Examination of Witnesses (Questions 40-59)
21 JANUARY 2004
MS ANNE
MCCLEARY,
MR FRANK
BRANNIGAN AND
MR RICHARD
STEWART
Q40 Mr Bailey: The nature of the claims
and the numbers of the claims is certainly highly suspicious.
How big an issue is fraud in relation to claims under the Act
and what measures has the Agency in place to counteract fraud?
Ms McCleary: Fraud is something
which is obviously a criminal matter and therefore we are talking
about the criminal standard of proof. We are talking about something
being proven beyond all reasonable doubt, whereas we would be
operating to a civil standard of proof, which is on the balance
of probabilities. There is currently a fraud investigation ongoing
in relation to these claims. As you may or may not know, there
had also been a fraud investigation ongoing in relation to claims
against the Ministry of Defence in connection with helicopters.
If you put those two figures together, there has to be a conclusion
that fraud is a factor here. In terms of fraud counter measures,
the changes which we brought in have been at least partially to
do with that kind of issue.
Q41 Mr Bailey: I appreciate that you
cannot comment in detail on the investigation.
Ms McCleary: No; unfortunately.
Q42 Mr Bailey: Could you just give some
idea what procedures are in place to ensure good liaison with
the army in processing the claims under the Act?
Ms McCleary: Yes. We have a procedure
whereby whenever a new battalion moves into Northern Ireland,
we immediately make contact with them and I go down to visit them
and to talk about the issue of claims and the importance of the
military role in the defence of these claims. Other members of
our staff have also come down with me and spoken to the officers
on the ground. We found that particularly helpful at the beginning
when we were carrying out research in relation to establishing
why the number of claims had gone up, because we discovered that
there was no great degree of mutual understanding as to what the
military did, what we did and how we could best work together.
We now have a standard procedure whereby every time there is a
new battalion moving into Northern Ireland, we go down and visit
them to establish that personal relationship.
Q43 Mr Swire: There is clearly an element
of the population in Northern Ireland who regard your Agency as
a potential source of a secondary income. Are those people who
are proven to be repeatedly submitting fraudulent claims and are
known to be doing so treated harshly? Have you ever as an Agency
had any counter claims or launched any court proceedings at all
against these people?
Ms McCleary: The significant phrase
there is "fraud". While there may be a significant number
of repeat claimants, just because someone is making repeat claims
does not mean that person is being fraudulent. There is a fraud
investigation ongoing at the minute and we have been assisting
the police as far as possible in relation to that. We will take
whatever action we think is appropriate once those police proceedings
have concluded.
Q44 Mr Clarke: We use the term customer
satisfaction and it may seem a clumsy use of the lexicon in terms
of some of the people who may contact the Agency, because nobody
would want to be in a position where they have to put in a claim.
We are aware that the Agency does carry out surveys as to how
people feel they have been dealt with, the last one being in 2001.
Could you tell us a little bit about how and who carried out that
last customer satisfaction survey and what were the main areas
of concern raised by those who responded to it?
Mr Brannigan: One of the targets
the minister sets for us is to maintain the level of satisfaction.
In the last survey carried out in 1999-2000 we had a level of
satisfaction of 75%. Typically the areas of satisfaction we are
looking at are: courtesy of staff; speed of our reply; all the
things you could imagine would lead to the service we are providing.
One of the difficulties we encountered is that we are serving
people who have both received compensation under one of the schemes
and also those who have been refused. Sometimes an applicant's
attitude as to the service provided can be coloured by whether
they did or did not receive compensation. To come back to the
methodology, a selection of applicants, approximately 10% of those
whose claims have been cleared within the year previous to when
we were conducting the survey, together with another number of
applicants' solicitors, are actually sent a questionnaire and
in the case of solicitors and a very small number of applicants,
they are also visited by this independent survey company which
carries out the survey on our behalf.
Q45 Mr Clarke: May I just check those
dates? The information I have is that the survey is carried out
on a biennial basis, every two years and that the last such survey
was 2001.
Mr Brannigan: I beg your pardon,
the last survey was 2001-02 and we are in the process of carrying
out a survey again; prior to that it was 1999.
Q46 Mr Clarke: I am not trying to discredit
the work which is done in any way but the reason I use those dates,
and having visited we know how difficult the work can be and sometimes
how fractious the relationship can be between those who may think
they have a claim and those who do not, but the overall satisfaction
level in 2001 was 65%, down from 71% in 1999 and the lowest since
1993. Could you give us an indication as to why, during that period,
satisfaction dropped and whether or not you think that will turn
around because of the introduction of the Tariff Scheme?
Ms McCleary: The first answer
is that satisfaction dropped probably because of the introduction
of the new Tariff Scheme. There is a significant number of those
who are being asked for their views who were unhappy with the
whole principle of the Tariff Scheme being introduced. In terms
of whether or not we expect it to improve, we are in the throes
of carrying out the next survey at the minute and undoubtedly,
as we have accepted, there has been a slow start to the Tariff
Scheme. The likelihood is that things will not improve this time
round, but the time afterwards we would be optimistic that the
satisfaction levels would improve.
Q47 Mr Clarke: Given that explanation,
is that the reason why improvements in user satisfaction are not
included in the Agency's key performance targets for 2003-04?
Is that because you are expecting the improvement not to be there?
Mr Brannigan: It would be a fair
assumption that we did expect that. Since we had not got the scheme
up and running to its optimum level, we would not expect there
to be an increase, but we could be surprised.
Q48 Mr Clarke: Would it be awful of me
to suggest that it may be a good idea in your next target setting
round to include user satisfaction as it has been omitted this
time?
