Select Committee on Public Accounts Minutes of Evidence


Supplementary memorandum submitted by the Department for Work and Pensions (DWP)

Question 21: Royal Mail "DO NOT REDIRECT"

  I can confirm that 90% of local authorities (366) currently use the "do not redirect" scheme run by Royal Mail. Of those who do not, some have their own, similar arrangements to identify or prevent redirection. We are currently conducting an evaluation of the scheme, which will address its benefits alongside the security risks in putting a marking on an envelope which identifies it as containing a cheque. In the light of that, we will be considering our approach to those authorities that are not currently participating.

Question 29: Local Authority Performance

  Housing and Council Tax Benefit administration is a component of the Comprehensive Performance Assessment. Local Authorities are judged against the performance standards which encapsulate best practice in Housing Benefit management, including fraud and error. A CPA of each single tier authority was undertaken during the period May—October 2002 (115 LAs). A similar exercise for all English District authorities will be carried out between February 2003 and October 2004. The best and worst performers in the Housing and Council Tax Benefit element are listed:
Poor Performers Best Performers
Milton Keynes

Brent

Coventry

Ealing

Enfield

Wokingham

Lambeth

Portsmouth

Sandwell

Swindon

Islington

Knowsley

North East Lincolnshire

Nottingham

Leicester

Newham

Tower Hamlets

Barnet

Bournemouth

City of London

Greenwich

Kensington & Chelsea

Peterborough

Blackpool

Bradford

Camden

Croydon

Doncaster

Dudley

Hartlepool

Hillingdon

Leeds

Lewisham

Merton

Middlesbrough

Newcastle upon Tyne

Oldham

Reading

Redbridge

Redcar & Cleveland

Richmond upon Thames

Salford

Solihull

Sunderland

Tameside

Thurrock

Waltham Forest

Wandsworth

Wirral

Wigan

Questions 36 and 37: costs arising under the Early Office Infrastructure (EOI)

  By November 2002 the Department for Work and Pensions had installed 100,120 workstations (desktops and laptops) into the ex-DSS estate along with the associated software, smart card readers, printers, servers and switches.

  The £156.7 million capital expenditure up to 30 November 2002 is broken down as follows:
Desktops£85.2 million
Laptops£7.5 million
Printers£11.1 million
Software£18.2 million
Servers£24.0 million
Network Switches£10.7 million

  These figures do not include installation costs.

  Phase 2 of the EOI Programme began in January 2003 and will be completed by 30 June 2004. This phase of the Programme includes the rollout of EOI into the remaining areas of DWP, and upgrading existing MES users.

Question 75: Benefit Fraud hotline figures

  The following table provides information on the number of successful prosecutions that result from hotline referrals.
YearApr 2000-Mar 2001 Apr 2001-Mar 2002
Number of referrals145,488 150,340
% of referrals investigated22.8% 21.9%
Number of investigations33,134 32,943
Successful prosecutions492 703
% of investigations resulting in prosecution 1.5%2.1%
Other outcomes (additional to prosecution) * 7,9178,844
% of investigations resulting in other outcomes 23.9%26.8%

  *  Other outcomes include cautions, penalties imposed administratively and adjustments to benefit paid or payable.

  Investigators receive leads to possible fraud ("fraud referrals") from three main sources including the public, some of whom use the hotline while others write or otherwise contact us. The other two sources are data matching and from DWP frontline staff. All are assessed against criteria that include the quality of the referrals. Of all these sources the Hotline includes a greater percentage of less credible allegations, indeed some allegations relate to people who are not on in receipt of welfare benefits. The number of prosecutions that result from allegations should be seen against the background that in 2001-02 we investigated 61% of all fraud referrals and prosecuted 2.4% of those investigated.

Question 82: SAFE performance

  The information requested is set out below.

  Notes:

  1.  Subsidy claimed by local authorities under the SAFE scheme is shown for the first six months of the 2002-03 (April to October 2002).

  2.  Subsidy claimed in quarters 3 and 4 will be likely to be higher for a number of authorities. This is because some authorities may wait until later quarters until claiming for all their detected overpayments on their subsidy claim forms. The estimated value of rewarded overpayments detected by local authorities may therefore also be an underestimate for some LAs.

  3.  The value of overpayments rewarded under the scheme will be less than the total value of fraud and error overpayments detected by LAs. This is because overpayments with a weekly value of less than £5 are not offered a reward under SAFE.

  4.  44 authorities have claimed no rewards so far in 2002-03, and are therefore recorded as finding no overpayments. These authorities may, however, go on to claim subsidy under the scheme in later quarters, once their detected overpayments are recorded on their claim forms.

