Select Committee on Public Accounts Fourth Report


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


 
previous page contents next page

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

© Parliamentary copyright 2005
Prepared 11 October 2005