomax) We have just had our shopping list enacted in the Fraud Act 2001. One of the sections in that Act makes it absolutely explicit that failure to report change in circumstances is an offence. That will be a deterrent against the opportunistic fraud which we have been talking about. It is far better that people do not get themselves in the position of committing that fraud.

  208. Have you had any thought yet about civil partnerships and what effect the Bill which has been going through the House of Lords just recently might have?
  (Ms Lomax) I am sorry, I am not aware of it.

  209. Civil partnerships between people who are not a man and a wife and have not been married in a church or wherever. Civil partnerships can be created either between two people of different sex or indeed between two people of the same sex, which gives you certain rights as though you were married. Would the introduction of that sort of thing help you at all?
  (Ms Lomax) I am not quite sure what the proposition is. We really look at households whether or not people are married. It is a question of whether people are living together. Common law relationships are what the benefit system is interested in.

  210. If there were a system of civil partnerships, you might find a rather larger number of partners formalised what they were doing in a way which would then make it rather difficult for them to pretend they were not.
  (Ms Lomax) It might be useful extra evidence.
  (Ms Cleveland) We have married couples who live apart, come back together, live apart again. I suspect it would not give us any advantage over the current position. The other issue which clearly impacts on this is to do with the sensitivity of the Human Rights legislation and privacy. We are having to review the way in which we undertake these reviews and we have reviewed the way we undertake them in light of that legislation as well.

  211. You were saying earlier that there is a huge complexity in this whole system and there certainly is. We are all very aware of that. How many of the clients you deal with actually need all that complexity. My guess is that you may have 95 per cent of your clients really quite simple cases and the last five per cent are what has added on the huge complexity to try to make it fair to everybody in every sort of circumstance. Is that true?
  (Ms Lomax) It may be. I must say it is a line of argument I am very interested in myself. How much of this complexity is just round the edges and how much of it is core. As we start to focus more on different client groups and distinguish between pensioners and people of working age, it will begin to be easier to think in a more focused way about how much of this complexity we really need for different client groups. The trouble about Income Support is that it is a universal safety net for absolutely everybody That is conceptually what it is designed to be. As we get into things like pension credits, it will be easier to have something which is more tailored to the pensioner client group, so we shall not be asking pensioners whether they are pregnant and things like that.

  212. One of the things I was extremely pleased to hear you say, as I am sure you know from our previous encounters in PAC, was that you are now looking at breaking down your big computer systems into chunks and trying to deal with them bit by bit. What I was wondering was whether or not you could go a stage further and say you do not necessarily need a computer system that deals with every possible circumstance, what you need is a computer system which will deal with all the main stuff and then it is frankly easier to take the really difficult circumstances through by hand with somebody who is a real expert in the system and can do it by hand.
  (Ms Lomax) It is one of the interesting issues which the current industrial action will throw up, because we have devised a much simpler way of making payments to handle that. It will be interesting to see just how accurate that has been in most cases, how much simplicity you can introduce into the system.

  213. One final question. I was rather intrigued by Figure 6 in the report and the fact that it seems that all the best offices are Scottish, or at least northern and all the worst ones are in the south. Can you give a little bit more explanation as to why that is? Is it really just that it is difficult to get staff in the south because they all cost more and the only decent staff are up in the north?
  (Ms Cleveland) No, it is also the complexity of lives of a lot of the population we are dealing with in inner city areas. It is not just London, it happens in all of the inner city areas. People who live there tend to have more complicated lives, they have more changes of circumstance that we have to impact on the system. It is a combination of that with the high turnover of staff and the lack of experience of staff in those offices; we have experienced high turnover for a numbers of years . We did an interesting comparison between some London offices and Edinburgh offices because with devolution we lost a lot of staff into the Scottish Executive. We had similar turnover of staff but very different performance. It was because the base level of experience in the London offices on Income Support was just about a year, whereas in the Edinburgh offices it was still five years. It is that base experience. If you have a lot of experienced staff you tend to have better performance.

Mr Williams

  214. Your answers today have been dominated by reference to estimates, guesstimate and figures you would not like to quote because they cannot be relied upon. I gather you have 20 different information systems and because of that you have to rely very considerably on clerical work to supplement the systems. Why have you not instituted an IT solution to your problem?
  (Ms Lomax) These are huge systems. It is only 12-13 years since the Social Security system was first computerised under the operational strategy. Replacing the systems is a massive endeavour. We did not have the funding until 2000 to talk about replacing them. We planned it so that if we got the funding we would be able to begin to move reasonably fast, but we did not secure the funding from Treasury until the summer of 2000.

  215. I understand that you have no intention of introducing a grand new all-singing-all-dancing system until 2006 at the earliest.
  (Ms Lomax) We shall be modernising the system in pieces starting now.

  216. Oh; we have seen that.
  (Ms Lomax) Oh yes. We are already making some progress. You will already see results this year. You will see the new Child Support systems coming on stream to handle the new cases with the new formula. We will be able to change the way in which people are working in the new Jobcentre Plus offices and in some of the new pension services this year.

  217. May I ask what funding we are talking about? How much funding are you talking of that you have not been able to obtain but has become available from 2000. What are we talking about.
  (Ms Lomax) We have a welfare modernisation fund of something of the order of 2 billion to spend over the next three years.

  218. In answer to one of my colleagues you said that the amount of fraud within the system is 2 billion.
  (Ms Lomax) Yes.

  219. That would seem to suggest that the 2 billion expenditure which is going to help to deal with some of that problem and help to eliminate some of the errors would actually be money very well spent and spent quickly, would it not?
  (Ms Lomax) Absolutely and I am always telling people this.


7   Note by witness: We estimate from extrapolated data that of the number of people fraudulently claiming IS and JSA, 26,000 have been caught before, representing 0.5 per cent of the customer caseload. The cases involve mainly instrument of payment fraud. Following the introduction of the "two strikes" provisions, additional data will be collected from April 2002. Back

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