  SAFE scheme data, Quarters 1 and 2 2002-03.
Local AuthorityTotal subsidy claimed Estimated value of overpayments rewarded under SAFE Prosecutions completed
ABERDEEN£22,821 £403,0001
ABERDEENSHIRE£0 £00
ADUR£7,630£94,000 5
ALLERDALE£0£141,000 1
ALNWICK£14,898 £94,0000
AMBER VALLEY£9,934 £132,0000
ANGUS£50,698£382,000 0
ARGYLL-BUTE£49,728 £326,0000
ARUN£0£170,000 1
ASHFIELD£43,229 £289,0000
ASHFORD£26,827 £203,0001
AYLESBURY VALE£27,361 £199,0004
BABERGH£14,407 £124,0004
BARKING£0£0 0
BARNET£0£0 4
BARNSLEY£44,228 £667,0000
BARROW IN FURNESS£32,021 £254,0002
BASILDON£13,469 £388,0005
BASINGSTOKE£51 £120,0008
BASSETLAW£20,119 £179,0002
BATH & NE SOMERSET£0 £264,0002
BEDFORD£0£0 2
BERWICK-UPON-TWEED£11,379 £119,0000
BEXLEY£0£311,000 13
BIRMINGHAM£797,552 £5,354,0000
BLABY£9,073£67,000 1
BLACKBURN£4,326 £461,0007
BLACKPOOL£0£0 0
BLAENAU GWENT£46,215 £295,0002
BLYTH VALLEY£30,305 £345,0000
BOLSOVER£10,561 £188,0000
BOLTON£121,924 £899,0000
BOSTON£12,410£94,000 4
BOURNEMOUTH£19,766 £418,0000
BRACKNELL£16,345 £140,0000
BRADFORD£44,504 £783,0008
BRAINTREE£29,326 £228,0005
BRECKLAND£0£88,000 0
BRENT£0£987,000 5
BRENTWOOD£1,912 £73,0002
BRIDGEND£7,962 £170,00013
BRIDGNORTH£0£0 2
BRIGHTON & HOVE£0 £00
BRISTOL£145,669 £1,258,0009
BROADLAND£10,040 £118,0001
BROMLEY£0£297,000 0
BROMSGROVE£4,405 £48,0001
BROXBOURNE£0£0 6
BROXTOWE£6,608 £146,0001
BURNLEY£31,396 £285,0001
BURY£29,305£461,000 1
CAERPHILLY£72,403 £793,00022
CALDERDALE£28,231 £355,0002
CAMBRIDGE£45,505 £312,00012
CAMDEN£0£805,000 2
CANNOCK CHASE£28,401 £309,0000

CANTERBURY£22,487 £265,0004
CARADON£0£92,000 0
CARDIFF£37,620 £973,0003
CARLISLE£40,266 £278,0002
CARMARTHENSHIRE£16,736 £411,0000
CARRICK£31,174 £263,0000
CASTLE MORPETH£0 £6,0000
CASTLE POINT£0 £00
CEREDIGION£1,027 £141,0000
CHARNWOOD£28,106 £201,0000
CHELMSFORD£0£14,000 0
CHELTENHAM£38,947 £302,0004
CHERWELL£19,473 £178,0003
CHESTER£15,415 £217,0000
CHESTER LE STREET£14,879 £109,0001
CHESTERFIELD£43,883 £314,0000
CHICHESTER£7,801 £127,0000
CHILTERN£12,738 £127,0001
CHORLEY£21,950 £167,0002
CHRISTCHURCH£8,346 £88,0002
CITY OF LONDON£0 £23,0000
CLACKMANNANSHIRE£0 £00
COLCHESTER£40,168 £349,0002
COMHAIRLE NAN EILEAN SIAR£6,611 £78,0000
CONGLETON£18,289 £137,0003
CONWY£22,097£252,000 12
COPELAND£0£90,000 0
CORBY£33,599£194,000 0
COTSWOLD£29,567 £205,0002
COVENTRY£0£388,000 7
CRAVEN£2,541£77,000 2
CRAWLEY£22,108 £163,0007
CREWE AND NANTWICH£30,833 £361,00011
CROYDON£99,641 £1,154,0003
DACORUM£0£0 0
DARLINGTON£40,624 £312,0000
DARTFORD£24,498 £178,0007
DAVENTRY£5,236 £84,0004
DENBIGHSHIRE£4,648 £246,0000
DERBY£26,235£629,000 1
DERBYSHIRE DALES£0 £00
DERWENTSIDE£71,062 £421,0002
DONCASTER£104,655 £1,196,0009
DOVER£37,898£351,000 0
DUDLEY£0£0 4
DUMFRIES & GALLOWAY£71,092 £465,0002
DUNDEE£50,641£850,000 0
DURHAM CITY£19,259 £149,0000
EALING£59,048£884,000 8
EASINGTON£18,390 £317,0000
EAST AYRSHIRE£0 £00
EAST CAMBRIDGESHIRE£6,534 £83,0000
EAST DEVON£7,015 £168,0000
EAST DORSET£9,105 £102,0000
EAST DUNBARTONSHIRE£24,755 £159,0000
EAST HAMPSHIRE£0 £03
EAST HERTFORDSHIRE£12,964 £112,0000
EAST LINDSEY£3,941 £261,0004
EAST LOTHIAN£10,286 £117,0000
EAST NORTHAMPTON£1,639 £47,0000
EAST RENFREWSHIRE£13,363 £137,0001
EAST RIDING£73,125 £600,0008
EAST STAFFORDSHIRE£0 £00
EASTBOURNE£18,567 £304,0000
EASTLEIGH£9,046 £137,0003
EDEN£2,042£54,000 0
EDINBURGH£116,526 £1,904,0000
ELLESMERE PORT£0 £00
ELMBRIDGE£1,631 £173,0000
ENFIELD£101,663 £1,040,0000
EPPING FOREST£15,865 £159,0007
EPSOM AND EWELL£3,598 £74,0004
EREWASH£966£80,000 0
EXETER£23,832£233,000 0
FALKIRK£92,292 £540,0000
FAREHAM£15,558 £113,0004
FENLAND£17,928 £147,0000
FIFE£74,464£990,000 9
FLINTSHIRE£3,987 £190,0001
FOREST HEATH£2,511 £38,0002
FOREST OF DEAN£17,633 £138,0002
FYLDE£3,659£126,000 4
GATESHEAD£0£0 0
GEDLING£0£22,000 0
GLASGOW£267,812 £4,153,00012
GLOUCESTER£5,448 £292,0000
GOSPORT£0£128,000 0
GRAVESHAM£0£0 0
GREAT YARMOUTH£0 £00
GREENWICH£127,954 £1,044,00012
GUILDFORD£36,556 £258,0000
GWYNEDD£34,265 £297,0002
HACKNEY£119,535 £1,468,0003
HALTON£33,958£434,000 0
HAMBLETON£9,740 £103,0000
HAMMERSMITH£0£0 13
HARBOROUGH£5,394 £48,0001
HARINGEY£0£1,118,000 3
HARLOW£4,886£149,000 23


