Examination of Witnesses (Questions 320
- 339)
WEDNESDAY 1 FEBRUARY 2006
DAWN PRIMAROLO
MP, MR TONY
ORHNIAL AND
MS SARAH
WALKER
Q320 Mr McFall: You gave an answer
on the number of people, I think it was about 160, who had been
convicted of fraud. What percentage is that 160 of the false claims
made?
Dawn Primarolo: That is the historical
data for where we are now, not the particular fraud that we have
now but we are proceeding with the investigations on. I do not
have that information to hand of the nature of the prosecutions,
but I can give you a breakdown.[2]
I am not quite sure, Mr McFall, how we can make sure you have
got enough information to be reassured without a risk to investigations
that are now proceeding and perhaps that is something that we
could explore with the Committee, how to make sure you have got
that information but we are not exposed to public problems of
confidentiality.
Q321 Mr McFall: You mentioned to
the Chairman that you were informed in November about the fraud.
How did that information come to you?
Dawn Primarolo: It came to me
from the Department. I had been rather concerned, as you would
expect me to be, to make sure that questions of fraud against
the system were kept to a minimum, so there was quite a regular
dialogue both in written form and in meetings between myself and
the relevant officials in the Department looking at the compliance
strategy and that it was working, and it was following one of
those meetings that at the next meeting where this issue arose
I was given up to date information on trends that appeared to
be emerging and a recommended course of action. I always take
the advice of the Department in these things.
Mr McFall: I think Sir David and his
colleagues have got a few questions to answer yet from us.
Q322 Jim Cousins: Has this experience,
the matters to which Mr McFall has been drawing attention and
the changes that you have presented this afternoon to the Committee,
caused you to revise the proposed staffing reductions in HMRC?
Dawn Primarolo: I saw that referred
to in the PCS submission and I was rather stunned and surprised
to see it there. There will not be reductions in the compliance
within the Tax Credits Office, in fact quite the reverse. I am
not quite sure how they got that view. I have not had the opportunity
to discuss it with them yet. Because of current circumstances
in tax credits and the merger of the Department I have asked the
Department to consider whether we need to increase the compliance
and to bring recommendations forward. As far as I am concerned
as Minister there was no proposal to reduce our activity in that
area, quite the reverse. I was very keen to see that we were responding
appropriately and proportionately and that meant reconsidering
what we were doing as a whole.
Q323 Jim Cousins: That is very helpful
but some of the proposals you have put before us this afternoon,
for example, working with the voluntary sector to deal particularly
with complex and difficult situations that people claiming tax
credits have so that the voluntary sector acts, if you like, as
some sort of broker with the tax credit system, will all be quite
heavy on staffing.
Dawn Primarolo: Yes, and it may
be that we need more staff. Perhaps I could give you an indication
of the volume that we are talking about with the pilots and perhaps
it would be appropriate for me to refer to those now because that
will have staffing implications. We have our inquiry centres which
you are quite familiar with, Mr Cousins. Between May and December
2005 our inquiry centres saw 731,000 tax credit claimants, which
is 20-25% of their workload. The Citizens Advice Bureau over a
two-year period saw 12,000; I have taken that from their annual
report. What we have been discussing with the voluntary sector,
as I said before, is how we run pilots with them that provide
evidence to indicate how we can give a better and more supportive
service to those that currently, for one reason or another, are
either not going to our inquiry centres or using the telephone
line. In the same period there were 7.3 million callers—not
calls; callers—to the helpline for inquiries. The sort of
pilot we are looking at is first whether we would put HMRC staff
into [Citizens Advice] Bureaux and run tax credit advice surgeries
direct. We are currently waiting to see what the geographical
spread is. We are looking at six pilots and we are waiting for
the [Citizens Advice] Bureaux to come back with that. The Citizens
Advice Bureaux have a central specialised bureau, as I understand
it, which advises on particular things, points of law and so on,
to their volunteers in the bureaux, and another suggestion is
whether we would put staff directly, and if so how many, into
those bureaux who would be specialists who then would be able
to deal with the calls. It is also a question of whether Citizens
Advice might like to be co-located for some specific issues into
our inquiry centres. When we run these pilots, which I hope will
run for 12 months (so for the cycle of tax credits), that agreement
will be reached in time for them to start shortly in sensible
geographical locations in terms of understanding the demands of
a particular section of tax credit claimants. We will then be
able to take it forward and analyse whether we should be doing
more through Citizens Advice Bureaux or changing our own procedure.
