Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 40-59)



  40. How do they compare with any other department's forms, like the Benefits Agency?
  (Mr McNeill) Again, I am sorry, I have never drawn a comparison. I am sorry.

  41. Okay. Can I just clarify about following up tip-offs. How many tip-offs do you get a year?
  (Mr McNeill) On what used to be the Intervention Board fraud line we get something like 2,500 tip-offs.

  42. Do you investigate them all?
  (Mr McNeill) Certainly we take every one of them seriously, yes.

  43. With respect, that was not what I asked.
  (Mr McNeill) There are different levels of investigation. There is an initial investigation which is almost desk top based to check what the basis might be. There is then perhaps a visit by an inspector again, one of the 400 inspectors we have. Then, depending what they find from both those exercises, there may well be criminal investigations. Our experience is—with a view to prosecution—about 15 per cent of the 2,500 result in investigations which may result in action being taken in the courts.

  44. I think it may be helpful if you give us a note outlining the various levels of that.
  (Mr McNeill) Yes.[3]

  45. Do you pay incentives for anybody providing a tip-off which results in the saving of public money?
  (Mr MacKinnon) No, we do not.

  46. Have you considered that?
  (Mr MacKinnon) We have not, no.

  47. Why not?
  (Mr MacKinnon) There has never been an obvious need to do so. Mr McNeill has already said that the fraud line run by the Intervention Board was well used and in the areas we would expect it to be used.

  48. You assume there is not a need to do so. Again, have you ever taken experience from, say, the Benefits Agency where they discovered, as I understand it, providing incentives did actually result in more reports coming forward which resulted in the saving of public money? Surely you must be aware of that.
  (Mr MacKinnon) No, I am not.
  (Mr McNeill) The Rural Payments Agency was launched on 16 October and we are very happy to consider that way ahead.

  49. If I had not raised it with you now are you seriously saying to me that you probably would never have thought of it?
  (Mr McNeill) No, I am saying it is early days for the Agency which launched on 16th October. We have had an extremely difficult year with foot and mouth disease etc. We are addressing many issues relating to what the end game ought to look like, that could be one of them, we will take it on board.

  50. That is not an unreasonable point for yourself but not necessarily for the department. The department has been here before foot and mouth and with joined up Government I would have thought surely you must have heard that other departments were offering incentives?
  (Mr Bender) I was aware they were. I was not aware the department or the IB had not considered it in the past. I suspect there are differences between behaviours in farming communities and behaviours in urban communities or rural communities as far as benefits. That is a suspicion but, I agree, it is something we should look into.

  51. Would you just clarify for me what those differences are then between farmers and people in urban and rural communities?
  (Mr Bender) My suspicion is that there is less sympathy in the rural community for a farmer who is being fraudulent but that is a suspicion and I accept your point, Mr Davidson, that this is an issue we should look into in dialogue with other departments.

  52. So you think people in my community, which is an urban one, are basically sympathetic to people committing benefit fraud?
  (Mr Bender) I do not know.

  53. You have just said that they are likely to be less sympathetic in rural areas.
  (Mr Bender) I withdraw the comment.

  54. Very wise actually I think. The fact that you do not have clear views on this does tend to indicate to me that you really have not explored this question of fraud. Were you aware of the statements made by the judge at the time when Mr Bowden was sentenced to jail? Were any of you aware of the statements of the judge?
  (Mr Bender) Yes, at the time.

  55. In particularly his statement that "when one hears the extent to which the Common Agricultural Policy is used for cheating, one despairs". That sounds a bit harsh, does it not? It does tend to make you believe that there is a fair amount of this going on if a judge spots it and judges, while they lead relatively sheltered lives, presumably are relatively aware of what is going on in rural areas. You seem to be astonishingly complacent about fraud.
  (Mr Bender) I apologise if that is the impression I am giving. I, and colleagues in the RPA, am not complacent about it. There are clearly lessons in relation to what other departments do that we need to follow up but we are absolutely not complacent about it and if I have given that impression, I should not have done.

  56. How many prosecutions have you had in the last few years?
  (Mr McNeill) There are two approaches to penalising farmers who make applications which are either not correct and fall under the heading of irregularity, which is really the agricultural schemes, where we can take administrative action which results in substantial fines, perhaps even no payments whatsoever followed by up to three years of no payments. In that case criminal prosecution may not be appropriate. On what used to be the Intervention Board side of the house, the trader schemes, etc., they would tend to be more focused on criminal prosecutions because that administrative process does not exist under those schemes. If you want to talk about the number in the UK, as the Permanent Secretary mentioned earlier, 393 cases in 2000 which meant that we were actually deducting in excess of £2,500 and in some cases substantially more than that.

  57. Each?
  (Mr McNeill) That is each, yes. That is a total of £12 million in administrative deductions for the year 2000. We did not take criminal prosecutions in those cases because there is a process within the IACS regulations which enables us to impose administrative penalties.

  58. Can I just clarify that. If somebody loses £2,500, say, is that of the same ratio as Mr Bowden when you recovered £1,000-odd and he got away with something like £144,000, or is that £2,500 because he has cheated on 100? I am not quite sure of the scale of this. Can you just clarify for me whether or not any of these people are named and shamed? Will I be able to identify somewhere a list of all these farmers who have been cheating the system?
  (Mr McNeill) Certainly where there are successful criminal prosecutions we publicise those.

  59. The administrative penalties?
  (Mr McNeill) We are taking a view, again, with the new agency as to how we manage that. We feel there should be perhaps some form of quarterly report noting what level of administrative action has been taken.

3   Ev 26, Appendix 1; and Ev 30, Appendix 1, Annex A. Back

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