HARROGATE£9,201 £244,0009
HARROW£2,404£381,000 1
HART£8,931£76,000 0
HARTLEPOOL£72,045 £486,0004
HASTINGS£0£335,000 0
HAVANT£1,701£187,000 0
HAVERING£8,087 £337,0000
HEREFORDSHIRE£38,011 £356,00011
HERTSMERE£18,216 £185,0006
HIGH PEAK£15,798 £146,0001
HIGHLAND£46,951 £629,0000
HILLINGDON£0£515,000 4
HINCKLEY & BOSWORTH£6,907 £67,0001
HORSHAM£29,523 £198,0000
HOUNSLOW£193£573,000 4
HUNTINGDON£24,144 £178,0001
HYNDBURN£25,297 £220,0000
INVERCLYDE£1,601 £116,0000
IPSWICH£61,772 £434,0009
ISLE OF ANGLESEY£0 £00
ISLE OF WIGHT£19,355 £359,0005
ISLES OF SCILLY£0 £00
ISLINGTON£0£860,000 9
KENNET£19,505£159,000 4
KENSINGTON & CHELSEA£0 £00
KERRIER£0£130,000 0
KETTERING£14,866 £113,0000
KINGS LYNN & WEST NORFOLK£21,275 £204,0003
KINGSTON-UPON-HULL£271,378 £1,676,0008
KINGSTON-UPON-THAMES£0 £122,0000
KIRKLEES£0£0 1
KNOWSLEY£0£0 0
LAMBETH£0£1,152,000 0
LANCASTER£0£285,000 0
LEEDS£229,202£1,854,000 9
LEICESTER£0£0 9
LEWES£0£149,000 0
LEWISHAM£130,182 £1,207,00010
LICHFIELD£0£41,000 0
LINCOLN£47,276 £338,0002
LIVERPOOL£0£0 7
LUTON£0£251,000 11
MACCLESFIELD£18,678 £173,0000
MAIDSTONE£0£123,000 4
MALDON£18,939£150,000 17
MALVERN HILLS£10,403 £113,0002
MANCHESTER£0£1,856,000 12
MANSFIELD£20,875 £350,0004
MEDWAY TOWNS£0 £487,0000
MELTON£5,951£48,000 0
MENDIP£6,761£219,000 0
MERTHYR TYDFIL£0 £92,0001
MERTON£7,332£460,000 0
MID BEDFORDSHIRE£6,389 £134,0000
MID DEVON£18,015 £147,0001
MID SUFFOLK£8,869 £78,0001
MID SUSSEX£0£88,000 1
MIDDLESBROUGH£5,556 £481,0002
MIDLOTHIAN£22,783 £170,0000
MILTON KEYNES£46,311 £400,0006
MOLE VALLEY£5,909 £67,0000
MONMOUTHSHIRE£29,209 £199,0003
MORAY£24,542£183,000 0
NEATH PORT TALBOT£21,484 £256,0008
NEW FOREST£36,274 £299,0005
NEWARK£0£66,000 0
NEWCASTLE UNDER LYME£0 £00
NEWCASTLE-UPON-TYNE£140,114 £1,174,00018
NEWHAM£0£1,442,000 3
NEWPORT£0£20,000 0
NORTH AYRSHIRE£22,557 £393,0000
NORTH CORNWALL£19,281 £195,0000
NORTH DEVON£601 £207,0003
NORTH DORSET£1,399 £56,0000
NORTH EAST DERBY£0 £00
NORTH EAST LINCOLN£0 £81,0000
NORTH HERTFORDSHIRE£26,847 £203,0003
NORTH KESTEVEN£10,040 £136,0000
NORTH LANARKSHIRE£95,911 £756,0000
NORTH LINCOLNSHIRE£46,509 £336,0007
NORTH NORFOLK£24,220 £201,0000
NORTH SHROPSHIRE£15,650 £107,0000
NORTH SOMERSET£0 £293,0003
NORTH TYNESIDE£124,683 £839,0006
NORTH WARWICKSHIRE£13,039 £102,0000
NORTH WEST LEICESTER£5,504 £111,0001
NORTH WILTSHIRE£12,876 £143,0003
NORTHAMPTON£39,778 £516,0004
NORWICH£72,954 £494,0000
NOTTINGHAM£197,787 £1,361,0000
NUNEATON£25,021 £330,0000
OADBY AND WIGSTON£6,335 £51,0000
OLDHAM£0£0 2
ORKNEY£5,640£42,000 0
OSWESTRY£7,680 £60,0000
OXFORD£44,364£390,000 1
PEMBROKESHIRE£0 £00


