Select Committee on Public Accounts Minutes of Evidence

Examination of Witnesses (Questions 120-139)



  120. And the cost of the total payments made out so that we can see the trends in the case of each one. Third, the number of claims submitted for each type of scheme.
  (Mr Bender) We will do that.[8] Can I also just point out to the Committee that the department has a Public Service Agreement target of reducing the administration costs of the CAP by ten per cent by 2004 and the establishment of the Rural Payments Agency is intended to bring that about.

  121. You did run through some figures quite rapidly. You did say ten to 13 per cent by volume and two to five per cent by value. As I understand it that is the UK element of total EU cases, is that right?
  (Mr Bender) Yes.

  122. Total cases of fraud?
  (Mr Bender) No, irregularity.

  123. What is the total cost of irregularity in the EU and what is the total cost of irregularity according to your estimate in the United Kingdom?
  (Mr McNeill) In the year 2000 for all Member States the total cost of irregularity was £298 million.

  124. So the two to five per cent is two to five per cent of that?
  (Mr McNeill) In 2000 it was four per cent and our element of that was £12 million.

  125. Mr Bender, in answer to Mr Davidson who asked about encouraging detection of fraud, you seemed to suggest that not a lot was being done, it was not anything you had thought about very much. This report from three years ago from this Committee precisely talked about this issue of encouraging detection of fraud. This is on page `vi' of the Twenty-Fifth Report of this Committee from 1998-99: "We recommend that the Ministry review its criteria for prosecution, such as the potential size of judicial penalties, the value of the irregularity and the claimant's past behaviour. This review should take into account the approach of other government departments such as the Benefits Agency, and the deterrent effect of prosecution on others tempted to abuse the system." Were you not aware of this recommendation?
  (Mr Bender) I was not aware of the last part of that recommendation; I plainly should have been and I apologise to the Committee.

  126. This was three years ago.
  (Mr Bender) I understand.

  127. You have been in charge of the department for two years.
  (Mr Bender) Nearly.

  128. June 2000. This does lead me to suppose that perhaps Mr Davidson's charge that you have been a little complacent has some merit.
  (Mr Bender) As I said to Mr Davidson, I do not believe that we are complacent about it. The one thing that is clear we have not done enough of is comparisons with other departments and other systems that other departments operate.

  129. If I can refer you to page `xvii', paragraph 61, it says: "Almost half of the 25 cases of suspected fraud or serious negligence referred for investigation were as a result of tip-offs to regional offices from other farmers. The Ministry should do more to encourage the exposure of those trying to defraud the taxpayer. Here too the experience of other departments, for example with benefit administration, may be of relevance". Are you saying that you are now going, although you were not before you came here today, to institute a programme of looking aggressively at what is going on in other departments?
  (Mr Bender) Can I answer that in two ways. The first direct answer is yes and the second answer is that I had already asked that the next meeting of the department's Audit and Risk Committee look at the idea of extending beyond the Rural Payments Agency some free phone fraud line type approach.

  130. Mr McNeill gave a cost of, I think it was, £16 million per year, or was it 60, for the cost of your detection.
  (Mr McNeill) My recollection is it is 400 inspectors, total cost about £16 million a year. We can provide the exact figures.

  131. If you could write with that figure that would be helpful.
  (Mr McNeill) I will do, sir.[9]

  132. How much of that goes on training?
  (Mr McNeill) I do not have that figure to hand.

  133. If you could provide that figure as well. Do you know if your training includes training in map reading?
  (Mr McNeill) I know that inspectors have had training in crop identification, circa 1995 it was a major initiative. I know that they have had training in practical skills required for their job.

  134. Including map reading?
  (Mr McNeill) My understanding is that is the case but, again, we will write to you. 10

  135. That would be very helpful. I, like others, am astonished by this question of the grid references. In paragraph 3.6 it says: "Under the arable scheme, Joseph Bowden supplied legitimate Ordnance Survey references and these were checked. However, under the Fibre Flax Scheme map references were not necessarily required, as fields could be referred to by name . . ." Does that mean that they were sometimes required and sometimes not required? That iswhat "not necessarily required" sounds like.
  (Mr MacKinnon) No, it meant that the field had to be identified in some way, so if you did not have a name you would need a number.

  136. So there was a form you filled in where you might have put the name or you put the number?
  (Mr MacKinnon) Yes.

  137. If you put the number, what happened to that number when it was received?
  (Mr MacKinnon) The inspector would expect to see that on the farm plan when he arrived. The inspector is sent a sketch map by the farmer showing where in relation to the whole farm those particular fields numbered or named will appear. When he arrives at the farm he will expect to see the farm version of that map and to see that number is in the location that he is being directed to.

  138. You were in some cases for the Fibre Flax Scheme asking for numbers but if they gave names that was okay instead.
  (Mr MacKinnon) No, we were asking them to identify the field.

  139. One of the ways of identifying the field you were accepting was to provide a number.
  (Mr MacKinnon) Indeed, sir, yes.

8   Ev 28, Appendix 1; and Ev 32-37, Appendix C. Back

9   & 10 Ref footnote to Q 88. Back

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