Mr Brannigan: Yes; yes. As an
organisation which has an interest in maintaining its charter
mark, that type of survey is an important element of that. Clearly
we would want to maintain and get the results from that and indeed
see the pick-out from that where we may be going wrong.
Q49 Reverend Smyth: When we visited you
we questioned the figures for the outturn for 2002-03 and the
forecast for 2003-04. We now have amended copies. Would you agree
that the budget allocation for the current year is more than double
the forecast outturn across a range of headings? As I look at
it, it is £40-odd million more. If the allocation is based
on inflated Agency bids, does this not deny vital funding to priority
programmes in other areas? How is this underspend managed?
Ms McCleary: The simple answer
to the question of money being allocated here and then not being
used elsewhere is that the department has been alerted about the
underspend and has taken that money and it is being used elsewhere
in the usual way. In relation to how the underspend came to be
there in the first place, it really is a combination of factors.
What happened the year before, 2002-03, was that the allocation
had been based on a cash allocation but the outturn was on a resource
basis. So in 2002-03 we were allocated initially £93 million,
then that amount was reduced, because we knew we were not going
to spend as much as that, to £70 million. Effectively what
we were saying was that we believed we were going to spend £93
million and then later on in the year we said no, we believed
we were actually going to spend £70 million. During that
financial year resource budgeting came in and the resource budgeting
is effectively looking at the value of the claims which come in
during that year. That was the same year the Tariff Scheme came
in and there was a considerable reduction in the number of claims
which came in. This meant that the outturn was on a resource base,
that is the value of the new claims which came in during the year,
as opposed to the amount we actually spent during the year. The
significance in relation to 2003-04 is that the 2003-04 papers
are both on a resource basis; they are both based on what we thought
would be the value of the new claims coming in and the value of
the new claims which did in fact come in. Since there was still
a reduction in the number of claims coming in and since the £71
million had been estimated prior to the 2002-03 outturn, it just
means that you are really comparing £71 million allocation
in 2003-04 with the £70 million allocation in 2002-03. So
in fact it is something which will be resolved in the next financial
year hopefully.
Q50 Reverend Smyth: It is a bit like
weather forecasting. What steps is the Agency taking to be more
accurate in the future, because sometime we may have to look into
the question of where the underspend went to and whether vital
areas of Northern Ireland's needs were not met because this money
was wrongly allocated at that particular time. The one you managed
to get very close to was criminal damage, where your forecast
was £3,996 and it is turning out at the moment to be £3,900.
There is a great distortion between a forecast of £15,556
and the allocation of £51,840 and that is in millions, is
it not?
Ms McCleary: Yes. One of the problems
with this is the way the estimates were based. In the past it
had been done by looking at the number of claims which we expected
to receive and looking at the average award per claim. However,
the Audit Office would not allow us to do that during 2003-04
and that is the reason why the figures are different but the estimation
will be closer this year.
Q51 Mr Clarke: Is the Audit Office helping
you to take steps to improve the accuracy.
Ms McCleary: We are working very
closely with them.
Q52 Mark Tami: How do you see the new
Tariff Scheme with its increased reliance on IT affecting the
overall staff numbers? Will it have an effect on those, do you
think?
Ms McCleary: The total staff numbers
which we have had over the last 18 months or so were: in April
2002 132 staff, just before the new scheme came in; in May 2002,
when the new scheme came in, the number went up to 146; in March
2003 it was roughly the same at 141; as of December 2003, the
number is down to 127. A number of those staff will have been
re-allocated within the organisation and we are putting the staff
where they need to be.
Q53 Mark Tami: With the reduced number
of claims under the Terrorism Act, if that stays the same—obviously
we cannot predict how it will go—that presumably will also
have an impact.
Ms McCleary: At this very minute
we are bringing in experts to look at that and to see what the
appropriate complement would be.
Q54 Mark Tami: That was what I was going
to move onto. How are you managing that process? Is that through
bringing in experts?
Ms McCleary: We are bringing in
internal experts in the field. We are carrying out a review to
make sure we are doing the right things, the right way with the
right people.
Q55 Mark Tami: You do not have an end
number in sight.
Ms McCleary: No.
Q56 Chairman: Back to compensation before
we finish. Your annual report shows that there were more than
1,100 cases where offenders were identified because you have the
power to recover compensation and costs from offenders, do you
not?
Ms McCleary: Yes.
Q57 Chairman: You decided not to pursue
recovery. Why is that number so high? What steps do you take to
recover compensation?
Ms McCleary: As you rightly say,
we have the power to recover from an offender in relation to compensation
which we have had to pay to that offender's victim. Our experience
in the past has been that it is uneconomic to attempt to recover
from every offender because you have to go to court to get court
awards to recover that money. There is a considerable risk that
the offender can resist it on the basis that he has no money.
Alternatively you can get involved in a very long drawn out recovery
plan. We have found from experience that it is uneconomic. There
is another issue in relation to it which is the question of equality.
Our policy is that we will recover from those whenever they are
making further compensation claims and whenever they make a compensation
claim we recover from that offender the amount we have paid out
because of actions they took.
Q58 Chairman: It is all very well to
say that if they have no money you do not pursue them. That would
bring an end to all fines in magistrates' courts, would it not?
We have a law which says you recover from the offender what you
have had to pay to the victim.
Ms McCleary: Yes.
Q59 Chairman: Why does economy come into
it? What you are actually doing is not carrying out the law which
Parliament has passed saying the offender will recompense the
victim. You are saying that may be the law but as far as you are
concerned it is not worth it.
Ms McCleary: It is not quite as
straightforward as that. The law does not provide us with a duty
to recover; the law gives us a power to recover. Whenever we are
considering whether or not to exercise that power, we would have
to take all factors into account. We have to keep an eye on the
public purse as a whole and it has been found from bitter experience
that it is uneconomic.
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