PENDLE£19,645£289,000 1
PENWITH£0£85,000 0
PERTH & KINROSS£28,970 £227,0002
PETERBOROUGH£4,398 £197,0002
PLYMOUTH£50,034 £648,0007
POOLE£21,956£244,000 0
PORTSMOUTH£0£197,000 0
POWYS£16,464£217,000 4
PRESTON£70,017 £526,0000
PURBECK£10,323 £92,0000
READING£35,468 £390,0003
REDBRIDGE£0£476,000 6
REDCAR & CLEVELAND£110,983 £864,0001
REDDITCH£21,667 £255,0006
REIGATE AND BANSTEAD£14,745 £131,0000
RENFREWSHIRE£0 £04
RESTORMEL£5,905 £157,0000
RHONDDA CYNON TAFF£47,230 £739,0002
RIBBLE VALLEY£13,685 £88,0000
RICHMOND-UPON-THAMES£5,009 £221,0002
RICHMONDSHIRE£4,423 £51,0001
ROCHDALE£146,602 £981,0001
ROCHFORD£2,095 £78,0003
ROSSENDALE£10,247 £189,0000
ROTHER£0£158,000 0
ROTHERHAM£67,762 £828,0000
RUGBY£24,829£167,000 1
RUNNYMEDE£12,589 £101,0000
RUSHCLIFFE£9,577 £86,0001
RUSHMOOR£0£69,000 2
RUTLAND£1,344£21,000 0
RYEDALE£3,945£64,000 0
SALFORD£0£0 3
SALISBURY£25,839 £220,0002
SANDWELL£109,109 £836,00015
SCARBOROUGH£41,821 £401,0001
SCOTTISH BORDERS£63,441 £369,0002
SEDGEFIELD BOROUGH COUNCIL £39,480 £260,0001
SEDGEMOOR£11,631 £156,0001
SEFTON£21,308£725,000 6
SELBY£0£41,000 1
SEVENOAKS£0£38,000 0
SHEFFIELD£293,282 £1,767,0002
SHEPWAY£19,176 £257,00010
SHETLAND£3,936 £44,0000
SHREWSBURY & ATCHAM£0 £01
SLOUGH£30,381£271,000 0
SOLIHULL£32,586 £367,0006
SOUTH AYRSHIRE£72,421 £454,0000
SOUTH BEDFORDSHIRE£0 £28,0000
SOUTH BUCKS£14,038 £108,0000
SOUTH CAMBRIDGESHIRE£17,987 £129,0001
SOUTH DERBYSHIRE£5,113 £115,0000
SOUTH GLOS£0£0 4
SOUTH HAMS£0£117,000 0
SOUTH HOLLAND£5,555 £89,0003
SOUTH KESTEVEN£11,398 £188,0000
SOUTH LAKELAND£23,676 £181,0000
SOUTH LANARKSHIRE£85,653 £633,0001
SOUTH NORFOLK£44,808 £262,0002
SOUTH NORTHANTS£0 £00
SOUTH OXFORDSHIRE£2,656 £152,0000
SOUTH RIBBLE£11,561 £132,0000
SOUTH SHROPSHIRE£5,682 £80,0001
SOUTH SOMERSET£23,618 £263,00012
SOUTH STAFFORDSHIRE£17,122 £144,0000
SOUTH TYNESIDE£82,215 £561,0000
SOUTHAMPTON£16,610 £617,0004
SOUTHEND ON SEA£71,018 £708,0002
SOUTHWARK£195,759 £1,571,0003
SPELTHORNE£0£66,000 3
ST ALBANS£0£72,000 0
ST EDMUNDSBURY£26,926 £179,0008
ST HELENS£48,874 £425,0003
STAFFORD£11,838 £104,0002
STAFFS MOORLANDS£0 £29,0000
STEVENAGE£21,629 £164,0004
STIRLING£52,970 £299,0002
STOCKPORT£59,994 £633,0004
STOCKTON ON TEES£0 £01
STOKE ON TRENT£0 £02
STRATFORD-ON-AVON£26,769 £205,0000
STROUD£12,996£136,000 9
SUFFOLK COASTAL£0 £63,0002
SUNDERLAND£150,966 £1,135,00029
SURREY HEATH£9,496 £81,0000
SUTTON£0£0 7
SWALE£0£229,000 4
SWANSEA£40,734 £765,00016
SWINDON£34,822 £416,0000
TAMESIDE£27,180 £599,0006
TAMWORTH£11,703 £166,0000
TANDRIDGE£1,208 £70,0002
TAUNTON DEANE£10,034 £155,0001
TEESDALE£12,251 £76,0000
TEIGNBRIDGE£2,964 £152,0000
TELFORD AND WREKIN£45,573 £430,0002


