Supplementary memorandum submitted by
the Department for Work and Pensions
Question 37 (Dr John Pugh):
Resources for prosecutions—split into costs for trial and
for investigations
COST TO
THE FRAUD
INVESTIGATION SERVICE
All Fraud Investigation Service (FIS) investigations
are undertaken with a view to delivering a criminal sanction which
will be of prosecutable standard. It is not therefore possible
to separate out FIS costs for those cases that, following investigation
and consideration of the options, proceed to prosecution.
However, once a decision is taken to submit
for proceedings further costs will be incurred in preparing the
investigation file for submission to the Departmental solicitors.
FIS has a network of centralised teams whose role is to prepare
files for submission to the DWP Prosecution Division. The numbers,
by grade, dedicated to Prosecution file preparation are as follows:
| Full-time equivalents
|
| Team Fraud Investigator (HEO) | 4.76
|
| Fraud Investigator (EO) | 27.63
|
| Fraud Investigation Support Officer (AO) |
47.74 |
| Fraud Investigation Support Officer (AA) |
2.10 |
| Total | 82.23 |
This represents some 3% of total FIS resource, which represents
a cost of £3.2 million (2006-07).
COST TO
THE DWP PROSECUTION
DIVISION
Overall, Prosecution Division estimate an average cost per
case of £1,200.
In straightforward cases in the Magistrates' Courts, to which
the defendant pleads guilty, the average cost may be as low as
£400. In contested cases, in the Crown Court, the average
cost of a two to three day trial is in the region of £7,000.
These figures include all of Prosecution Division's processing
costs and agent/counsel fees.
Question 54 (Mr Keith Hill): How many people, what sort and
how much money is involved in large scale organised fraud cases
In 2006-07, the Department's Organised Fraud Unit instigated
some 900 prosecutions for serious offences against the benefits
system and a similar number is anticipated for the current year.
In 2006-07, around 70% of those prosecuted received an actual
or suspended custodial sentence with the longest sentence being
7.5 years. The year-to-date figure for 2007-08 is around 80%.
The offences are generally related to either using false identities
to claim benefit or the large-scale theft and manipulation of
DWP cheques.
Not all organised fraud necessarily results in financial
losses to the DWP. Identities that have been falsely created or
hi-jacked from our systems are often used against other organisations,
both public and private. The Department's Organised Fraud Unit
therefore works closely with the police across Great Britain and
with other government departments to conduct cross-agency investigations.
Close co-operation between the Unit, the police and local
authorities led, for example, to the conviction in January 2008
of two persons who admitted to the theft of £1.85 million
in state benefits. They received sentences of 5 and 4 years. In
the same month, similar close co-operation with the police and
authorities in the Irish Republic secured the extradition of five
people who had fled England following arrest in 2005. They were
sentenced to a total of 12.5 years for offences amounting to £240,000.
The Unit also investigates applications for National Insurance
Numbers using false documents and the hi-jacking of the identities
of genuine DWP customers. Such identities can then be used by
organised criminals to target a range of benefits, including the
Tax Credit system, as well as other financial organisations, such
as banks and building societies. Last year the Unit successfully
investigated and eliminated nearly 5,000 such identities, preventing
substantial potential losses to both the public and private sector.
Question 107 (Mr Ian Davidson): How is DWP working with the
police on multiple identity cases, to what extent is risk profiling
and risk assessment made on this
DWP through its Fraud Investigation Service works closely
with the Serious Organised Crime Agency (SOCA) and other arms
of law enforcement to fully understand and identify threats to
the Department through the criminal use of multiple false and
stolen identities. DWP also has a National Identity Fraud Intelligence
Desk, as part of the Fraud Investigation Service, which is a single
point of contact on identity fraud Intelligence issues with SOCA,
the police and other Government departments affected by identity
crime.
In addition the Department's Organised Fraud Unit maintains
strong links with SOCA, the police and other government departments
to seek to ensure that any criminal investigations undertaken
by them identify and prosecute offences by organised criminals
against DWP. A key resource, located within the Unit, is the Financial
Investigation Unit. Under the Proceeds of Crime Act 2002, this
unit receives, reviews and acts on Suspicious Activity Reports
made to SOCA where there are implications for DWP, often revealing
evidence of false and stolen identities. These investigations
frequently require joint investigation with SOCA and policing
services.
Question 115 (Mr Richard Bacon): Extra columns to Figure 6
of the report to include official error; customer error and totals
ESTIMATED OVERPAYMENTS
DURING 2006-07
| Estimated overpayments 2006-07 | Expenditure
| Total Fraud & Error |
Fraud | Customer Error
| Official Error | Last measured
|
| Continuously reviewed |
| | | |
| | | |
|
| Income Support | £9.1bn
| 5.5% | £500m | 2.3%
| £210m | 1.8% | £160m
| 1.4% | £130m | Oct 05-Sep 06
|
| Jobseeker's Allowance | £2.5bn
| 4.8% | £120m | 2.3%
| £60m | 0.4% | £10m
| 2.1% | £50m | Oct 05-Sep 06
|
| Pension Credit | £6.9bn
| 5.2% | £360m | 1.6%
| £110m | 1.3% | £90m
| 2.3% | £160m | Oct 05-Sep 06
|
| Housing Benefit | £14.9bn
| 5.3% | £780m | 1.0%
| £150m | 2.8% | £420m
| 1.4% | £210m | Oct 05-Sep 06
|
| Instrument of Payment | |
| £10m | |
£10m | | |
| | Apr 06-Mar 07
|
| Periodically reviewed |
| | | |
| | | |
|
| Disability Living Allowance | £9.2bn
| 1.9% | £170m | 0.5%
| £40m | 0.6% | £60m
| 0.8% | £70m | Apr 04-Mar 05
|
| State Pension | £53.7bn
| 0.2% | £110m | 0.0%
| £0m | 0.1% | £40m
| 0.1% | £60m | Apr 05—Mar 06
|
| Carer's Allowance | £1.2bn
| 5.5% | £70m | 3.9%
| £50m | 1.0% | £10m
| 0.6% | £10m | Apr 96-Mar 97
|
| Incapacity Benefit | £6.6bn
| 1.7% | £110m | 0.1%
| £10m | 0.2% | £20m
| 1.3% | £90m | Apr 00-Mar 01
|
| Interdependencies* |
| £30m | | £10m
| | £10m |
| £10m | Apr 05-Mar 06 |
| Unreviewed (Statistically assessed)
| | | |
| | | |
| |
| Unreviewed (ex CTB) | £11.8bn
| 1.8% | £210m | 0.6%
| £70m | 0.5% | £60m
| 0.7% | £80m |
|
| Council Tax Benefit | £3.9bn
| 4.6% | £180m | 0.9%
| £30m | 2.5% | £100m
| 1.3% | £50m |
|
| Total | £119.8bn | 2.2%
| £2.7bn | 0.6% | £0.8bn
| 0.8% | £1.0bn | 0.8%
| £0.9bn | |
| Range | | (1.9-2.6)
| (2.3-3.1) | (0.4-0.9) | (0.5-1.1)
| (0.7-1.0) | (0.8-1.2) | (0.6-1.0)
| (0.7-1.2) | |
Source: DWP, Fraud and Error in the benefit system October
2005 to September 2006 published December 2007.Notes: These
estimates for 2006-07 will be updated in May 2008 when estimates
for the continuously reviewed benefits based on sample cases across
the full financial year 2006-07 will be available.Figures expressed
as percentages (%) give the overpayments as a percentage of the
benefit paid out in the year.* some overpayments of DLA have
a knock on effect on entitlement to disability/carer premiums
in income-based benefits.
| 