Another request which is being considered is that at the moment,
as you know, we have what is called a complex case inquiry team,
and the cases are referred from the helpline to that team. Citizens
Advice Bureaux and other advice agencies have access to a special
helpline but they cannot refer cases directly to the complex case
team and that is being considered and what the consequences would
then be on staffing. There may be efficiencies we can make elsewhere
if we get the accuracy better and the correct payments at the
correct time which will enable us to shift some of our staff across
to those types of arrangements.
Q324 Jim Cousins: All of that is
extremely interesting and helpful but the Committee has had evidence
that there are a substantial number of staff who are working on
fixed term contracts, which is obviously not the best practice.
Are you able to give the Committee some idea of changing that,
of reducing the number of people on fixed term contracts, obviously
not by getting rid of them all but by putting them on a more secure
basis?
Dawn Primarolo: That would generally
be the policy of the Department, to have full time staff appointed.
What I cannot tell you is what the ratio is. It is conceivable,
and therefore I would need to go back and check, that at our peak
periods when the contact centres are dealing with renewals, for
example, we need a much greater capacity than we do at this time
of year. We respond in two ways to that. One is to bring staff
from elsewhere in the Department and bring the other contact centres
on line, and I think the Department also recruits on a temporary
basis into that period, but I am not absolutely sure of that,
and that is where the temporary staff would be. I am happy to
provide the Committee with the details. Obviously, as a Minister
I set what type of service I expect and the policy to pursue.
I do not line-manage the Department and so I am going to have
to go back to them and to ask for that.[3]
Q325 Jim Cousins: For the moment
then I think it is best for the Committee to leave that particular
issue with you on the basis that you are going to supply us with
as much detail as is to hand and give us a picture of how these
various changes in providing staff affect the overall target reduction
in staff that HMRC have been set.
Dawn Primarolo: I see, okay. I
am sorry, Mr Cousins. I misunderstood your first question about
general efficiencies. In tax credits the number of employed staff
has been increasing since 2003-04. In 2003-04 we had 7,300. We
now have 8,200 in 2004-05 which are the latest figures I have.
I think that indicates to you quite clearly the stable nature
of the employment patterns within tax credits.
Q326 Lorely Burt: I want to ask you
about notification and award notices. From April claimants are
to "receive a two-page summary that explains the most important
aspects of their award". Would it be possible for the system
at the same time to issue a detailed calculation to all claimants?
Dawn Primarolo: At this short
notice I think it highly unlikely. That is quite a substantial
change to the system but I want to be sure, Ms Burt, that I understand
your question clearly and that I have not misunderstood you. Claimants
can ask for the detailed calculation now but we have talked about
providing what I have called playback, which is basically a statement
of account, a complete explanation to the claimant of what the
details are that they gave us, that we have acted on correctly
and therefore what their entitlement is. We do put new software
onto the computer at major points in the year to avoid renewals
and the playback is to be in the November release which I have
referred to. What will be available in the new award notice will
be, I hope, more detail on the new award notice about the calculation
and how it was achieved and so they would not need a second one,
but the full playback, if that is what you are referring to, is
something that would be programmed for November and that would
come in for renewal the following year. I am trying to take it
in stages to get to a complete position.
Q327 Lorely Burt: With regard to
some of the evidence we have taken, people have been talking about
receiving large numbers of award notices and I wondered whether
you had made an assessment as to whether it would be possible
to reduce the number of award notices sent without compromising
the accuracy of the information provided.