TENDRING£0£242,000 0
TEST VALLEY£17,890 £128,0001
TEWKESBURY£6,500 £88,0000
THANET£11,501£611,000 7
THREE RIVERS£13,021 £114,0002
THURROCK£92,552 £544,0001
TONBRIDGE & MALLING£11,969 £144,0006
TORBAY£0£302,000 3
TORFAEN£16,089 £247,0000
TORRIDGE£0£53,000 4
TOWER HAMLETS£969 £1,127,0001
TRAFFORD£0£178,000 1
TUNBRIDGE WELLS£0 £89,0003
TYNEDALE£1,264 £60,0000
UTTLESFORD£3,840 £79,00011
VALE OF GLAMORGAN£1,130 £205,0004
VALE OF WHITE HORSE£0 £58,0001
VALE ROYAL£7,306 £156,0000
WAKEFIELD£0£0 3
WALSALL£60,302 £841,00012
WALTHAM FOREST£3,458 £814,0001
WANDSWORTH£60,965 £831,00013
WANSBECK£10,822 £174,0000
WARRINGTON£1,732 £249,0003
WARWICK£18,334 £284,0002
WATFORD£0£105,000 0
WAVENEY£40,583 £381,0000
WAVERLEY£13,724 £208,0000
WEALDEN£17,465 £181,0001
WEAR VALLEY£13,455 £131,0000
WELLINGBOROUGH£22,031 £140,0001
WELWYN HATFIELD£28,909 £195,0002
WEST BERKSHIRE£3,926 £207,0002
WEST DEVON£0£46,000 0
WEST DORSET£11,560 £163,0001
WEST DUNBARTONSHIRE£0 £00
WEST LANCASHIRE£0 £00
WEST LINDSEY£2,688 £106,0000
WEST LOTHIAN£34,868 £496,0000
WEST OXFORDSHIRE£13,885 £114,0001
WEST SOMERSET£0 £49,0000
WEST WILTSHIRE£24,099 £211,0000
WESTMINSTER£0£578,000 2
WEYMOUTH & PORTLAND£0 £74,0000
WIGAN£46,733£463,000 1
WINCHESTER£27,480 £197,0004
WINDSOR & MAIDENHEAD£9,784 £172,0003
WIRRAL£37,586£788,000 4
WOKING£15,364£133,000 0
WOKINGHAM£8,248 £89,0000
WOLVERHAMPTON£34,644 £802,0000
WORCESTER£22,305 £183,0004
WORTHING£12,583 £195,00015
WREXHAM£0£0 2
WYCHAVON£25,731 £208,0002
WYCOMBE£44,472 £298,0000
WYRE£24,041£217,000 7
WYRE FOREST£7,106 £151,0000
YORK£46,577£362,000 2
TOTAL£10,566,676 £126,473,0001,014

  As suggested at the hearing the costs of increasing the allowance in income related benefits for couples to twice the allowance for single people would be very significant indeed which DWP estimate as £2.2 billion in 2003-04 rising to £3 billion in 2005-06. The sorts of increases in benefit levels for couples proposed here could have a detrimental effect on work incentives.

  Such a change would not, of course, remove all financial incentive to disguise a living together relationship. For example there would still be an incentive to do this where one member works full time or has an alternative source of significant income, and consequently disbars both from benefit because they are treated as a couple. This would clearly not be a cost effective approach to tackling fraud in this area.

