Clause 1 - Additional powers to obtain information
Social Security Fraud Bill
11:15 am
Mr Jeff Rooker (Minister of State, Department of Social Security; Birmingham, Perry Barr, Labour)
I offer a ballpark figure of £60 million, but that is only an estimate. I mentioned the idea of open court. I consider the idea of popping along to see a magistrate at home when one wants an emergency order to be even worse. The figure of £60 million has been quoted—if the magistrates were not queueing up for that work, I would be astonished.
I turn to amendment No. 14 and the matter of the central point of contact. Obviously, much work must be done to make the Bill practical both for business and for us. We want the minimum burden on business, and we made that abundantly clear during our discussions with businesses, and in the amendments that we made to the Bill in the other place. When the Bill receives Royal Assent, there will be the normal three-month consultation on the code of conduct.
We have given undertakings that inquiries will be routed through intelligence units within the 13 administrative areas of the Benefits Agency, plus the national intelligence unit that deals with organised fraud. Therefore, there will be 14 sites. That represents an incredible degree of centralisation in a Government Department. We currently have 600 offices, and we do not envisage the initial authorisation of more than 175 staff.
Different issues apply to local authorities, which have a statutory duty to administer housing benefit and council tax benefit. Some authorities are good, some are excellent and some are appalling. Everybody knows that because we publish the reports of the benefit fraud inspectorate. Local authority investigators are trained to carry out their duties, and we assist with such training.
Our best estimate of the cost of housing benefit fraud is £600 million a year. That is an unacceptable drain on resources. However, there are 409 local authorities and the Government cannot tell them precisely how they should do their job. We expect chief executives to run efficient and tight ships. We have given them access to our internal information through remote access terminals; every local authority has at least one such terminal, although some have more. That makes accessing the information easier. However, local authorities can access information electronically—principally information from credit reference agencies—only following authorisation from the Secretary of State, and a case must be made for such authorisation. There are no blanket authorisations. Nothing has passed over my desk, or the desk of my right hon. Friend the Secretary of State, about local authorities that are good, bad or indifferent.
In discussions with the Local Government Association, we raised the possibility of local authorities banding together to make such inquiries. That will have to be done in writing because we cannot give commitments on behalf of local authorities. However, we understand from British Telecom that in Gloucester inquiries are centralised through the trading standards department, which means that there is only one department making such inquiries. Therefore, even the council channels through one department. The London team against fraud facilitates the sharing of information and best practice throughout the London boroughs. There is a wide variation in the performance of London boroughs that deal with housing benefit, ranging from good to very bad. All boroughs are trying to raise their game, and we want to facilitate that.
Local authority officers will be bound by the statutory code of practice. It will apply to such officers in the same way that it applies to the Department's officers. Paragraph 4.22 of the code of practice indicates that local authorities should join together to channel inquiries through one department in one of several authorities. That will make the measures in the Bill less of a burden on authorities and business. It would be useful if the authorities considered operating in that way.
I accept that this is an area on which we could spend time. The amendments moved by the hon. Member for Beckenham raise legitimate concerns. Liberty has also raised those issues. I make no criticism of Liberty. It does not have the resources to comment on our original consultation. I told staff to remind representatives from Liberty that we had not heard from them, but they wanted to wait until the Bill was published before commenting. I understand that voluntary sector organisations are strapped for resources.
However, I think that even Liberty would accept that we have made substantial changes. I repeat that there is no intention, and there should be no possibility, of fishing expeditions on individual citizens under the Bill. I cannot be clearer than that. Our client group is confined to benefit claimants. They should not have fewer rights than other citizens, whether they are taxpayers or not, because they can be both at the same time. All that we are asking is that people tell us the truth when making benefit claims. We can make inquiries only if there are reasonable grounds for believing that the truth is not being told. We are severely limited from the outset.
Some of the figures look big because we have 50-odd million claimants. For example, we issue a million order books a week—50 million a year. We pay out £2 billion in benefit every week—£100 billion a year. Huge sums are being paid. One can make the figures look big, but inquiries should not be an onerous cost on business. As taxpayers, businesses have an interest in helping us reduce the scale of benefit fraud.