Examination of Witnesses (Questions 40-59)
DEPARTMENT OF
WORK AND
PENSIONS
9 MARCH 2005
Q40 Mr Steinberg: I have
been on this Committee for five years and it has hardly come down
at all in five years, has it, really?
Sir Richard Mottram: The problem
we have here—to get myself back into the same morass—if
you look at the individual benefits that we are measuring continuously
that are referred to in the Report before us, you can see that
we are definitely making substantial progress.
Q41 Mr Steinberg: What
would you say was your target?
Sir Richard Mottram: I do not
have one, other than the PSA targets I have in relation to individual
benefits, which I could describe to you. I have targets in relation
to Income Support, Jobseeker's Allowance, Pension Credit and Housing
Benefit.
Q42 Mr Steinberg: If you
add them all up, surely you come to a single target.
Sir Richard Mottram: No, because
there are a number of benefits that are not covered by these targets.
Q43 Mr Steinberg: When
do you hope those targets will be achieved?
Sir Richard Mottram: We have targets
in relation to Income Support and Jobseeker's Allowance for 2006,
and I expect we will achieve our target. We are ahead of schedule
on that. We have targets in relation to Pension Credit for 2006
and I expect us to achieve that target. We have a target for Housing
Benefit, reduction of 25%. It is still an open question whether
we will achieve that target. I expect to come back to this Committee
in 2006, if I am still around, and say, "we have made substantial
progress in relation to . . ."
Q44 Mr Steinberg: If I
had been the minister, I would have said, "Sir Richard, clearly
you are not meeting your targets . . . ."
Sir Richard Mottram: I am meeting
my targets.
Q45 Mr Steinberg: Well,
clearly you are not reducing it enough, Sir Richard. "I will
give you two years, and if you do not reduce it by 50% I will
sack you and all the civil servants involved in this". Do
you think you would achieve it then?
Sir Richard Mottram: I have one
target which is to reduce something by 50%. This is one of the
many things which my Ministers ask me to do, and I think they
evaluate my performance on a broader range than just this one.
Q46 Mr Steinberg: That
might be the case, but as far as I can see, it does not matter
whether you fail in anything else, £3 billion a year could
build a hell of a lot of hospitals and schools, and put a lot
of money into the Health Service other than hospitals, and we
could build a lot of roads. So if you fail at everything else
and manage to get this down to nothing, I would regard that as
a huge success. Not only would I make you a Sir, but I would make
you a Lord as well!
Sir Richard Mottram: You and I
have discussed this before.
Q47 Mr Steinberg: What,
making you a Lord?
Sir Richard Mottram: Yes! The
serious point I would make is that there is no possibility of
reducing fraud to nil while we have the framework of benefits
we have at the moment. There is no organisation with the scale
of responsibilities that we have that could have error rates that
were zero. We could certainly reduce both the fraud and the error,
and we could describe to the Committee how we plan to do that.
We have to see these numbers in the context of the very large
number of the total benefit expenditure of the country, which,
in the bits we are talking about here are £105 billion. This
is a lot of money. But I am not sitting here trying to justify
to you that we estimate that £3 billion of it is covered
by fraud and error.
Q48 Mr Steinberg: When
I read the Report I got the impression that you did not even know
whether that £3 billion was an accurate figure or not. It
could be more, could it not?
Sir Richard Mottram: It could
be more, but I do not think it is more.
Q49 Mr Steinberg: How
do you know?
Sir Richard Mottram: As I say,
we are continuously measuring—
Q50 Mr Steinberg: As the
Chairman said, you are working from records that are over six
years old anyway.