Question 109: Levels of activity—shadow economy

  Lord Grabiner reported on the Shadow Economy in his report titled "The Informal Economy" published in February 2000. DWP has worked closely with the Inland Revenue, with HM Customs and Excise and with other Departments to implement his recommendations. Every one of our Regions has investigators supporting this initiative in specialist teams:

JOINT SHADOW ECONOMY TEAMS (JOSETS)

  There are 20 JoSET sites. Each has co-located investigators from HM Customs and Excise (HMCE), Inland Revenue (IR) and DWP. At the present time there is a total of 199 staff working in the JoSETs comprising 87 from HMCE, 59 from IR and 53 from DWP.

  The JoSETs investigate traders that are suspected of tax evasion or of employing people who are in receipt of benefit. The teams also look for any evidence the employer has colluded in fraudulent benefit claims by, for example, suppressing from their accounts wages paid "off record". DWP has been a full partner in the JoSETs since May 2002. Prior to that DWP involvement was piloted in five of the 20 teams.

RESULTS

  As at end of February 2003 we have recorded 93 sanctions (including prosecutions), 335 adjustments to benefit payable, 246 overpayments and five collusive employers. The total value of overpayments is nearly £681,000.

JOINT FASHION INDUSTRY TEAMS (JOFITS)

  There are two JoFIT sites—Leicester and London. These teams focus specifically on the fashion industry.

  The co-located teams comprises officers from C&E, IR and DWP and became operational in August 2000. Following on from the original pilot, the aim is to:

    —  Improve overall understanding of legal requirements

    —  Raise compliance within the industry through:

    —  Educating and working with traders

    —  Joint visiting

    —  Tackling fraud, including benefit fraud

    —  Information sharing.

MULTI AGENCY TEAM (MAT)

  The Multi Agency Team (MAT) project is an experimental team based at Wolverhampton which was set up in October 2000. The Team is staffed from Customs & Excise (C&E) Inland Revenue (IR), Jobcentre Plus and Child Support Agency (CSA). DWP has two staff detached to the MAT.

  MAT aims to improve tax, benefits and employer compliance across a wide range of businesses and customers to:

    —  Increase direct and indirect tax yield

    —  Reduce benefits abuse against central and local government

    —  Reduce child poverty.

RESULTS (JOFIT AND MAT)

  The results for JoFITs and MAT are combined for stats purposes. As at the end of February 2003 we have recorded 34 sanctions, 78 adjustments to benefit, 47 overpayments and two collusive employers prosecuted. The total value of adjustments to benefit and overpayments is nearly £80,000.

OPERATION GANGMASTER

  Gangmasters are organisers for the supply of labour to employers who require short term (often seasonal) staffing. Examples include crop pickers. There is a core organising team liaising with other Government Departments (including Immigration, the inland Revenue and the Customs) to identify gangmaster activity and deploy multi-agency project teams of investigators on specific operations. Investigators are provided from existing field resources as and when required, resourced from project funding. We are currently seeking to expand the core Gangmaster organising team and building on existing cross-government initiatives to increase activity levels, including widening the remit from agricultural to non-agricultural activity.

RESULTS

  As at end of February we have recorded 110 sanctions, 857 adjustments to benefit, 166 overpayments and one collusive employer prosecuted. Total value of MVAs and overpayments is nearly £346,000.

  Our most recent exercise (Operation "Shark") produced 18 prosecution cases, 33 adjustments to benefit and 41 overpayments. The combined value of adjustments to benefit and overpayments will be in excess of £17,000.

  Operation "Shark" has also led to tax liabilities being assessed on two of the gangmasters amounting to £363,000 plus £40,000 penalties.

Questions 134; 198; 214; 221 and 249 on Data protection constraints, Frequency of Data-Matching and Data-Matching of DWP and other Government Department data

DATA PROTECTION CONSTRAINTS

  Legal authority is needed before other Government Departments and agencies are able to share their data with DWP (and vice versa). In addition, any legally authorised exchange of data must be in accordance with the principles of the Data Protection Act 1998 and use of the data must not breach the requirements of the Human Rights Act 1998.

  In practice, the Data Protection Act 1998 does not constrain the Department in pursuing benefit abuse. The Human Rights Act 1998 does (rightly) set limits on the use of powers to intrude into personal privacy. Parliament has also made clear that a balance must be struck between the reduction in benefit abuse and the protection of privacy. For example, it was unwilling to include in the Social Security Fraud Act 2001 a provision for DWP to obtain information from banks and other financial institutions on benefit claimants judged to be at high risk of committing fraud. The power is limited to cases where reasonable grounds for suspicion of fraud exist.

