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20 Mar 2003 : Column 923W—continued
IT Contracts
Mr. Sayeed: To ask the Secretary of State for Work and Pensions if he will list IT contracts in his Department and its predecessors above £50 million in each of the last 10 years; what the inception date for each system was; when it became fully functional; when it became fully debugged; and what the cost of over-runs has been. [99003]
Mr. McCartney: The information is as follows:
- 1. Contract: Modernising Employment Service. Employment Services outsourcing its IT work in a partnership agreement with Electronic Data Systems (EDS). This agreement was revised to reflect major new investment in IT and telephony to improve services for jobless people and employers in the Modernising Employment Service (MES) Project.
- Inception Dates: August 1998—original outsourcing: October 2000—MES.
- Dates fully functional: August 1998
- Cost over-runs: None.
- 2. Contract: ACCORD Strategic Outsourcing Business Allocation (SOBA). The Department of Social Security awarded a contract to outsource all its IT provision. This contract also encompasses business outsourced previously in 1995 under Focus
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- 95 arrangements, and is concerned with the maintenance, development and operation of the Department's existing IT systems.
- Inception Date: 8 August 2000.
- Date Fully Functional: 1 September 2000
- Cost over-runs: None.
- 3. Contract: Child Support Reforms (CSR). The Department of Social Security awarded the contract, to provide new IT systems in support of the Child Support Agency. From 27 January 2003, new child support claims have been processed on existing rules. Processing claims on new rules is scheduled to begin on 3 March 2003, consequently the system is not yet fully operational.
- Inception Date: 8 August 2000.
- Date Fully Functional: 27 January 2003
- Cost over-runs: The amount the Department will pay has risen by around 7 per cent. over the term of the contract.
- 4. Contract: Early Office Infrastructure (EOI). These are a series of contracts to replace the desktops and associated equipment for the Departments employees and eventually the support arrangements for that kit. Two contracts of over £50 million have been awarded to date.
- i) Mobilisation contract to build the infrastructure for the support.
- Inception Date: January 2001.
- Date Fully Functional: This is an IT service contract, not an IT development contract. There have been a number of contact changes to build volumes and functionality
- Cost over-runs: Unable to identify any true cost over-runs at this stage as project not complete.
- ii) Rollout contract to manage the implementation of the kit and associated equipment.
- Inception Date: July 2001.
- Date fully functional: This is an IT service contract, not an IT development contract. The original contract has been subject to extension.
- Cost over-runs: Unable to identify any true cost over-runs at this stage as project not complete.
- 5. Contract: New Tax Credits (NTC). The contract is for the delivery of new and amended DWP IT to enable joint working with the Inland Revenue on NTC and to reflect the changes in benefit rules resulting from the introduction of NTC.
- Inception Date: 13 December 2002.
- Date Fully Functional: Expected to be fully functional on 7 April 2003.
- Cost over-runs: None
- 6. Contract: Lots B, C and D. These outsourcing contracts let for support and implementation of Office Services to SEMA Group UK Ltd. (Lots B and C) and International Computers Ltd.
- Inception Date: 14 June 1995. Contracts transferred to BT Arcway on 24 August 2000 under the ACCORD framework.
- Date fully functional: 14 June 1995. These are IT service contracts, not IT development therefore no formal date for acceptance testing.
- Cost over-runs: None.
- 7. Contract: NOSP WAN. The Wide Area Network business allocation via BT provides network access to the former DSS estate.
- Inception Date: 23 November 2000
- Date fully functional: Ongoing
- Cost over-runs: None.
The information relates to contractual arrangements made by the Department for Work and Pensions, the former Employment Services and the former Department for Social Security.
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On the question of "debugging", the view is that no IT system is completely free from "bugs". However, the Department deals with these according to priority, working in partnership with private sector providers to eradicate on an ongoing basis.
A list of IT contracts current at the time of Focus 95 outsourcing is available in the Library. Information prior to 1995 could be obtained only at disproportionate cost.
Minimum Income Guarantee
Mr. Flight: To ask the Secretary of State for Work and Pensions what estimate he has made of expenditure on the minimum income guarantee if there is (a) 100 per cent., (b) 95 per cent., (c) 90 per cent. and (d) 85 per cent. take-up of the scheme. [102590]
Mr. McCartney: Expenditure on the minimum income guarantee for 2002–03 is expected to be around £4.5 billion. This reflects the current number of MIG recipients recorded in administrative data and any fluctuations expected throughout the financial year.
The Department does not produce forecasts of expenditure on the basis of different levels of take-up. An indication of the likely expenditure under different levels of take-up can be estimated using the Department's publication "Income-Related Benefits Estimates of Take-up in 1999–2000". This shows expenditure take-up of the MIG for 1999–2000 to be in the range of 74 per cent. to 86 per cent.
