2 Action still needed
13. The complexity of the system is a key problem
for means-tested benefits. Housing Benefit, for example, has very
complex rules for income, individuals' circumstances and rent
levels. The Department agreed that simplification was desirable
but said that it would increase programme expenditure and lead
to 'rougher justice' for some people since regulations would not
be so finely tuned.[13]
There had been some action to simplify in certain areas such as
Pension Credit and in the Housing Benefit reforms being piloted.
The Department said it was not complacent and was keen to examine
the scope for simplification. Complexity was however inherent
in the detailed legislation for benefits passed by Parliament,
although in the past there had been insufficient focus when developing
the rules on how benefits would actually be delivered.[14]
14. Local authorities have been losing considerable
sums of Housing Benefit in overpayments, and experience many of
the same problems as the Department in administering benefits.
To defraud the system some people misrepresent their circumstances,
and whether they are really living at the address. Customers can
also make genuine mistakes, and there is also complexity in the
way benefits inter-relate, which can lead to official error. The
Department is working with local authorities to help them to take
action against fraud through inspections, advice and incentives.
It is generally satisfied with the level of data matching being
undertaken, although there are some problems with the timeliness
of data. Other approaches include decision support systems and
risk based work to focus on those customers most vulnerable to
error. The Department is confident that most local authorities
are committed to reducing fraud and error. Some 80% of local authorities
have overpayment recovery rates of more than 50%. Where there
is evidence of criminal activity, action can be taken. In 2003-04,
local authorities applied 8,695 administrative penalties and cautions
for benefit fraud, compared to 2,600 in 2001-02. In addition,
local authorities secured 3,747 successful prosecutions for benefit
fraud in 2003-04 compared to 1,732 in 2001-02.[15]
15. The Department is now planning to cut 30,000
jobs, with potential implications for its efforts to tackle fraud
and error. The Department said that it had a gateway process for
the whole programme and a specific gateway process for each of
the component parts.[16]
Reductions in the total number of staff involved in anti-fraud
work would be offset by better utilisation of staff and a more
targeted approach to the work, including better use of intelligence
and data matching. It intended there would be no impact on the
overall effort to reduce fraud and error, where public service
agreement targets would require continued progress.[17]
16. The Department intended to improve performance
across the Department with a quarter less staff through a series
of transformation programmes all based on the same set of principles.
These were: clarity of organisation; getting scale; providing
off the shelf IT; and linking everything up more effectively,
including having a much better payments system. It was probably
one of the biggest change programmes in Europe, which would be
difficult to handle, but the Department was confident it could
do it.[18]
17. One of the causes of the qualification of the
Department's 2003-04 accounts was its inability in find the supporting
papers in 106 of the 800 Incapacity Benefit cases selected by
the National Audit Office to check that eligibility conditions
had been met and that accurate payments had been made. The absence
of such records raises wider issues about how customers can be
dealt with effectively when information about their status, including
medical reports, cannot be located timeously. The missing 96 files
were subsequently found, but the Department accepted that it needed
to ensure that the National Audit Office got the information it
needed to complete its audit. A similar problem arose at the Committee's
hearing in January 2005 on the Social Fund. The Department expected
their new storage contract to help them locate files, and said
the problem was only at the margins, with a 1.3% missing rate.[19]
13 12 Q 10 Back
Back
14
Qq 11-13, 121-122 Back
15
Qq 57-59, 90-97, 119 Back
16
Q 127 Back
17
Qq 16-21 Back
18
Q 134 Back
19
Qq 14-15, 52-56; C&AG's Report, paras 12-14 Back
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