  The legal gateways to enable data-sharing between Departments have expanded considerably as a result of recent legislation, to the DWP's advantage. Certain pieces of legislation authorise the passing of data from individual departments to DWP in terms broad enough to meet the needs of fraud prevention and detection. In addition section 122B of the Social Security Administration Act 1992 includes a general provision for DWP to acquire new sources of data for other government Departments where authorised by secondary legislation.

  In practice, and bearing in mind that a balance has to be struck with protection of privacy, DWP now has broad access to the most important data it needs, in particular from the Inland Revenue, HM Customs & Excise and the Home Office. The exchange with Inland Revenue is especially productive, extending beyond tax information to cover data on National Insurance contributions and, more recently, tax credits. There is an active programme to identify new ways of exploiting the available access. For example, we are now beginning to make use of IR data to identify hidden capital that may affect entitlement to benefits. A number of incorrect claims have been identified as a result.

  In respect of private sector information, the provision in the Social Security Fraud Act 2001 giving DWP access to data held by banks and other financial institutions marks a significant advance.

  There are practical constraints. Differing IT systems and standards may mean that exchange of data between Departments, and actually matching the data, may be resource-intensive. Some data sources may require considerable work in order to make them useful. Judgements have to be made about the relative cost-effectiveness of data-matching against other forms of preventive and detection activity. Moreover some of the fraud the DWP encounters in the most vulnerable benefits involves cash transactions in the shadow economy, which do not leave traces in departmental or other records.

FREQUENCY OF DATA-MATCHING

  An extensive programme of data matching on benefit claimants is in place both within the Department and between the DWP and other Government Departments, most notably Inland Revenue, to identify potentially fraudulent activity. Some 72 different runs take place with intervals varying from weekly to six monthly. Thirty-four are run weekly to identify anomalies including, for example, a customer claiming Income Support whilst his or her partner is working, children being claimed for by more than one customer and a customer claiming Jobseeker's Allowance whist in employment. The frequency of each run is dependent on a number of factors including the refresh rate of the data and the capability of the data provider to supply data strips. All runs are reviewed regularly to ensure that they continue to be effective in detecting incorrectness and to consider whether new data matching rules would increase effectiveness. We also continue to pursue new sources of data and new matches.

DATA-MATCHING OF DWP AND OTHER GOVERNMENT DEPARTMENT DATA

  The issues surrounding the data-matching of staff records are complex. A data matching exercise was carried out in the 1990s to match the then DSS staff database against claimant data for Disability Living Allowance. The exercise has not been repeated although, in 1994-95, we trialled a match of staff data against the Income Support system. The early indications (and the previous DLA exercise) suggested that the full run would not be worthwhile and it was abandoned. We have not undertaken any further exercises targeted specifically at DWP staff who are benefit claimants.

  The Department has explored the possibility of further exercises using the departmental payroll in accordance with legislation and the guidance of the Information Commissioner. Our current understanding is that, to undertake an exercise of this nature, the Department must inform staff in advance and give them the opportunity to opt in. In practice, these constraints are likely to reduce the effectiveness of such an exercise. In practice the need to check whether recipients of relevant benefits are also in employment is already met across the whole of the public and private sectors by our access to Inland Revenue information. Action is in hand to improve the exploitation of that access.

Question 190: LA use of prosecution services

  The Department's prosecutions solicitors have made provision for six casual lawyers and six administrative officers (one each per Area Legal Office). So far 111 local authorities have signed service level agreements and propose to send us work. We plan to review the provision of services when the demand becomes clearer.

  DWP has made available £50,000 during 2002-03 with a further £1million for 2003-04 for England and Wales to cover the cost of the Local Authority cases put forward for prosecution. We have also given £150,000 to the DWP Fraud Prosecutions Unit in Scotland to improve the quality of the cases that are put forward to the Procurator Fiscal.

Questions 229-236: Targeting Fraud advertising campaign

  Which papers were used for the advertising campaign in March 2001?

  A full list of all papers used in the March 2001 campaign is set out below:
PublicationNo of insertions
Daily Star6
Sun5
Mirror5
Daily Record5
Daily Mail4
Daily Express4
Times4
Guardian3
News of the World3
Sunday Mirror3
Sunday People3
Sunday Mail3
Daily Telegraph2
Independent2
Mail on Sunday2
Sunday Express2
Sunday Times2
Sunday Telegraph2
Observer2
Independent on Sunday2
Wales on Sunday2
Yr Herald2

  This summary of research conducted for the Targeting Fraud national advertising campaign in March 2001 indicates that:

    —  The campaign succeeded in its objectives of increasing awareness of benefit fraud generally and communicating key messages;

    —  The general public believe that fraud is widespread and agree that fraud is unacceptable They agree that the Government is tackling benefit fraud;

    —  There was an upward movement across all the key messages with Benefit Claimants particularly noting the ". . . you will get caught" message;

    —  Reaction to the tone of the ads was typically positive, being described as realistic and believable.