Dawn Primarolo: Absolutely. The
award notices have two functions, of course, and one is to do
with independent taxation because under independent taxation we
notify individuals direct and with the tax credit system we are
using household income because it was to be paid to the main carer,
normally the mother, so 80% plus will go to women. When we send
out award notices we ensure that both individuals in respect of
independent taxation get those award notices. What has happened
therefore is that every change that occurs to the information
that the computer has immediately generates to both because as
a woman I am going to defend independent taxation, and I am sure
you would; it took women a long time to get independent taxation.
However, of course, you are absolutely right: we need to look
at whether every notification of changes of details really requires
another award notice. We have reduced them in some circumstances,
for instance, where there might be a change of address we do not
issue an award notice. We need to go through that carefully, bearing
in mind the points that Mr McFall made right at the beginning,
in making sure that the money is going to the right person and
we have got verification of that. I want to look and say, "You
have told us the information but we do not really need to send
you another award notice because there is not a huge change in
the material facts". That will be in playback, because what
people will want to see is exactly what happened and when they
told us what, so that is the interaction.
Q328 Lorely Burt: Finally, can I
ask what action you are going to take in response to the Ombudsman's
recommendation number eight, which is about the information that
should be given to customers when they have been overpaid?
Dawn Primarolo: Those were the
points referred to in my opening statement. I think there is progress
on a number of points with regard to the Ombudsman's recommendation,
which is why I said that from 13 February the information is about
additional payments and bringing them in a staged approach in
line with what will happen automatically on in-year recoveries
from November when the change is made. We have made some progress
there. If you feel that the introductory note is not enough I
am happy to expand in writing on that.[4]
Q329 Lorely Burt: Referring to your
opening statement, you say that the turnround time for disputed
cases is currently five weeks. Is that the average turnover time,
because obviously there are cases which are taking a lot longer
than that?
Dawn Primarolo: No. Obviously
some are much faster.
Q330 Lorely Burt: That would be the
average then?
Dawn Primarolo: Yes. Some are
dealt with more quickly. We have set that particular target and
I thought four weeks was reasonable, and I expect the Department,
from the information they have given me, to be able to deliver
that by March of this year.
Q331 Lorely Burt: So the target that
you are setting will be a maximum of four weeks, but what you
are achieving at the moment is an average of four weeks? Is that
correct?
Dawn Primarolo: Yes, obviously
it would be best if they were all done within four weeks but I
know that members know from (a) their own postbag and (b) the
evidence they have had that some cases, because of early IT problems,
things like access to the records are still proving difficult
and in those very complex cases (which is always the case; it
happens everywhere in the tax system and the benefits system)
it might take slightly longer, but I want the overwhelming majority
to be done, except in absolutely exceptional circumstances, within
four weeks and that is what I have asked them to do.
Q332 Mr Mudie: Our colleague Frank
Field, when he gave evidence to us, indicated that a wage/tax
credits slip is produced at the moment and it is only given to
people who actually request it. Is this so and what is the objection
to giving people that as a matter of course because that works
out the way the tax credit has been computed?
Dawn Primarolo: At the moment
the calculation has to be requested but the new award notice will
have the vast majority of that information contained within it,
so it will be going in automatically.
Q333 Mr Mudie: From November?
Dawn Primarolo: No. The new award
notice is April. November is the historic playback.
Q334 Mr Mudie: If all the information
is being produced now why are you giving a summarised form in
April rather than just giving them all the information? If it
is readily available now it is obviously on the computer. It is
not a question for you. We are going to see your officials. Maybe
it is a better question for them but I am just puzzled. Frank
[Field] seemed to be well aware of that and it seemed to us amazing
that this was available and not given to people unless they asked
for it.
Dawn Primarolo: It will probably
be on the basis that, rather than send yet more paper to people
that they do not require, we supply the information when they
request it. There is always a difficult balance here but I am
sure you will be able on your visit or whatever to speak to the
officials about that. It seems to me there is a balance between
giving the information that people want and (which is one of the
complaints about the volume of award notices) giving them information
they do not want and do not need and is on lots of paper.