Sir Richard Mottram: Only in some
cases. Perhaps I did not explain this clearly before. Those benefits
that are most susceptible to fraud and error which are principally
Income Support, Jobseeker's Allowance, Pension Credit and Housing
Benefit, we are measuring fraud and error on those benefits continuously,
on a huge basis which the Comptroller and Auditor General has
previously remarked is probably the most sophisticated and systematic
approach of any country he knows about. The next biggest benefit
that we have is Retirement Pension, which, for various reasons—it
is a massive amount of money but it is not susceptible to fraud
and error in the same way as these income-related benefits. You
then come to Disability Living Allowance, where we have a review
in hand, and then there are other benefits like Incapacity Benefits
and so on. I agree that we should be periodically looking at those
so that we can give the Committee confidence.
Q51 Mr Steinberg: You
are an expert, are you not, because you talk so that I cannot
get any more questions in! When Mr Anderson from the Social Fund
was here a few weeks ago, he told us that they had lost a number
of papers.
Sir Richard Mottram: Correct.
Q52 Mr Steinberg: But
that this was only a blip. But then we read in the Report that
you have lost a load of papers.
Sir Richard Mottram: That is because
we are part of the same organisation.
Q53 Mr Steinberg: He said
it was just the Social Fund. This is the—
Sir Richard Mottram: I think he
was being examined on the Social Fund.
Q54 Mr Steinberg: I may
be wrong, but I am quite certain that when he was asked the question
he said, "Do not worry, it is only the Social Fund where
we have lost papers." You have lost medical assessment papers
of individuals, so you do not even know whether the people are
entitled to the benefit they are getting because you have lost
their medical reports.
Sir Richard Mottram: At the margin
we certainly do lose papers. As I explained, in the case that
arises here where apparently—
Q55 Mr Steinberg: Incapacity
Benefit. How can you pay Incapacity Benefit if you do not know
whether they are ill or not?
Sir Richard Mottram: The reason
I can pay them is that I do know they are ill because I do have
the papers. What failed to do here was ensure the National Audit
Office could have access to them within the timeframe they wanted.
I quite recognise that that raised issues about how we liaise
with the National Audit Office to make sure they can get their
hands on the papers they want, when they want them. I would add
that in the case of the papers referred to here, the National
Audit Office were looking again at a set of papers we had already
looked at, so we had taken a sample of Incapacity Benefit papers
for our own purposes to satisfy ourselves that we were paying
correctly; and then quite rightly the National Audit Office come
along and they take a smaller sample to make sure they have confidence
in what we are saying; and we should have been able to find those
papers. I can assure you, we are thinking about how we can make
sure we have that in the future.
Mr Codling: We have improved our
systems and the recovery rate is now at the rate of only 1.3%
not being found.
Q56 Mr Steinberg: That
is great! I am being facetious. In relation to £650 million
worth of error or fraud in Housing Benefit, is that because local
authorities could not care less—it is not their money?
Sir Richard Mottram: Not in the
least. The way in which the benefit is framed requires people
to be honest about their circumstances, including their income
and so on, and it is a very complicated benefit to be administered.
Q57 Mr Steinberg: : Could
a system not be brought in where local authorities are penalised
if they are found to be incompetent in paying out housing benefit?
Sir Richard Mottram: We encourage
local authorities to perform better, and we can see plenty of
evidence that is encouraging them to perform better, helping them
to perform better, incentivising them to take action against fraud,
for example, is better than berating them or punishing them, but
they are also inspected, and the results of those inspections
are taken very seriously by us and by them.
Q58 Mr Steinberg: Two
things come out of this. If you and your officials were told that
you had two years to put it right, or else; or local authorities
had to do it right, or else, then I bet we would get results.
Sir Richard Mottram: We are getting
results already. This is not the only thing we are responsible
for. We are responsible for getting people into work; we are responsible
for paying the money; and we are responsible for making various
efficiency savings that the Government want us to make. We have
to try and make the best of all those things together, and that
is what my staff do.
Q59 Jon Trickett: On the
question of debt and debt recovery, you estimate £9 billion
overpaid, and you recovered half a billion—rounded it to
the nearest half billion.
Sir Richard Mottram: It does not
round everything to the nearest half billion.
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