Weekly Benefit Savings Scheme
Part Four – Changing Culture
The high level of fraud residing in economy is giving the current government concern. While not going for a Majorite "back to basics" route, the Government is keen to introduce an understanding of personal, civic and governmental probity. This approach to reduce fraud at the front appears in a number of diverse policy and legislative areas, such as Freedom of Information, Local Government Reform, Nolan Committee recommendations, Public Disclosure Act and Welfare Reform. The later is designed to reduce the £2bn-£7bn fraud residing in the Social Security System.
In January of this year Alistare Darling announced a campaign for the spring which is to bring benefit fraud and its effects on the national economy directly to the public’s living room. It is hoped to copy the success of the "drink/driving campaign" of the nineteen-eighties and nineties.
The DSS fraud figure has swung between £2bn-£7bn dependent on a number of factors. PAC and the NAO are particularly concerned that the Department has no real measure of the levels of fraud, but despite that comment, the Department has better measures than any other Social Welfare department in the world. Jeff Rooker, the social security minister responsible anti-fraud stated in an interview in the Western Mail in early December 1999 that the figure was £7bn. This amount is more than the Guatemalan national debt. This overspend represents spending on 28 major hospitals, 3,500 secondary schools or 14,000 primary schools. A frightening figure by anyone’s standard. However, at the time of writing this article the accepted value is back to £2bn. What is really frightening is that the true figure could be as high as £15bn, given that fraud and error seems to run at about 15%. Whatever the figure it is too much and the government is right to want to reduce the figure.
Fraud is running out of control in all areas of society and the private sector should not look at these figures and feel complacent. Fraud in the credit industry shows very similar figures, and much weaker measurements. The national problem will been explored in Lord Grabiner’s report on the black economy. John Scampion’s report on organised fraud suggests that the battle against the professional criminal has not really begun in earnest. I have not doubt that when Lord Grabiner publishes his report we will see direct parallels to the Scampion report
The Department in a series of policy documents and white papers(1) has indicated how it will reduce fraud with in the Benefits system:
Some these proposals have been addressed in new proposals from the department concerning yet even more changes to the WBS scheme. Details of these new changes are taken up in part six of this series.
The Benefit Fraud Inspectorate on their inspections tries to ensure that councils being inspected meet these requirements or are using the tools available to them. This includes the powers provided for Local Authority fraud inspectors under the Social Security Administration (fraud) Act 1997 and the Housing Benefit (Information from Landlords) Regulations 1997. For example, a recent Benefit Fraud Inspectorate report stated the following:
3.177 We are also concerned that the number of cases where the opportunity for fraud seemed to have arisen out of an initial verification failure. We were disappointed to see that there was no evidence of the use of inspectors' powers under section 110B of the Social Security Administration Act 1992, even though there were clearly cases where this was called for. For example, the powers could have been used to check the records of questionable employers and landlords.
The main point for Local Authorities is that we are moving to a more professional approach to fraud investigation which is based on intelligence led policing and the following of the rules of the Police and Criminal Evidence Act 1984. This approach is certainly reflected in John Scampion’s report. However again in the same Benefit Fraud Inspectorate report the Benefit Fraud Inspectorate noted the following:
3.118 During our second visit we were told that [the council] investigation staff have received training in IUCs but we were disturbed to see that there had not been an IUC conducted on any prosecution cases we looked at. Indeed, we felt that the level of investigation was inadequate to sustain a prosecution. We were told that [the council] did not have a tape machine. It is an inefficient use of resources to train investigators to do IUCs but not provide them with the necessary tools. It also means that investigators may need fresh training when the appropriate tools are provided. [the council] has told us that a tape machine was delivered on 29 September 1999.
3.119 We had other concerns about the evidence in these cases. Many of the witness statements on such matters as statements of benefit received were not comprehensive enough for criminal law.
We have to deal with benefit fraud in the following manner:
All of this, takes up more time and resources than the "just get them off benefit" style of investigation. While the old style may have been more cost effective it did little to protect the rights and civil liberties of the accused. The new style will give a better picture of fraud and the nature of fraud while protecting the individual. In order to prove intent the fraud investigator must interview the accused under a PACE caution. That is the law.
For detail of the effects on an LA see WBS part5 : Life on the front line