Q335 Chairman: Sure, but the issue
is whether they can be made very quickly aware of the factual
basis, which may be completely incorrect. If you are paying one
in three wrongly we have got to try and fix the system now.
Dawn Primarolo: Yes, but from
April that will be the case because it will be on their award
notice.
Q336 Mr Newmark: I just want to echo
what George Mudie was saying. There is this tension between providing
information that individuals want and the amount of paperwork.
It is more of a suggestion but I am hoping that you will be looking
into how you are going to reduce that paperwork and at the same
time perhaps take up Mr Field's suggestion of limiting it perhaps
to ten line items so that it is very clear to people what it is
they are entitled to, and that is perhaps the direction we should
be heading in.
Dawn Primarolo: Yes indeed, and
that is precisely what we are trying to do. The consultation group
has met since 2001 on a regular basis, and the new award notice
was very much part of the discussion and they were involved in
what we agreed on it, to look at how to strike that balance: giving
them the information that they need, not that they do not want,
in a form that is accessible and not too long, as will be the
guidance notes that are issued alongside the new award notice
from April of this year. Those guidance notes, as well as being
consulted on with the voluntary and community sector, have been
piloted to see whether claimants can understand them and checked
for plain English so that even if the pilot shows okay we have
still got a step beyond that and that will be done before they
are available in April.
Q337 Jim Cousins: One of the commitments
that you gave on behalf of the Government on 26 May was that helpline
operators would be put in a position where the technology would
give them a complete case review; they would be able to look at
everything that had happened. What has been the progress on that?
Have we put that into effect?
Dawn Primarolo: Our helpline advisers
still will not be able at the present time to get the full case
review on the screen. That is tied into releases for software
onto the computer system. At the moment I cannot recollect the
date. I am not an IT specialist so I take advice from IT specialists
in the Department who tell me when something can be done and when
it cannot. If that is something that you particularly want to
look at, how fast we can do them, when it is coming in and how
we deliver it, we need to find a way to get that discussion going
with the people who advise me.
Q338 Jim Cousins: It clearly is an
important aspect of customer service and the interaction between
your staff and people who want to claim tax credits. An interesting
piece of evidence that the Public Administration Committee arrived
at was that a large number of overpayments were triggered because
60,000 couples had changed their circumstances, one partner had
left the couple and another partner had joined the couple and
the second partner's income was disregarded within the tax credit
system and the overpayments were triggered by that. That does
illustrate the complex household changes as well as the income
changes that people are required to report and having a customer-sensitive
system is crucial in creating the right environment for somebody
to report that their partner has left them and they have taken
up with a new partner.
Dawn Primarolo: Yes, and I have
tried to approach that with the system I have now in a number
of ways in the announcements that have been made. I have had the
distinct impression both from this Committee and from consultation
with external groups plus the other select committees who have
shown an interest in this, the Ombudsman and the Public Accounts
Committee and the select committee you have just referred to,
that we want some speed in this even if it cannot be done automatically
on the system, given that it is a big system, and keep it stable
and not keep changing it. First, there is the referral from the
helpline to the complex cases, and I have touched on that with
regard to whether the voluntary and community sector might possibly
have access to referring people directly. We have also, with the
interaction of the disregard going to £25,000 because this
will be about income changes in their circumstances, tried to
deal with some aspects of that, and the reporting of circumstances,
which the proactive pilots that the Department itself has undertaken,
which produces apparently the view that 165,000 will be more accurate,
is all designed to deal with that problem in the here and now.
Q339 Jim Cousins: Could I put it
to you that reporting that your girlfriend has left you and that
you have acquired a new one is not a desperately unusual part
of our lives?
Dawn Primarolo: I could not possibly
comment. I would not be so bold, even in the circumstances of
today's Parliament.
2 Ev 191 Back
3
Ev 191 Back
4
Ev 191 Back
| 
