§ Mr. Dewar
To ask the Secretary of State for Social Security (1) if he will give(a) the number of staff engaged in his Department on fraud prevention work, (b) the amount of money saved as a result, (c) the unit cost ratio of cost to benefit and (d) the number of cases in which fraud was detected and the number of prosecutions which resulted in each of the last 10 years;
(2) if he will give (a) the number of people arrested for DSS fraud or abuse, (b) the number of cases where no further action was taken, (c) the number cautioned, (d) the number of people charged by the police, (e) the number of cases sent to the Crown prosecution service, (f) the number of cases discontinued by the Crown prosecution service, (g) the number of cases completed in the magistrates court, (h) the number of convictions and (i) the number acquitted at court, for each year since 1979;
(3) what is the target for fraud savings in his Department for 1993–94 and 1994–95; how these figures are arrived at; if he will break them down into amounts of (a) sector fraud and (b) organised fraud, and give the amounts for each of the main benefits, the multiplier used and any other relevant factors contributing to the target figure; and what percentage and amount of the figure will come from housing benefit payments;
(4) if he will give details of the various multipliers used by his Department in calculating fraud savings and the circumstances in which these are applied.
§ Mr. Hague
The administration of benefit fraud is a matter for Mr. Michael Bichard, the chief executive of the Benefits Agency. He will write to the hon. Member with such information as is available.84W
Letter from Michael Bichard to Mr. Donald Dewar, dated 24 November 1993:As Chief Executive of the Benefits Agency, it is my responsibility to answer questions about relevant operational matters. I am therefore replying to your recent Parliamentary Questions to the Secretary of State for Social Security asking about benefit fraud.The full range of information requested is not available in every instance but I hope that you will find the following helpful. It may be helpful if I deal with each question in turn.Your first question asks about the number of staff employed on fraud prevention and the results achieved.From October this year I have established a new security Branch in Leeds with a responsibility to ensure a co-ordinated and strategic approach to fraud and security matters, and to protect programme expenditure against fraud and abuse.The Department of Social Security's strategy for combatting fraud is based on three principles:PREVENTION minimising/eliminating opportunities for FraudDETECTION catching those who try to cheat the systemDETERRENCE persuading potential fraudsters that it is wrong and not worth the risk.Along with their other duties, staff in many parts of the Department and its Agencies are concerned with fraud prevention. For example, the way in which claims for benefit are processed, or payments are made, can help to protect the system against abuse. Resources devoted to this general anti-fraud work are not separately identified.However, figures for the specialist fraud commands within the Benefits Agency are available. As at 31 March 1993 Sector Fraud employed 2,837 staff in the prevention and detection of fraud and abuse. Organised Fraud, a specialist unit set up to investigate suspected organised fraud, employed about 240.In the year ending 31 March 1993 sector Fraud recorded total savings of £516 million, made up of weekly benefit savings of £491 million, and instrument of payment savings of £25 million, at a cost of £64.7 million. In the same period Organised Fraud recorded total savings of £42 million and cost £7.7 million.The fraud organisation was set up in its present form only in January 1991 and although it is constantly refining the way in which statistics are maintained, figures for the number of cases in which fraud was detected. However, I am able to tell you from the sector fraud figures available that in the year ending 31 March 1992 approximately 250,000 cases were successfully investigated and resulted in a saving of public funds. In the same year 4,379 prosecutions were undertaken. In the year ending 31 March 1993 the figures were approximately 270,000 investigations and 5,239 prosecutions.The prosecutions undertaken in the last ten years are as follows:
Number 1983–84 8,997 1984–85 6,702 1985–86 6,679 1986–87 6,603 1987–88 7,231 1988–89 8,222 1989–90 8,671 1990–91 7,911 1991–92 14,379 1992–93 5,814 1 Figures are not available for organised fraud for 1991–92.The Department operates a selective and humane prosecution policy. It is felt that it is more important to check the abuse of the system than to mount expensive prosecutions where, having full regard to the nature of the offence and the debt involved, it would not be cost effective to do so. Steps are being taken to strike a better balance between the benefit savings achieved and the prosecutions undertaken.Your second question asks about cases which were considered for prosecution by the Department or the Police.In the year ending 31 March 1993 Organised Fraud's activities led to the arrest of 1,400 people, of whom 575 were subsequently 85W prosecuted. Of these 575 prosecutions, 556 (97 per cent.) were successful with over 200 receiving custodial sentences ranging from six months to eight years.Police arrest is a very extreme measure normally used only in dealing with criminals involved in organised fraud, and has little or no relevance to the work of sector fraud and the customers of the Benefits Agency with whom they come into contact in the course of their investigations.The Department's policy towards fraud is to detect it rapidly, investigate it efficiently and to prosecute offenders where appropriate. Prosecutions are handled by the laying of information and summons. I have quoted our prosecution figures since 1983–84 above.I regret that statistics on arrests are not kept in a way which would enable me to answer your detailed enquiry.Your third and fourth questions ask about the targets set for fraud savings, how these figures have been arrived at and details of the multipliers used in calculating them.Instrument of Payment savings are not subject to any multiplier and all such savings are recorded at face value.A multiplier of 32 weeks is applied to the amount of weekly Benefit Savings recorded as a result of other successful fraud investigations or interventions. This single multiplier is currently applied to all benefits payable by the Department and reflects the anticipated average period for which claims could be expected to run in the absence of a successful fraud intervention.Given the nature of the work of Organised Fraud, no formal target is set for that organisation. Although Organised Fraud do achieve and record benefit savings its role has a large element of prevention and a target in monetary terms is not appropriate.The target set for the Sector Fraud organisation is based mainly on previous years' achievements using empirical data and is set by the Secretary of State taking into account the resources which are available for the anti-fraud effort.The target for 1993–94 is £557 million and early indications are that the target will be achieved. The target for 1994–95 has not been finalised but is likely to be higher than this year.The targets are set as a global figure and are not broken down into the various benefits.I would draw your attention to the Report "Fighting Fraud in 1992–93" which gives fuller detail of the fraud effort for that year.I hope you find this reply helpful. A copy will appear in the Official Report and a copy will be placed in the Library.