Based on the midpoint of this range, and on the strong assumption that recent levels of expenditure take-up continue into the future, the table below provides an estimate of likely MIG expenditure under different
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levels of take-up. There is likely to be a wide margin of error around these estimates and they should only be used to provide an indication of the likely effect.
| Expenditure take-up level | Estimated MIG expenditure(£ billion) |
|---|---|
| 100 per cent. | 5.6 |
| 95 per cent. | 5.3 |
| 90 per cent. | 5.1 |
| 85 per cent. | 4.8 |
Notes:
1. The assumption has been made that the take-up levels requested relate to expenditure levels and not the case load level.
2. All figures are rounded to the nearest £100 million.
3. Expenditure for 2002–03 is based on PBR 2002 forecasts.
New Deal (Fraud)
Mr. Heald: To ask the Secretary of State for Work and Pensions what has been the (a) average annual and (b) total level of (i) erroneous payments and (ii) fraud connected with the New Deal to date; how much of this money has been recovered; and if he will make a statement. [88053]
Malcolm Wicks [holding answer 19 December 2002]: Since the inception of the New Deals, all allegations of fraud have been followed up and fully investigated if the circumstances warranted it. Information on the level of erroneous payments is recorded by benefit, not by programme. Similarly, the level of fraud committed by participants in the New Deal is recorded by benefit, not by programme. However, in 1998 we established the Jobcentre Plus Contractor and Programme Investigation Unit, as part of the Counter Fraud Investigation Division. The unit's work includes the investigation of all allegations of fraud committed by contractors under the New Deal. The available information is in the table.
| 1998–99 | 1999–2000 | 2000–01 | 2001–02 | April-November 2002 | Totals | |
|---|---|---|---|---|---|---|
| Number of allegations | 165 | 283 | 570 | 390 | 461 | 1,869 |
| Number that went to full investigation | Not available | Not available | 62 | 99 | 117 | 278 |
| Estimated loss (£) | Not available | Not available | 520,206.25 | 1,030,894.17 | 233,471.09 | 1,784,571.51 |
Notes:
1. Information on the number of allegations that went to full investigation and on the estimated loss for 1998–99 and 1999–2000 could be obtained only at disproportionate cost.
2. The information concerning recovery of this money is not available.
Source:
Jobcentre Plus Contractor and Programme Investigation Unit.
Occupational Pension Schemes
Jane Griffiths: To ask the Secretary of State for Work and Pensions if her Department will make contingency plans in the case of a shortfall in an occupational pension scheme to prevent a UK subsidiary of an overseas group abandoning the scheme and not meeting any funding shortfall. [103393]
Mr. McCartney: Provisions already exist to prevent companies from abandoning and not meeting any funding shortfall in occupational pension schemes. If a salary-related pension scheme is operating with tax approval, and is subject to the Minimum Funding Requirement (MFR), then a wide range of requirements under the Pensions Act 1995 apply to that scheme. This includes the funding of the scheme as determined by the MFR, and the requirement to maintain a schedule of contributions. The Occupational Pensions Regulatory Authority (Opra) has the power to sanction scheme managers or trustees who fail to take reasonable steps to comply with these requirements.
Also, legislation provides that when a salary-related scheme winds up, or a sponsoring employer becomes insolvent, any deficiency in the pension fund becomes a debt on the employer. This provides a mechanism for the trustees to be able to take action to pursue the debt.
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The pensions Green Paper, ' Simplicity, Security and Choice: Working and Saving for Retirement', Cm 5677, published on 17 December, discusses two options (the full buy-out option and the partial buy-out option) for changes to the debt on the employer provisions that might result in more funds being put into a scheme when a solvent employer chooses to wind it up. This would strengthen protection for scheme members, however this needs to be balanced against the costs on employers.
Jane Griffiths: To ask the Secretary of State for Work and Pensions what guidance he gives on protection for members of occupational pension schemes operated by companies whose parent company is listed overseas. [103396]
Mr. McCartney: The Occupational Pensions Regulatory Authority (Opra) produces guides to help pension scheme trustees understand some of the legal and technical issues involving pensions law. It also provides fact sheets for members of occupational pension schemes.
If a salary-related pension scheme is operating with tax approval, and is subject to the Minimum Funding Requirement (MFR), then a wide range of requirements under the Pensions Act 1995 apply to that scheme. This includes the funding of the scheme as determined by the MFR, the requirement to maintain a schedule of contributions and, when a salary-related scheme winds up, or a sponsoring employer becomes insolvent, any deficiency in the pension fund becomes a debt on the employer. That fact that the parent company of the principal employer sponsoring the pension scheme may be listed overseas is therefore not directly relevant.
The protection that people receive if their pension scheme is wound up is important, and we need to do more to protect the rights of scheme members. That is why we are consulting on proposals within the pensions Green Paper 'Simplicity, Security and Choice: Working and Saving for Retirement', published on 17 December, aimed at improving protection for scheme members on wind up. This includes proposals to share out scheme assets more fairly, introduce some form of insurance and strengthen protection for members whose solvent employer chooses to wind up its scheme.
We are consulting on our Green Paper, 'Simplicity, Security and Choice: Working and Saving for Retirement', Cm 5677 at the moment, and the consultation period runs until 28 March 2003.
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