  Both GB (nationally representative sample of the general population) and GBBC (GB benefit claimants) at the post wave considered benefit fraud equally serious and widespread with significant amounts of money stolen. GBBC were more likely to think it was difficult to commit fraud compared to the GB sample, possibly due to their greater experience of the benefit system.

WHAT WAS THE RATIONALE OF THE CAMPAIGN?

  The objectives of the campaign were:

    —  to reinforce positively honest behaviour;

    —  create a climate of intolerance to fraud;

    —  and to undermine its social acceptability.

  This phase of the campaign was designed to work on two levels referred to as Level 1 and Level 2.

  Level 1: The objectives of the level 1 campaign were to make "fiddling" harder to justify by showing that fraud is unfair. This was communicated through television and press advertisements to a wide audience; general public, opinion formers and the claimant community. For this reason the range of media used targeted all social groups (including readers of broadsheet newspapers).

  Level 2: The level 2 campaign aimed at creating a climate of unease and building a fear of detection amongst those committing or likely to commit benefit fraud. The media employed was posters and radio as well as television and newspapers and was aimed specifically at the core benefit claimant community.

  Both levels of the campaign ran simultaneously and used the branding "Targeting Fraud".

  The continuation of the campaign throughout 2001-02 revised this strategy to target fraudsters more directly with messages about deterrence and detection (featuring the fraudsters being caught). The press coverage included national tabloids and regional papers but not national broadsheets.

Question 255: Automatic cross-checking of benefit information

  Creating a single data store of customer information is a complex task. The size of the Department's legacy systems for handling benefit information means that achieving better integration of data is a real challenge. For that reason, we are currently focusing on key business areas that would most benefit from automatic cross-checking. Steady progress is already being made in a number of areas.

  We have already shared information on all customer identities through common access to our Personal Details computer system and the Departmental Central Index system.

  An integrated electronic information gathering system will begin to roll out to Jobcentre Plus offices this year. It will deliver a front-end information gathering process for new and repeat claims to key working age benefits of Income Support, Jobseeker's Allowance, and Incapacity Benefit. It will also gather information on associated claims for Housing Benefit, Council Tax Benefit, Child Support, Social Fund Crisis Alignment to Benefit Payments and New Tax Credits. The system will automatically signal any relevant information already held on departmental systems, helping to reduce fraud and error.

  In addition we expect in 2004 to have electronic linkage of Disability Living Allowance and Incapacity Benefit information with that of Income Support and Job Seekers Allowance, so that appropriate adjustments can be made to Income Support assessments for the relevant customers. This should enable us to eliminate the two highest value areas of current error.

  The possibility of establishing further linkage is under active consideration as part of a wider update of our IS/IT strategy. Further integration of a range of information relating to benefits is being examined. Current plans include the introduction of a departmental-wide view of customers in 2004, focusing initially on benefit awards and payments.

  This facility is likely to expand over time to enable us to tackle other key business problems. For example, better access to data on household composition (ie detailing people who live and claim benefits from the same address) would improve our ability to tackle frauds associated with those living together as husband and wife—a major source of loss.

  We are also planning a new system to enable the collection of financial data (eg details of a customers benefit payments) to be held in one place. Rolling out from 2004, this system will initially link into one legacy system, followed by the remaining legacy systems, including CSA, later on in the programme.

Question 272: Effectiveness of sentences on benefit fraud

  DWP has not historically kept records of the numbers of convicted benefit fraudsters who re-offend, but a broad estimate was made in connection with the "two strikes" provision in the 2001 Social Security Fraud Act that it might be around 5%. We have kept careful records since "two strikes" came into force and these show that so far two people have been convicted of benefit fraud on two separate occasions since April 2002 and have therefore received "two strikes" penalties. (It will be appreciated that the new sanction applies only where both of the penalties have been imposed since the Social Security Fraud Act 2001 came into effect). The effectiveness of "two strikes" will become clearer as more data becomes available over a longer period.

  DWP does not have information on the extent to which non-custodial sentences imposed in connection with benefit fraud are actually enforced, but is seeking to obtain this in connection with its present review of sanctions policy (undertaken in accordance with the recent NAO recommendation). We are consulting Home Office and LCD to find what information they may have. The monitoring of effectiveness of community based penalties falls to the Probation Service and the Home Office, who retain data relating to community penalties imposed across the board and not just in relation to benefit fraud offences.

Question 276: Returns on Investment in Anti-fraud measures

  Currently, conservative estimates put the total value of overpayments rewarded under SAFE over the course of 2002-03 at approximately £250 million. The latest annual expenditure forecast for SAFE subsidy is around £25 million (local authorities have until summer to submit their claims for 2002-03).

  Of course, there are "unseen" savings from SAFE, in the form of the deterrent effect of sanctions and prosecutions that are incentivised as part of the scheme. We cannot easily place a value on the effect of these.

Sir Richard Mottram KCB

Permanent Secretary

25 March 2003


 
previous page contents

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2003
Prepared 4 July 2003